GOOD MORNING!
FOREX
The Dollar index looks bullish for the near term which can drag Euro towards 1.14 or lower. The USDJPY and EURJPY look bullish while EURINR can decline towards 109. Aussie looks bullish towards 0.72/73 while Pound looks weak for a decline towards 1.33/32. The USDINR has room to rise more but we could initially see a decline to 95.50 before it pauses for a reversal.
Dollar Index (100.427) has moved up further while above 100. There could be scope for a rise towards 101-101.50 while above support at the 100-99.75 region. That said, it could drag EURUSD (1.1464) down to 1.14 or even 1.13.
Dollar-Yen (157.49) has moved up again after a brief dip yesterday. The view is bullish for a rise to 160. EURJPY (180.57) is also looking bullish. An initial test of 182 looks likely. Thereafter, a decisive break on the upside is needed to continue bullishness.
EURINR (109.8439) could decline to 109 unless it sees an immediate bounce back from 109.80 (less likely).
USDCNY (6.6948) has dipped further. This keeps intact our view of seeing 6.69 on the downside.
Aussie (0.7099) has dipped slightly today but the upside remains open to see 0.72/0.73 in the medium term.
Pound (1.3364) looks bearish for a slow decline towards 1.33/32.
USDINR (95.82) has room to see 96.50 in the medium term but before that we may expect an initial dip to 95.50 before it pauses for a reversal.
INTEREST RATES
The US Treasury and the German Yields have come down. However, both have support coming up which can halt this fall. The broader outlook remains bullish. As such the Treasury and the German Yields can bounce back from their support and resume their broader uptrend eventually. The 10Yr GoI remains lower. It is likely to rise back again and resume the upmove either from here itself or after some more dip.
The US 10Yr (4.95%) and 30Yr (5.28%) yields have come down. Support is at 4.85% (10Yr) and 5.2% (30Yr). So, the downside can be limited. The broader bullish view remains intact to see 5.1%-5.2% (10Yr) and 5.5% (30Yr) on the upside.
The German 10Yr (3.45%) and 30Yr (3.82%) Yields are coming down towards 3.43%-3.4% (10Yr) and 3.8% (30Yr) as expected. After this fall we expect them to resume the upmove and rise to 3.6% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.0497%) remains lower. The yield is likely to reverse higher either from here itself or after a dip to 7%. The upside remains open to see 7.15%.
STOCKS
Dow remains vulnerable below 53000, with a break below 52000 opening the way towards 51000. DAX can test 26000, with a break above this level opening 26500. Nifty needs to break above 23500 to turn bullish towards 23800. Nikkei is testing 67000 resistance, with a break above it opening 69000-70000. Shanghai is attempting to break above 3950, with a sustained break opening 4000-4050.
Dow (52395, -0.15%) has bounced back but remains vulnerable to a break below 52000. While below 53000, it can decline towards 51000. Only a sustained rise above 53000 would negate this downside risk.
DAX (25815, +0.19%) has moved up sharply in line with our expectations. It can test 26000 in the coming sessions. Thereafter, it needs to be seen whether it falls back or breaks higher towards 26500.
Nifty (23,429.00, +0.35%) tested a high of 23466 before closing slightly lower yesterday. It needs to break above 23500 to turn bullish and rise towards 23800 in the coming weeks.
Nikkei (66685, +0.33%) has risen in line with our expectations and tested the immediate resistance near 67000. If this resistance holds, a pullback can be seen. Otherwise, a break above 67000 would trigger a fresh rally towards 69000-70000.
Shanghai (3963.90, +0.35%) is attempting to break above 3950, as mentioned yesterday. A sustained break above this level would initiate a rise towards 4000-4050.
COMMODITIES
Brent and WTI have fallen sharply amid hopes of easing Middle East tensions, with $98-$96 and $90-$88 acting as crucial support regions. Gold can rise towards $4500-$4600 while above $4300. Silver can rise towards $68-$70 while above $63. Copper is testing $6.80-$6.85 resistance, with a break above it opening $7.00 and higher. Natural Gas remains range-bound between $2.80-$3.00.
Brent ($100.99) and WTI ($92.90) have fallen sharply in line with our expectations amid hopes of easing tensions in the Middle East. The support regions near $98-$96 and $90-$88 remain crucial. A break below these levels would trigger further bearishness.
Gold ($4386.60) is moving higher and can rise towards $4500-$4600 while holding above $4300.
Silver ($66.79) can rise towards $68-$70 while above $63.
Copper ($6.81) is moving higher in line with our expectations. The $6.80-$6.85 resistance region remains crucial. A rejection from this region could trigger a sharp pullback. A break above it could initiate a new rally towards $7.00 and higher. Need to wait and watch.
Natural Gas ($2.84) can continue to trade within the mentioned $2.80-$3.00 range for some time.
DATA TODAY
No major data release today.
DATA YESTERDAY:-
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no major data release yesterday.
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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