GOOD MORNING!
FOREX
The Dollar Index is expected to hold above 101.50 and recover toward 102+, while EURUSD may extend toward 1.1250–1.13 before its longer-term downtrend resumes. USDJPY is likely to consolidate within 157.50–159, while EURJPY faces key resistance at 178, with failure to break higher keeping it in a 176–178 range. EURINR is expected to trade between 105.70 and 107.10, while USDCNY remains bearish toward 6.65. The Aussie needs to break above 0.7050 to target 0.71; otherwise, it may retreat toward 0.6975–0.6950, while the Pound could rise toward 1.35. USDINR may test 94.30–94.00 while below 94.50 before rebounding toward 95 and eventually higher. Downside could be limited for USDINR in the near term.
Dollar Index (101.72) is likely to hold above 101.50 and bounce back towards 102+ in the coming sessions while EURUSD (1.1228) has scope to extend the rise towards 1.1250/60 to a maximum of 1.13 before resuming the longer-term downtrend.
Dollar-Yen (158.08) could remain in a consolidation mode within the 157.50-159 region, while EURJPY (177.51) is headed to 178. Note that 178 is an important near-term resistance, a break above which is needed for the pair to turn bullish for the medium term. Else, a fall from 178, if seen, can indicate a ranged movement within 178-176 region.
EURINR (106.1261) has scope to trade within 105.70-107.10 region for the coming days unless a breakout on either side of the mentioned range is seen.
USDCNY (6.6746) continues to decline as expected. It is headed towards 6.65.
Aussie (0.7013) has dipped today from yesterday’s high of 0.7036. A break above 0.7050 is needed for a further rise towards 0.71 or higher; else, the spot can again fall back towards the 0.6975-0.6950 region.
Pound (1.3384) can target 1.35 in the coming weeks.
USDINR (94.4650) managed to close below 94.50 yesterday as expected. It would be crucial to see how long the spot can sustain below 94.50 as the maximum expected downside within the current movement is to 94. We may expect a rebound from 94.10-94.30 region in the next few sessions, taking the spot back towards 95 and eventually higher.
INTEREST RATES
The US Treasury Yields remain lower. As mentioned yesterday, there is not much room on the downside. They can test their support and then rise back to resume the broader uptrend. The German Yields have inched up. Support is there to limit the downside from here. The yields can rise back and go higher eventually. The 10Yr GoI has risen, breaking the range on the upside. The bullish view is intact. The yield can rise more from here.
The US 10Yr (5.10%) and 30Yr (5.39%) yields remain lower and stable. The downside is still open to see 5%-4.95% (10Yr) and 5.4% (30Yr) first. Thereafter a fresh rise can take them higher to 5.35%-5.4% (10Yr) and 5.7%-5.75% (30Yr).
The German 10Yr (3.42%) and 30Yr (3.76%) Yields have inched up slightly. We expect them to test 3.35% (10Yr) and 3.75%-3.7% (30Yr) and then rise back towards 3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.4427%) has risen breaking the 7,35%-7.42% range on the upside as expected. Our bullish view of seeing 7.5% on the upside remains intact.
STOCKS
Global markets remain mixed, with the Dow and DAX expected to rise further towards 53500-54000 and 25800-26000, respectively. Nifty is likely to remain range-bound between 22,500 and 23,000, while the Nikkei needs to sustain above 64000 to recover towards 67000. Shanghai has turned weak after falling below 3700, and a sustained break below this level could drag it towards 3600-3500.
Dow (52861.30, +0.69%) has risen in line with our expectations and can move higher towards 53500-54000 in the near term.
DAX (25645.02, +1.35%) has bounced back sharply in line with our expectations, supported by stronger performance in AI-related stocks. A further rise towards 25800-26000 can be seen in the near term.
Nifty (22,811.35, −0.34%) tested a low of 22,649 before closing higher. It has managed to close above the crucial 22,800 level for now. Overall, the index is expected to trade within the 22,500-23,000 range for some time.
Nikkei (64070.40, -0.68%) remains weak and needs to sustain above 64000 to recover towards 67000. Otherwise, a decisive break below 64000 could bring the 62500-62000 region into focus.
Shanghai (3693.64, -0.52%) has fallen below 3700, contrary to our expectations. If it sustains below this level, the index could turn bearish and decline towards 3600-3500.
COMMODITIES
Brent and WTI remain uncertain, with near-term ranges of 105-112 and 95-100, respectively. Gold can trade sideways within 4100-4200, with a break above or below this range determining the next move. Silver is likely to remain range-bound between 55-60. Copper needs to sustain above 6.52-6.53 to avoid a further decline towards 6.45-6.40, while Natural Gas may fall further towards 2.6-2.5 amid forecasts of above-average autumn temperatures in the US.
Brent ($110.15) traded lower earlier on Wednesday as oil continues to flow through the Strait of Hormuz despite stepped-up Iranian attacks. The outlook remains mixed, with a near-term trading range of 112-105.
WTI ($98.20) has also dipped, while the near-term outlook remains uncertain. The trading range of 95-100 is expected to remain intact for some time.
Gold ($4130.80) can trade sideways within the narrow range of 4100-4200 for some time, as long as support at 4100 holds. Thereafter, it remains to be seen whether this support triggers a rebound towards 4300-4400 or breaks, dragging prices down towards 4000-3900.
Silver ($57.37) can continue to trade sideways within the 60-55 range for some time.
Copper ($6.54) has declined, contrary to our expectations. It needs to sustain above the immediate support zone of 6.53/52 to prevent a further decline towards 6.45-6.40.
Natural Gas ($2.7740) plunged this week amid forecasts of above-average autumn temperatures in the US, which could curb natural gas heating demand. A further decline towards 2.6-2.5 is possible in the near term.
DATA TODAY
No major data release today.
DATA YESTERDAY:-
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UK CPI Y/Y
...Kshitij Expnn.3.2 % ...Expected 3.4 % ...Previous 3.1 % ...Actual 3.4 %
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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