GOOD MORNING!
FOREX
The Dollar Index remains bearish below 99.40, with scope to slip towards 98.50 or lower after any near-term test of 99.40. EURUSD is expected to regain momentum above 1.17 and target 1.18 or higher, while Dollar-Yen may rise slowly towards 160 before easing back unless it breaks decisively higher. EURINR and EURJPY retain bullish outlooks towards 112.50 and 186-188 respectively, while USDCNY could eventually break below 6.72 towards 6.70. Aussie could target 0.72-0.73 while Pound could face initial resistance near 1.37. USDINR may remain sideways between 95.50 and 95.75, a break above 95.75 would open chances of testing 96-96.30.
Dollar Index (99.04) has risen to test very near term resistance at current level and could have scope to test 99.40 on a break above 99.05 from where we may expect the index to decline back towards 98.50 or lower in the coming sessions. View is bearish below 99.40.
EURUSD (1.1663) sems to have dipped from 1.1712 and holding lower over the past 2-sessions but it does not look like a reversal and instead the spot could again pick up momentum to rise above 1.17 soon targeting 1.18 or higher o the upside in the medium term.
Dollar-Yen (159.24) is likely to see a slow rise to 160 before falling from there towards 159-158.50 in the medium term. For the pair to turn bullish, we need a decisive break above 160.
EURINR (111.67) is seeing a corrective dip from 112.1038 which could extend to 111.45 or slightly lower but overall view remains bullish for a rise to 112.50 before a sharper decline can be expected.
EURJPY (185.75) is rising and headed towards 186-188 while USDCNY (6.7252) could remain above 6.72 for sometime before eventually breaking below 6.72 to target 6.70 on the downside.
Aussie (0.7152) looks bullish to 0.72 a break above which can take it higher towards 0.73 in the longer run while Pound (1.3631) could face mild resistance below 1.37 before seeing an eventual breakout to the upside.
USDINR (95.75) could continue to trade in a sideways range between 95.75-95.50. A break on the upside, if seen will trigger further rise to 96-96.30. Watch price action for the next few sessions.
INTEREST RATES
The US Treasury and the German Yields continue to sustain higher but are stable. The Treasury Yields remain bullish and can rise more. The US PCE data release tomorrow will need a close watch. The German Yields have some room to rise from here. A corrective fall is possible thereafter before the upside extends further. The 10Yr GoI is holding above its intermediate support. That keeps the upside open to see more rise before the broader downtrend resumes.
The US 10Yr (4.71%) and 30Yr (5.24%) yields remain stable. Bullish view remains intact. The 10Yr can break the 4.59%-4.75% on the upside and rise to 4.8% first and then to 5%. The 30Yr can rise to 5.4%. Support is at 5.15%-5.1%.
The German 10Yr (3.25%) and 30Yr (3.75%) Yields continue to remain stable. The upside is open to see 3.3%-3.35% (10Yr) and 3.8% (30Yr) before a corrective fall happens.
The 10Yr GoI (6.8708%) is managing to hold above 6.85%. That keeps the upside open to see 6.9%-6.95% first before the broader downtrend resumes again. As mentioned yesterday 6.8%-6.9%/6.95% can be the broad trading range.
STOCKS
Global equities remain mixed. Dow and DAX are holding a constructive bias and can rise towards 53500-54000 and 26250-26500 respectively. Nifty remains positive above the key 24100 support and can move towards 24400 over the week. Nikkei continues to face resistance near 66000 and remains vulnerable to a decline towards 64500-64000. Shanghai remains weak below 3900 and can decline further towards 3800 in the near term.
Dow (53458.26, -0.06%) while holding above the support near 52800, can rise towards 53500-54000 in the coming sessions.
DAX (26183.28, +0.28%) can rise towards 26250-26500 in the near term while it holds above 26000.
Nifty (24,219.05, -0.14%) dipped lower and tested a low of 24144 before recovering to close higher. Immediate support near 24100 needs to hold to maintain the bullish view towards 24400 over the week.
Nikkei (65760.11, +0.58%) is hovering below 66000 and remains vulnerable to a decline towards 64500-64000 in the near term.
Shanghai (3876.24, -0.15%) fell to test a low of 3855 yesterday, in line with our expectations. A further decline towards 3800 remains likely while below 3900.
COMMODITIES
Commodities remain broadly constructive, with Brent and WTI likely to remain range-bound within $80-$95 and $75-$90 respectively. Gold continues to strengthen in line with expectations and can rise further towards $4750-$4800. Silver can advance towards $70-$75, while Copper can rise towards $6.65-$6.75. Natural Gas has reached $2.80 as expected and can extend its gains towards $3.00 in the coming sessions.
Brent ($92.90) and WTI ($85.82) are likely to remain broadly range-bound between $80-$95 and $75-$90 respectively for some time.
Gold ($4698.20) has risen in line with our expectations and can continue its upward momentum towards $4750-$4800 in the near term.
Silver ($68.20) can rise further towards $70-$75 in the near term.
Copper ($6.60) can rise further towards $6.65-$6.75 in the near term.
Natural Gas ($2.8150) has risen to $2.80 in line with our expectations and can move further higher towards $3.00 in the coming sessions.
DATA TODAY
8:00 13:30 GER IFO Business Climate
...Expected 87.2 ...Previous 86.6
8:00 13:30 GER IFO Business Situations
...Expected 87.0 ...Previous 86.5
8:00 13:30 GER IFO Business Expectations
...Expected 87.5 ...Previous86.7
13:00 18:30 US Case Schiller
...Expected 1.9 % ...Previous 1.6 %
14:00 19:30 US Cons Conf
...Kshitij Expn. 94.8 ...Expected 90.3 ...Previous 90.8
DATA YESTERDAY:-
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No major data release yesterday.
14:00 19:30 US Cons Conf 94.8 90.3 90.8 -
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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