GOOD MORNING!
FOREX
The Dollar index continues to drag itself along the support trendline on the 3-day charts ahead of the US CPI data release today. Euro is ready for a dip from current levels to fall below 1.15. USDJPY can aim for 160-161 while above 159. EURJPY can slowly rise towards 185-160 region if it breaks above immediate resistance at 184. EURINR needs to dip from resistance near 110.30 to fall to 109-108. Aussie and Pound can test 0.71 and 1.3550 before facing rejection from there. USDCNY can target 6.70 in the near term while below 6.75. USDINR could trade below 95.50 for now. A break above this level is needed for a test of 95.75 or higher. Till then the spot can trade between 95.00-95.50.
Dollar Index (99.84) is stuck near the support level on the 3-day chart and seems to be trading along the support trendline. It needs to bounce from here to rise towards 100-101 in the coming days.
EURUSD (1.1539) is also trading steady over the last few sessions, waiting for a dip below 1.15. We may soon see the expected dip to materialize.
Dollar-Yen (159.30) is slowly attempting to rise towards 160-161 while above 159.
EURINR (110.0708) is trading at crucial levels just now, a break higher or lower from here could set the near term trend either towards 109-108 or higher towards 111 while EURJPY (183.83) has tested earlier support turned resistance at 184 and needs to break above this to turn further bullish towards 185-186 else can decline from here back towards 183-182. Watch price action near 184.
USDCNY (6.7450) continues to dip towards 6.70 while below 6.75.
Aussie (0.7057) looks stable. A slow upmove could be established towards 0.71.
Pound (1.3504) needs to sustain above 1.35 to rise from here. Else a dip back below 1.35 can turn bearish for a dip towards 1.33 again.
USDINR (95.4250) closed higher yesterday. A rejection from 95.50 is needed for the spot to dip back towards 95.25/10 else a break above 95.50, if seen can turn it bullish towards 95.75 in the next few sessions.
INTEREST RATES
The US Treasury Yields have come down from their highs. But supports are there to limit the downside and keep the broader uptrend intact. The US CPI data release today will need a close watch. The German Yields have dipped. We expect them to bounce back from their support and go higher eventually. The 10Yr GoI tested its resistance but failed to breach it. A sustained break above the resistance is needed to go higher and delay the expected fall.
The US 10Yr (4.69%) and 30Yr (5.24%) yields have come doen from their highs of 4.74% and 5.28%. Support is there at 4.65%-4.6% (10Yr) and 5.2%-5.15% (30Yr). While above this support, the bullish will remain intact to see 4.8% (10Yr) and 5.35%-5.4% (30Yr)
The German 10Yr (3.16%) and 30Yr (3.65%) Yields have dipped slightly. While above 3.1% (10Yr) and 3.6% (30Yr), the outlook is bullish to see 3.3%-3.35% (10Yr) and 3.8% (30Yr).
The 10Yr GoI (6.7791%) tested 6.8% but failed to breach it. That keeps intact our bearish view of seeing a break below 6.75% and a fall to 6.7% first and then to 6.6%. A sustained break above 6.8% can take it up to 6.85% and will delay the expected fall.
STOCKS
Global equities remain mixed. Dow is likely to stay range-bound within the 53000-55000 range. DAX remains constructive and can rise towards 27000 on a sustained break above 26500 while support at 26000 holds. Nifty remains weak below 24500 and can decline towards 24350 before resuming its broader uptrend towards 24800-25000. Nikkei continues to strengthen and can rally further towards 68000-70000. Shanghai has turned weaker after facing resistance near 3970 and can decline towards 3900-3850 in the near term.
Dow (53888.38, +0.01%) has weakened and could continue to trade within the broad range of 53000-55000 for some time.
DAX (26440.18, -0.10%) is attempting to break above 26500, and a sustained break above this level would extend the rally towards 27000 or higher. While the immediate support at 26000 holds, the rise towards 27000 remains likely.
Nifty (24,471.70, -0.46%) remains below 24500 for now. The downside risk towards 24350 remains intact as long as it stays below 24500. Thereafter, it could resume its upward move towards 24800-25000 in the broader term.
Nikkei (67300.91, +0.30%) is rallying higher in line with our expectations and can rise further towards 68000-70000 in the near term.
Shanghai (3943.67, +0.23%) has pulled back contrary to our expectations after facing resistance near 3970. While this resistance holds, a further decline towards 3900-3850 can be seen.
COMMODITIES
Brent and WTI likely to remain within the $80-$95 and $75-$90 ranges respectively. Gold remains strongly bullish after testing $4495 and can rise further towards $4600-$4650 on a break above $4500, while Silver has strengthened above $65 and can advance towards $70. Copper has recovered modestly but remains vulnerable to a decline towards $6.50-$6.45. Natural Gas continues to hold above the key $2.60 support and can rise further towards $2.80-$3.00 in the near term.
Brent ($89.50) and WTI ($83.83) are continuing their upward movement and are likely to remain broadly range-bound between $80-$95 and $75-$90 respectively for some time.
Gold ($4457.70) tested $4495 in line with our expectations and can break above $4500 and rise further towards $4600-$4650 in the near term.
Silver ($66.54) has risen above $65, as expected, and can advance further towards $70 in the coming sessions.
Copper ($6.64) has recovered slightly but remains vulnerable to a decline towards $6.50-$6.45 in the coming sessions.
Natural Gas ($2.7610) can rise further towards $2.80-$3.00 in the near term while it holds above the support at $2.60.
DATA TODAY
12:00 17:30 IN CPI
...Kshitij Expn. 4.3 % ...Expected 4.5 % ...Previous 4.4 %
12:30 18:00 US CPI (MoM)
...Kshitij Expn. 0.0 ...Expected 0.1 ...Previous -0.4
12:30 18:00 US Core CPI (MoM)
...Kshitij Expn. 0.0 % ...Expected 0.2 %...Previous 0.0 %
DATA YESTERDAY:-
----------------
RBA Meeting
...Expected 4.35 % ...Previous 4.35 % ...Actual 4.4 %
US Existing Home Sales
...Kshitij Expn. 4069 K ...Expected 4050 K ...Previous 4130 K ...Actual4060K
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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