Dollar index can rise towards 102 while Euro could see limited rise in the near term. USDJPY could rise towards 158/159 while EURJPY can dip to 177/176 while below 178. EURINR looks bearish towards 106/105 while below 107. USDCNY has declined sharply and could be headed lower towards 6.65. Aussie and Pound looks mildly bullish for the near term. Correlation between Brent and USDINR has weakened as the currency pair trades below 95 while Brent is at $ 110.17. Strong FII interest in the Jio Platforms IPO (to open today) could push USDINR towards 94.50 or lower, making a rise to 95.30–95.50 and especially above 96.00 increasingly difficult, while crude prices could continue to trade higher.
Dollar Index (101.791) has moved up and is heading towards 102 again. A break above 102 is necessary for the index to again pick up rising momentum else we may expect near term trade within 101.50-102 before an eventual upside breakout is seen in the medium term.
EURUSD (1.1224) is holding well above 1.12. While the broader outlook remains bearish, near term rise towards 1.1250/60 can be seen before resumption of decline.
Dollar-Yen (158.31) could be headed towards 159 while the pair remains above 157-157.50 while EURJPY (177.68) looks stable but could decline to 177/176 while below 178. A break above 178 is needed to revive short term bullishness.
EURINR (106.3791) looks bearish towards 105 while it sustains below 107. The trigger to further decline would come only below 106. While the broader downtrend persists, the cross could remain above 106 for the near term.
USDCNY (6.6775) has been declining sharply. The pair is headed towards 6.65 before a Long term reversal can be seen from there.
Aussie (0.7017) trades above 0.70. While it sustains, it can slowly rise towards 0.71/72 else it can fall back to levels below 0.70 and trade within the 0.70-0.69 region.
Pound (1.3373) has risen as expected and if the upward momentum holds, it can target 1.35 in the coming weeks.
USDINR (94.93) closed at 94.93 in the previous session. Despite Brent rising trading at $ 110.17, above the crucial $ 108 level we were looking at last week, USDINR remains below 95, suggesting RBI intervention has weakened the usual correlation between Brent and USDINR. Strong FII interest in the Jio Platforms IPO (to open today) could push USDINR towards 94.50 or lower, making a rise to 95.30–95.50 and especially above 96.00 increasingly difficult while crude prices could continue to remain higher.
The US Treasury Yields are stable above their support. There is not much room left of the downside. The yields can resume their uptrend either from here itself after some more consolidation or after a dip to test their support. The German Yields have come down again as expected. They can test their support and then resume their broader uptrend. The 10Yr GoI continues to consolidate in a narrow range. The yield can make a bullish breakout of this range and go higher eventually.
The US 10Yr (5.13%) and 30Yr (5.44%) yields are stable above their support. The yields are likely to rise back and resume their uptrend targeting 5.35%-5.4% (10Yr) and 5.7%-5.75% (30Yr). This rise can happen either from here itself or after testing their support at 5%-4.95% (10Yr) and 5.4% (30Yr.
The German 10Yr (3.40%) and 30Yr (3.76%) Yields have come down again as expected. They can test their 3.35% (10Yr) and 3.75%-3.7% (30Yr) and then resume the uptrend towards 3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.3920%) continues to oscillate between 7.35% and 7.42%. While above 7.3%, the outlook is bullish to see 7.5%.
Dow can rise towards 53500-54000 while it holds above 51900. DAX needs to hold 25250 to move towards 25800-26000. Nifty can rebound towards 23000 while above 22800, and a decisive break below 22800 can drag it towards 22400. Nikkei needs to stay above 64000 to recover towards 67000, else 62500 comes into view. Shanghai is holding above 3700 with scope for a rebound towards 3800.
Dow (52501.24, +1.02%) has moved higher to test the high of 52695 before closing contrary to our earlier view. While it holds above the immediate support at 51900, it has scope to rise further towards 53500-54000 in the coming week.
DAX (25304.42, -0.06%) remains flat around the key level of 25250. It needs to hold this level to move higher towards 25800-26000 over the coming week.
Nifty (22888.95, -1.11%) has fallen sharply to test the low of 22845 near the 13-day MA before closing on Monday. While this level holds, there is scope to rebound towards 23000 in the coming session. Only a decisive break below 22800 will drag the index towards 22400.
Nikkei (64705.52, +0.98%) declined to test the low of 63807 before closing at 64075 yesterday as expected. It has opened higher today but is moving lower. It needs to stay above 64000 to recover towards 67000. Else a decisive break below it can bring 62500 into view.
Shanghai (3735.37, +0.12%) is holding above 3700 for now and keeps the scope for a rebound towards 3800 in the coming session.
Brent and WTI crude prices have rebounded and could rise toward $ 115 and $ 105, respectively, amid ongoing uncertainty over efforts to end the Iran war. Gold needs to hold above $ 4,100 to sustain its potential rally toward $ 4,300–$ 4,400, while a break below support could drag it toward $ 4,000–$ 3,900. Silver remains vulnerable to a decline toward $ 52–$ 50 below $ 60. Copper could rise toward $ 6.70–$ 6.80 if immediate support holds, while natural gas may extend its decline toward $ 2.85–$ 2.80 amid forecasts of above-average autumn temperatures in the US.
Brent ($ 110.36) and WTI ($ 99.18) prices erased an early rally on Tuesday to settle sharply lower following unconfirmed reports that Qatar and Pakistan have issued a fresh proposal to revive negotiations to end the Iran war. Today, prices have bounced back and could climb higher toward $ 115 and $ 105, respectively, in the near term.
Gold ($ 4133.70) is currently pulling back and must hold above support near $ 4,100 to keep the potential for a rally toward $ 4,300–$ 4,400 alive. Otherwise, it risks a deeper decline toward $ 4,000–$ 3,900.
Silver ($ 57.62) remains vulnerable to a drop toward $ 52–$ 50 as long as it stays below $ 60.
Copper ($ 6.61) has bounced back from its immediate support level. As long as this support holds, a further rise toward $ 6.70–$ 6.80 could be on the horizon.
Natural Gas ($ 2.9740) prices have slipped below $ 3.00 following forecasts of above-average autumn temperatures in the US. A further decline toward $ 2.85–$ 2.80 is possible in the near term.
6:00 11:30 UK CPI Y/Y
…Expected 3.4 % …Previous3.1 %
DATA YESTERDAY:-
—————
UK Unemp
…Expected 4.9 % …Previous 4.9 % …Actual 4.7 %
EU GDP
…Previous 0.6 % …Actual 0.6%
US Housing Starts
Expn 1277 K …Expected 1300 K …Previous 1275 K …Actual 1221K
