GOOD MORNING!
FOREX
The Dollar Index has scope to dip while below 98.50 as Euro holds well above 1.17 and can rise to test 1.1850. USDJPY can trade within 157-160 region for the near term. EURJPY is headed towards 186, a bounce from where can take it back to 188 else can open chances of a decline back towards 185-184. EURINR may test 110-112 while above 109/108. Pound needs to sustain well above 1.35 to move higher towards 1.37 else can dip back to 1.34/33. Aussie can test 0.72 but then if it falls from there, it can retest 0.71/70 in the near term. USDCNY may trade within 6.80-6.85 region. But any break lower would open downside chances of 6.78/75.USDINR may dip towards the lower end of the 93.50/25-92.50 region.
Dollar Index (98.109) has interim resistance at 98.50, a break above which is needed for a rise to 99 else while below 98.50, the index can fall back to 97 in. The coming days.
EURUSD (1.1780) is stable above interim support at 1.17 and while that holds, can rise towards 1.18-1.1850.
EURINR (109.6548) rise well holding above 108.50. While the rise sustains, a test of 110-112 is on the cards.
EURJPY (186.26) has fallen sharply from 188 and. Ould be headed towards immediate support at 186. Failure to bounce from 186 could open chances of a further decline to 185/184 in the medium term. Watch price action at 186.
Dollar-Yen (158.97) is stuck within a broad range of 160-157 and needs decisive break out on either side for clarity on long term direction.
USDCNY (6.8154) trades below 6.82 and if the spot does not attempt to bounce back to 6.85 or higher there can be higher chances of seeing a break below 6.80 towards 6.78/75 eventually.
Aussie (0.7171) is slowly headed towards 0.72. watch price action carefully. Failure to break higher would bring it back towards 0.71/70. Else
Pound (1.3521) is trading above 1.35 and while the rise sustains , a slow rise to 1.39 looks possible in the medium term. Else it can fall towards 1.34/33.
USDINR (92.7750) closed near interim support levels. A break below 92.75 can take it lower to 92.50 initially and then towards 92.00. For now we may expect a near term range of 92.50-93.25 to hold.
INTEREST RATES
The US Treasury Yields have dipped further. The fall to test their support is happening first in line with our expectation. Thereafter the yields can rise back again. The German Yields have failed to sustain the bounce yesterday. That leaves them vulnerable to fall more in the coming days. The 10Yr GoI has dipped. It continues to remain stuck within its narrow range. We will have to wait for the range breakout.
The US 10Yr (4.25%) and 30Yr (4.88%) Treasury yields have dipped further. The fall to 4.2%-4.15% (10Yr) and 4.8% (30Yr) is happening as expected. Thereafter we can expect the yields to bounce back. The rise to 4.5%-4.6% (10Yr) and 5.05%-5.1% (30Yr) will get delayed now.
The German 10Yr (2.98%) and 30Yr (3.54%) yields have failed to sustain the bounce. That keeps the downside open to see 2.9% (10Yr) and 3.5%-3.45% (30Yr). That in turn will delay the rise to 3.2% (10Yr) and 3.65% (30Yr) that we had mentioned earlier.
The 10Yr GoI (6.8901%) has dipped slightly. The 6.85%-6.95% range remains intact. We need to wait for the range breakout.
STOCKS
Dow and DAX are moving higher and can test 50000 and 25000 respectively, with further upside likely on a breakout. Nifty remains positive above 24000 and can rise towards 25000 in the coming weeks. Nikkei is nearing 60000 and needs a break above it to extend gains towards 61000-61500. Shanghai continues to move higher and may rise towards 4100-4150 in the near term.
Dow (49743, +0.21%) has risen and can test 50000 in the coming sessions. Thereafter, a break above 50000 is needed to rise further towards 50250-50500.
DAX (24658, +0.27%) is rising in line with our expectations and can soon test 25000. Thereafter, a break above this level is needed to move higher towards 25250-25500.
Nifty (24,364.85, +0.05%) tested 24241 before moving back to close near 24400 yesterday. While it remains above 24000, the outlook stays positive for a rise towards 25000 in the coming weeks.
Nikkei (59700, +0.67%) can rise to test 60000 in the coming sessions, and then a break above this is needed to move higher towards 61000-61500.
Shanghai (4070.529, -0.28%) tested a high of 4083 and can rise towards our earlier mentioned levels of 4100-4150 in the coming sessions.
COMMODITIES
Crude prices remain weak and direction is unclear amid ongoing Middle East uncertainty. Brent can fall towards $90-$85 or even $80 while below $100, and WTI may decline towards $80-$75. Precious metals remain firm with Gold likely to rise towards $4900-$5000 and Silver towards $82-$85. Copper continues to stay positive and can move towards $6.15-$6.25. Natural Gas may rise towards $2.80-$2.90 as long as it holds above $2.55.
Brent ($95.09) remains weak and, with ongoing uncertainty in the Middle East, the direction is still unclear. However, while below $100, a fall towards $90-$85 or even $80 can be seen in the near term.
WTI ($86.67) can fall towards $80-$75 in the near term.
Gold ($4827.10) remains on track for a rise towards our earlier mentioned levels of $4900-$5000.
Silver ($79.51) can rise towards $82-$85 in the near term.
Copper ($6.02) remains positive and can rise towards $6.15-$6.25.
Natural Gas ($2.66) can move higher towards $2.80-$2.90 while above $2.55.
DATA TODAY
GMT 6:00 IST 11:30 UK Unemp
...Market 5.20 ...Previous 5.20
GMT 12:30 IST 18:00 US Retail Sales (MoM)
...Kshitij 0.66 ...Market 1.40 ...Previous 0.63
DATA YESTERDAY
==============
GMT 12:30 IST 18:00 CA Inflation Y/Y
...Previous 2.09
DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.
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