The downside in the dollar index looks limited. We can expect it to go higher either from here itself or after some more dip. That in turn will keep the upside capped for the EURUSD and drag it lower in the coming days. Dollar-Yen is sustaining the bounce seen on Friday. A further rise in the near-term looks possible. This rise can aid the EURJPY also to go higher. EURINR has dipped but has support coming up. The Cross can hold above this support and can rise back and go higher. USDCNY has bounced back. But resistance can cap the upside and keep the broader downtrend intact. More fall is on the cards. Aussie can go higher in the coming days. Pound on the other hand can dip first from here and then can resume its upmove. The USDINR pair is likely to breach the immediate psychological resistance and go up.
Dollar Index (101.75) has good support around 101.30 which can limit the downside. While this support holds, there are good chances to breach 102 eventually and rise to 103-103.50.
EURUSD (1.1204) looks vulnerable to see 1.1150-1.11 on the downside while it remains below the 1.1250-1.1260 resistance zone.
Dollar-Yen (156.95) is sustaining Friday’s bounce from the low of 156.07. That keeps the upside open to see 158 in the near term. 156-155.50 is a good support that limit the downside in case the pair turns down again.
The expected rise mentioned above in the Dollar-Yen can take the EURJPY (175.85) higher to 178 in the coming days. Support for the cross is around 175.
EURINR (106.077) has dipped but has support in the 106-105.80 region. While that holds, a rise back to 107-107.50 is possible.
USDCNY (6.6697) has bounced back slightly. But resistance at 6.675 can cap the upside and keep the broader downtrend intact. Our view of seeing a fall to 6.65 remains intact.
Aussie (0.7027) remains stable above 0.7 over the last few days. While above 0.7, we see high chances for the pair to break 0.7050 and rise to 0.71 and even 0.72 in the coming weeks.
Pound (1.3365) can dip to 1.33 in the near-term. A bounce thereafter can take it back up to 1.34-1.35.
USDINR (94.95) is likely to breach 95 and go up to 95.50 this week.
The US Treasury Yields have bounced back. Failure to sustain this bounce can still drag them lower going forward. Need to wait and watch. The German Yields remain lower. Failure to get a strong bounce from here can take the yields much lower from here. The 10Yr GoI is heading up in line with our expectation. The price action in the coming days will need a watch as the yield will enter into an important resistance zone.
The US 10Yr (5%) and 30Yr (5.32%) has risen back. A follow-through rise from here can take them up to 5.15%-5.2% (10Yr) and 5.4% (30Yr). That in turn will reduce the chances of seeing 4.85% (10Yr) and 5.2% (30Yr) on the downside.
The German 10Yr (3.34%) and 30Yr (3.68%) Yields remain lower and stable. While below 3.35% (10Yr) and 3.7% (30Yr), a fall to 3.25% (10Yr) and 3.6% (30Yr) cannot be ruled out. That will delay the rise back to 3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.4740%) is heading up towards 7.5% in line with our expectation. The price action in the 7.5%-7.6% will need a close watch to see if a reversal is happening or not.
Global stock indices remain largely under pressure. The Dow Jones ($ 52,000 support) and DAX ($ 25,000 support) are holding key levels for potential bounces toward $ 53,000–$ 53,500 and 25,600–25,800. Meanwhile, Asian markets face ongoing weakness: Nifty’s temporary recovery toward 22,700–22,750 risks giving way to further declines toward 22,350–22,250, while Nikkei (below 64,000) and Shanghai (below 3,700) remain vulnerable to moves toward 62,000 and 3,600–3,550 respectively.
Dow (52220.21, -1.24%) plummeted to a low of 52060 on Friday, contrary to our expectations. Immediate support is now coming near 52000; while this holds, a bounce back to 53000–53500 remains possible. On the other hand, if this level breaks, targets of 51000 and lower will come into play.
DAX (25181.65, -0.75%) continues to trade lower amid persistent tech weakness and elevated energy prices, having tested a low of 25013. Support near 25000 needs to hold to initiate a bounce back toward the 25600–25800 zone in upcoming sessions.
Nifty (22600.00, -0.39%) tested a low of 22372 before managing to close at its current level. While a slight bounce back toward 22700–22750 is possible in today’s session, the overall outlook remains bearish with scope for a further decline toward 22350–22250.
Nikkei (62415.84, +0.12%) has edged slightly higher, but as long as it remains below 64000, our view continues to favor a decline toward 62000 in the near term.
Shanghai (3673.57, -0.43%) fell to a low of 3574 before bouncing back sharply to close higher at 3690 on Friday. However, while trading below 3700, it remains vulnerable to a decline toward 3600–3550.
Crude oil and precious metals remain under selling pressure, with Brent ($ 117 resistance) and WTI ($ 104 resistance) eyeing further pullbacks, while Gold risks a breakdown below $ 4,000 and Silver slides toward $ 52–$ 50. In contrast, Copper is trending higher toward $ 6.60 after a solid bounce off $ 6.35 support, and Natural Gas has stabilized into a $ 2.7–$ 3.2 range following a contract rollover gap-up.
Brent ($ 115.27) tested 117.45 on Friday and has pulled back today as expected. While the resistance near 117 holds, a further fall towards 114–112 can be seen. Alternatively, a break above 117 is needed to see a rise towards 119–120.
WTI ($ 101.41) tested a high of 103.92 on Friday as expected. Today, it has dipped as there is immediate resistance near 104. While this holds, a further fall towards 100–98 can be seen. A break above 104 is needed to trigger a further rise towards 106–108.
Gold ($ 3995.80) is attempting a break below 4000, and if it succeeds, the previously mentioned fall to 3900–3800 can be seen. Given the current momentum, the chances of this happening remain high.
Silver ($ 53.74) continues to fall in line with our expectations and could decline further towards $ 52–$ 50 in the near term.
Copper ($ 6.49) bounced back sharply from the support near 6.35, reaching a high of 6.53 as anticipated. A further rise to 6.60 can be seen in the coming sessions.
Natural Gas ($ 2.9890) plunged by -15% over the week due to forecasts of above-average US autumn temperatures, which could curb heating demand, testing a low of 2.62 contrary to our expectations. However, it has seen a sharp gap-up opening near 3 today as the November contract expired and the December contract took effect. While the price remains above 2.7, a trading range of 3.2–2.7 could hold for some time.
8:00 13:30 GER IFO Business Climate Index
…Expected 89.80 …Previous 89.90
8:00 13:30 GER IFO Business Situations Index
…Previous 89.5
8:00 13:30 GER IFO Business Expectations Index
…Previous 90.4
FRIDAY’S DATA:-
—————
UK Cons Conf
…Expected -14 …Previous -13 …Actual -24
JP CPI
…Expected 2.10 …Previous 1.89 …Actual 2.10
