GOOD MORNING!
FOREX
Overall the Dollar Index and Euro are range bound between the broad 98-99 and 1.16-1.18 region. USDJPY can trade within 157-160 region for the near term while the EURJPY is stuck in the 186-188 zone. EURINR may test 109/108 before again rising towards 110-112. Pound an be headed towards 1.34/33 on a sustained fall below 1.35. Aussie can trade within 0.70-0.72 region for the near term while the Yuan is stuck within 6.80-6.83 region.
USDINR has risen sharply as expected and could be headed towards 94-94.30 soon.
Dollar Index (98.60) has risen slightly but is range bound in the 98-99 region while the EURUSD (1.1708) has fallen to support at 1.17 as expected and a break below this level can open up chances of a decline to 1.1650-1.16 soon.
EURINR (109.9480) has dipped after testing immediate resistance near 110.40. While that holds, EURINR can dip to 109.5-109 region. However, in the longer run we need to see if the currency breaks above 110.4 to head towards 112 or falls below 109 to test 108/107.
EURJPY (186.66) looks range bound between 186-188 region for the near term.
Dollar-Yen (159.47) has risen slightly from levels seen yesterday but also looks likely to consolidate between 157/158-160 region for the near term.
USDCNY (6.8269) is trading well above 6.82 today. The movement is likely to remain stuck within the 6.80-6.83 region for sometime unless we see a clear break out on either side of this range.
Aussie (0.7156) is likely to fall to 0.71/70 while below resistance at 0.72.
Pound (1.3496) has dipped below 1.35 and if the fall sustains, there can be scope for a fall to 1.34/33.
USDINR (93.80) rise yesterday as expected and could rise further towards 94-94.30 before pausing for any decline from there.
INTEREST RATES
The US Treasury Yields are moving up towards the upper end of their range. Need to see if the expected bullish breakout is happening now or the yields are turning down again to retain range. The German Yields remain stable. They need a strong follow-through rise from here to avoid falling back and go up straight away. We will have to wait and watch. The 10Yr GoI has bounced back. The immediate outlook remains unclear as the yield is still stuck inside the narrow range.
The US 10Yr (4.31%) and 30Yr (4.91%) Treasury yields are coming close to the upper end of their 4.2%-4.35% (10Yr) and 4.85%-4.95% (30Yr) range. Need to see if the expected bullish breakout and the rise to 4.5%-4.6% (10Yr) and 5.05%-5.1% (30Yr) is happening now or not.
The German 10Yr (3.01%) and 30Yr (3.56%) yields remain stable. A strong follow-through rise is needed from here to avoid the fall to 2.9% (10Yr) and 3.5%-3.45% (30Yr) first. Only then the rise to 3.2% (10Yr) and 3.65% (30Yr) can happen straight-away.
The 10Yr GoI (6.9225%) has risen back. Immediate outlook remains unclear as the yield is stuck inside the 6.85%-6.95% range. We will have to wait for the range breakout.
STOCKS
Dow has turned weaker below 50000 and can decline towards 49000-48500. DAX may test 24000 before a possible bounce. Nifty has dipped and needs a break above 24600 to regain strength towards 24800-25000. Nikkei is attempting to break 60000 and can rise towards 61000-62000 on a sustained breakout. Shanghai remains strong above 4100 and can move higher towards 4150-4200.
Dow (49281, -0.91%) is falling after failing to break above 50000, and while below this level a further decline towards 49000-48500 can be seen.
DAX (24348, -0.39%) continues to decline and can test 24000 in the near term before a bounce back is seen.
Nifty (24,378.10, -0.81%) has dipped and needs a sustained break above 24600 for a further rise towards 24800-25000 over the coming weeks.
Nikkei (59820, -0.14%) is attempting to break past 60000, and a sustained break above this level is needed to move higher towards 61000-62000.
Shanghai (4106.25, +0.52%) has moved above 4100 in line with our expectations and can move higher towards 4150-4200.
COMMODITIES
Crude prices have rebounded sharply amid renewed Middle East tensions but remain highly volatile. Brent can rise towards $105-$110, while WTI may test $100 before any pullback. Precious metals remain firm with Gold likely to move towards $4900-$5000 while above $4600, and Silver towards $80-$85. Copper continues to stay strong and can rise towards $6.20-$6.25. Natural Gas may move higher towards $2.80-$2.90 as long as it holds above $2.55.
Brent ($101.55) has risen above $100 contrary to our expectations amid ongoing Middle East tensions, as Iran has seized ships in the Strait of Hormuz. A further rise towards $105-$110 can be seen in the near term. The direction remains unclear as the market is highly volatile.
WTI ($92.73) has bounced back contrary to our expectations and can test $100 before any pullback is seen. The direction remains unclear due to high volatility.
Gold ($4745) can rise towards $4900-$5000 while above $4600.
Silver ($77.53) the view remains intact for a rise towards $80-$85 in the near term.
Copper ($6.13) has surged to test a high of $6.15 as expected and can rise further towards $6.20-$6.25.
Natural Gas ($2.7130) can rise towards $2.80-$2.90 while above $2.55.
DATA TODAY
GMT 23:01 IST 04:31 UK Cons Conf
...Market -25 ...Previous -21
GMT 23:30 IST 05:00 JP CPI
...Market 1.7 ...Previous 1.26
GMT 9:00 IST 14:30 GER IFO Business Climate
...Market 84.8 ...Previous 86.4
GMT 9:00 IST 14:30 GER IFO Business Situations
...Market 85.5 ...Previous 86.7
GMT 9:00 IST 14:30 GER IFO Business Expectations
...Market 83.9 ...Previous 86.0
DATA YESTERDAY
==============
GMT 6:00 IST 11:30 UK CPI Y/Y
...Market 3.30 ...Previous 3.01
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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