GOOD MORNING!
FOREX
The forex market appears to be driven by the plunge in USDJPY, which has dragged the Dollar Index lower while the other currencies strengthen against the US Dollar. Euro can test 1.17, EURINR is headed towards 112.50, and USDCNY can test 6.70, while Aussie and Pound look bullish for the near term. USDINR rose to close above 94.80 yesterday. Sustained rise could push it towards 95.00–95.25 before pausing for a reversal.
Dollar Index (98.806) seems to be in a declining trend and can test 98.50 in the near term. A break below 98.50, if seen would open up chances of a further decline towards 98.00-97.60. Correspondingly, EURUSD (1.1629) is bullish towards 1.17 in the next few sessions.
Dollar-Yen (153.64) could test 152 in the near term and a decisive break below that, if seen would turn further bearish towards 150-148 before a rebound is seen in the medium term. EURJPY (178.69) seems to have peaked out and looks bearish for the medium term towards 175-174.
EURINR (110.279) has risen as expected, and if it holds well above 110-110.50, it can slowly target 112.50 in the coming days.
USDCNY (6.7082) looks bearish towards 6.70.
Aussie (0.7223) is headed towards 0.73-7350 in the near term, while Pound (1.3546) looks bullish above 1.3480 for a rise towards 1.37-1.3750 in the medium term.
USDINR (94.8225) inched higher yesterday to close above 94.80, contrary to our expectations. While above 94.50, the spot can have decent chances of testing 95.00-95.25 before pausing for a reversal.
INTEREST RATES
The US Treasury Yields remain higher and stable. The outlook remains bullish to see more rise. Support can limit the downside from here. The German Yields have dipped slightly. They need to rise back and get a strong follow-through buying to go higher. We will have to wait and see. The 10Yr GoI has dipped slightly. Support is there to limit the downside and keep alive the chances of rising back again.
The US 10Yr (4.79%) and 30Yr (5.24%) yields remain higher and stable. While above 4.75%-4.73% (10Yr) and 5.2% (30Yr), the outlook is bullish to see a rise to 4.9%-5% (10Yr) and 5.4% (30Yr).
The German 10Yr (3.36%) and 30Yr (3.82%) Yields have come down slightly. The 10Yr must sustain above 3.35% and get a strong follow-through rise from here to go up to 3.5%. The 30Yr has to breach 3.85% for a rise to 4%. We will have to wait and watch.
The 10Yr GoI (6.9431%) has dipped below 6.95%. Any further dip can find support at 6.9%. While that holds, the upside will still remain open to see 7.15%. Only a break below 6.9% will negate this rise.
STOCKS
Dow remains weak below 53000 and can dip towards 52500 before consolidating within 52500-54000. DAX remains uncertain for now. Nifty needs to hold 23600 for a recovery towards 23800. A break below 23600 could extend the decline towards 23500. Nikkei remains positive above 64000 and can rise towards 67000-68000. Shanghai remains range-bound between 3850-4000 while below 4000.
Dow (52778.23, -0.10%) has fallen below 53000 and can dip further towards 52500. It can then sustain within 52500-54000 for some time.
DAX (25889.46, -0.47%) has fallen back, contrary to our expectations. The direction looks mixed for now. While below 26000, a fall towards 25500 can be seen. A sustained break above 26000 would take it higher towards 26500.
Nifty (23,635.10, -0.61%) tested a low of 23623 in line with our view. It needs to hold above 23600 to move higher towards 23800. Otherwise, the decline can extend towards 23500, from where a bounce can be expected.
Nikkei (65315.18, +0.32%) has dipped, but while above 64000, it can see a rise towards 67000-68000.
Shanghai (3947.87, +0.18%) can continue to trade within the range of 3850-4000 for some time while below 4000.
COMMODITIES
Brent and WTI have reached the mentioned levels as expected, with a break above $100 and $95 respectively opening the way towards $110 and $100. Gold remains positive above $4300 and can rise towards $4600. Silver needs to sustain above $70 for a move towards $75-$80. Copper remains weak below $6.80 and can dip towards $6.70-$6.60. Natural Gas remains range-bound between $2.80-$3.00 while below $3.00.
Brent ($99.38) and WTI ($94.38) have risen to the mentioned levels as expected. A break above $100 and $95 would trigger a fresh rise towards $110 and $100 respectively in the near term.
Gold ($4419.60) needs to sustain above the support near $4300 to keep alive the chances of a rise towards $4600.
Silver ($66.70) needs a sustained break above $70 to move higher towards $75-$80.
Copper ($6.76) has failed to break above $6.80, and while this level holds, a dip towards $6.70-$6.60 can be seen.
Natural Gas ($2.90) has fallen back after failing to breach $3.00. While this level holds, a range of $2.80-$3.00 could hold for some time.
DATA TODAY
1:30 07:00 CN CPI (YoY)
...Expected 0.8 ... Previous 0.5 ...ActUAL 0.8%
1:30 07:00 CN PPI
...Expected 3.6 % ...Previous 3.5% ...Actual 3.8%
DATA YESTERDAY:-
----------------
JP GDP
...Expected 0.4% ...Previous 0.3% ...Actual 0.4%
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.
WARNING !!
Visitors should be aware that Foreign Exchange transactions and trading are or can be subject to laws, rules and regulations of the country in which the entity undertaking the transactions is situated. It is incumbent upon the Visitors to keep themselves informed and abreast of the Laws they are (or would be expected to be) subject to and governed by, and act in accordance thereto.
