GOOD MORNING!
FOREX
The DXY can decline towards 96.00-95.50 with upside capped at 97.50. EURUSD can attempt to rise towards crucial resistance near 1.20 while above 1.18 while .
EURINR can test support at 106 and bounce back towards 109-110. EURJPY has support near 180 from where a rebound can take the pair back to 184/186 in the medium term while USDJPY can fall towards support near 151 before rebounding to 156. USDCNY can drift toward crucial support at 6.85. The Aussie can target 0.7150-0.7200 while the Pound needs to sustain above 1.37 to head toward 1.38+ levels. USDINR can remain ranged within the 90.30-91.00 region for now with scope for a rise to 91.25/91.50 in the coming weeks.
Dollar Index (96.885) has risen slightly after testing 96.49 on the downside yesterday. US NFP came in higher while unemployment data dipped. With scope for a possible test of 96.00-95.50 in the next few sessions, immediate upside could be capped near 97.50/98.
EURUSD (1.1878) can head towards 1.20/21 while above the near term support at 1.1850.
EURINR (107.7556) has support near 106 which can be tested in the next few sessions followed by a slow rise to 110 in the medium term. A broad range of 106-110 can hold for the medium term.
EURJPY (181.61) has continued to fall further today breaking below the support at 183. Lower support is now seen near 180 from where a rebound if seen can still have some scope for a rise towards 184/186 in the medium term; else failure to hold a above 180 can make the pair vulnerable to long term bearishness.
Dollar-Yen (152.96) has declined further and could test support near 151 before bouncing back towards 156 in the medium term. Failure to hold above 151 would bring in 148 into the picture.
USDCNY (6.9009) tested 6.8997, extending it's fall as expected. A test of crucial support at 6.85 looks possible before rising back towards 6.90/95.
Aussie (0.7140) is rising as expected and can test 0.7150-0.7200.
Pound (1.3631) will have to break above 1.37 to rise further towards 1.38/39. While below 1.37, there can be scope for a dip back to 1.35.
USDINR (90.7038) seems to be consolidating below 90.75. A sustained break above this level will open the way towards 90.85–91.00 in the coming sessions.
INTEREST RATES
The US Treasury yields have risen back well after the jobs data release. The US added 130K jobs to its NFP. The unemployment rate fell to 4.3% from 4.4%. If the bounce in the yields sustain, further rise is possible. Broadly, the yields can oscillate in a range and can move up within it. The German yields have come down to their supports as expected. Failure to bounce back from here can drag them further lower from here. The 10Yr GoI is also at its intermediate support. We expect a rise from here. However, a little extended fall cannot be avoided before the expected rise happens in case the yield breaks the support from here. We will have to wait and watch.
The US 10Yr (4.17%) and 30Yr (4.81%) Treasury yields have risen back well from near their support at 4.1% (10Yr) and 4.75% (30Yr). While this bounce sustains a rise to 4.25%-4.3% (10Yr) and 4.9%-4.95% (30Yr) is possible. Broadly, 4.1%-4.3% (10Yr) and 4.75%-4.95% (30Yr) is the trading range for now.
The German 10Yr (2.79%) and 30Yr (3.45%) yields have come down to 2.8% (10Yr) and 3.45% (30Yr) in line with our expectation. Failure to rise back from here can drag it down to 2.75% (10Yr) and 3.4% (30Yr) in the coming days.
The 10Yr GoI (6.7088%) is at its support level of 6.7%. We expect a bounce from here towards 6.8%. In case of a break below 6.7%, a fall to 6.6% can happen first and then the rise to 6.8% can be seen.
STOCKS
Global equities are holding firm with a mildly positive bias. The Dow needs a sustained move above 50500 to target 52000. DAX must break above 25000 to avoid a dip towards 24800–24500. Nifty remains bullish for 26000–26500 despite a slight dip. Nikkei is advancing towards 58000–58500, while Shanghai stays positive to test 4200 before a corrective pullback towards 4100–4000.
The Dow (50268.14, +0.13%) has edged higher. A sustained break above 50500 is required to open the way towards 52000.
DAX (24998.85, +0.18%) continues to hold below 25000. A decisive break above this level is needed for further upside. Else, it may slip towards 24800/24500 in the near term.
Nifty (25953.85, +0.07%) has dipped slightly. The outlook remains positive for a rise towards 26000-26500 in the near term. The broader trend stays bullish.
Nikkei (57675.00, -0.89%) has rebounded and can move higher towards our target of 58000-58500 in the near term.
Shanghai (4134.18, +0.04%) has risen in line with expectations and remains bullish to test 4200 before a corrective pullback towards 4100-4000.
COMMODITIES
Brent and WTI tested recent highs but need to break above $70 and $66 respectively to gain fresh momentum, otherwise they may remain range-bound within $70–$66 and $66–$62. Gold must sustain above $5100 to target $5300–$5500, failing which it risks a decline towards $4800–$4700. Silver faces resistance near $90 that could limit the rise and drag it towards $70–$65. Copper needs a firm move above $6.00 to extend higher towards $6.20–$6.40. Natural Gas has rebounded from support with scope to rise towards $3.30–$3.50 as long as that support holds.
Brent ($69.60) rose to a high of $70.72 yesterday. While it remains below $70, it can trade within the $70–$66 range.
WTI ($64.85) tested a high of $65.83 yesterday. While it stays below $66, it can continue to trade within the $66–$62 range for some time.
Gold ($5089.60) needs a sustained break above $5100 to extend the rise towards $5300–$5500. Otherwise, it remains vulnerable to a decline towards $4800–$4700.
Silver ($83.10) has moved higher but faces moving average resistance near $90, which could cap the upside in the near term and trigger a fall towards $70–$65.
Copper ($5.9790) briefly rose above $6.00 and tested $6.08, but it needs a sustained move past $6.00 to advance towards $6.20–$6.40.
Natural Gas ($3.2230) has bounced slightly from its immediate support. While this support holds, a further rise towards $3.30–$3.50 can be seen.
DATA TODAY
GMT 6:00 IST 11:30 UK Trade Bal
...Expectations -22.0 ...Previous -23.7
GMT 6:00 IST 11:30 UK GDP
...Expectations 0.2 ...Previous 0.1
GMT 12:00 IST 17:30 IN CPI
...Kshitij 2.19 ...Previous 1.33
GMT 14:00 IST 19:30 US Existing Home Sales
...Kshitij 4327 ...Expectations 4220 ...Previous 4350
DATA YESTERDAY
================
GMT 13:30 IST 19:00 US NFP
...Expectations 70 ...Previous 48 ...Actual 130
GMT 13:30 IST 19:00 US Unemployment Rate
...Expectations 4.4 ...Previous 4.4 ...Actual 4.3
GMT 13:30 IST 19:00 US Avg Hrly Earnings
...Kshitij 0.36 ...Expectations 0.30 ...Previous 0.05 ...Actual 0.41
GMT 13:30 IST 19:00 US Average Hourly Earnings Production & Non Supervisory Employees
...Previous 0.13 ...Actual 0.38
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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