GOOD MORNING!
FOREX
Statement from the President stating that the war is almost near over has led to decline in the dollar index as other major currencies trade strong. The Dollar Index has scope to test 98 and fall further to 97/96 on a break below 98 while Euro may head towards 1.18/1.1950 in the coming weeks. USDJPY can test 158 but thereafter a decisive break on the downside is needed for further decline towards 156. EURJPY is headed towards 188 while EURINR may test 110-112. Pound has risen above 1.35 and can rise to 1.36 or higher soon while Aussie can test 0.70/72 in the near term. USDCNY may head towards 6.80. A break below that if seen however can lead it towards 6.78/75 region. USDINR has scope to test 93-92.80 today. A broad range 92.50-93.50 can hold for the next few weeks.
Dollar Index (98.127) has dipped as expected and if likely to fall further towards 98. A break below 98 would trigger a fal l towards 97/96.
EURUSD (1.17921
) has risen above 1.1750 as expected and may head higher towards 1.1850-1.1950 in the near term.
EURINR (109.8309) has risen sharply breaking above 109.20 and is now headed towards our upper target zone of 110-112 in the coming days.
EURJPY (187.36) has risen well and may soon test 188. Thereafter, it would be crucial to see if the price faces rejection from 188 and falls towards 186/184 or breaks higher to target 190.
Dollar-Yen (158.93) continues to trade within the 158-160.5 range. A break on either side will be needed for confirmation of further direction and target. A break below 158 can trigger a fall to 156.
USDCNY (6.8166) has fallen back again and failure to move back above 6.85 could trigger a fall below 6.80 which can take the currency towards 6.78/75.
Aussie (0.7128) is headed towards 0.72, the upper end of the 0.68-0.72 region mentioned in our earlier edition. A break above 0.72 is needed for the price to rise further towards 0.73/74 else we may expect a dip back towards 0.70/68.
Pound (1.3568) trades higher after breaking above 1.35. While the price sustains above 1.35, there is scope for a slow rise to 1.39 in the medium term.
USDINR (93.38) may dip today towards 93-92.80 region on weak Dollar. As mentioned in our earlier edition, a broad range of 93.50-92.50 may hold for the next few weeks with some chances of testing 92 on the downside.
INTEREST RATES
The US Treasury Yields have come down sharply over the last couple of days. A fall in the oil price is weighing on the yields. They can fall more from here in the coming days. Our expected rise may get delayed. The German Yields are holding higher. The bullish view is intact, and the yields can rise more from here. The 10Yr GOI is stuck inside a range now. We will have to wait for the range breakout to get clarity. The bias is negative first to see a fall breaking the range and then reverse higher.
The US 10Yr (4.24%) and 30Yr (4.86%) Treasury yields have come down sharply in the last couple of days. The 10Yr may break 4.2% and extend the fall to 4.17%-4.15%. The 30Yr can test 4.8% and need to see what happens after that. The expected rise is getting delayed.
The German 10Yr (3.02%) and 30Yr (3.58%) yields are holding higher. The bias remains positive to see 3.2% (10Yr) and 3.65% (30Yr) on the upside.
The 10Yr GoI (6.9395%) is stuck between 6.9% and 7%. While below 7%, a fall to 6.85%-6.8% can happen first and then an upward reversal can be seen.
STOCKS
Global equities remain firm as easing geopolitical tensions continue to support risk sentiment. Dow can rise towards 49000-50000, while DAX may extend gains towards 25000 in the coming sessions. Nifty has rebounded from support and can move towards 24000 while above 23500. Nikkei has outperformed expectations and now looks set for a rise towards 60000. Shanghai remains positive and can inch higher towards 4050 in the near term.
Dow (48741, -0.03%) has bounced back in line with our expectations after renewed peace talks between the US and Iran. A rise towards 49000-50000 can be seen in the near term.
DAX (24204, -0.06%) has bounced back as expected and can rise towards 25000 in the coming sessions.
Nifty (23,842.65, -0.86%) has rebounded after testing a low of 23555 on Monday. While it sustains above 23500, the up move may extend towards 24000 in the near term.
Nikkei (58345, -0.86%) has exceeded our expectations and risen to a high of 58890. It now looks likely to move higher towards 60000 in the coming sessions.
Shanghai (4039.77, +0.33%) has risen in line with our expectations and can move higher towards 4050 in the coming sessions.
COMMODITIES
Commodity markets remain volatile amid shifting geopolitical developments. Brent and WTI have fallen sharply on renewed US-Iran peace talks but, while holding above $85, the broader bias remains for a rise towards $110-$115. Precious metals continue to strengthen with Gold likely to move towards $4900-$5000 and Silver towards $82-$85. Copper remains firmly bullish and can rise towards $6.15-$6.25. Natural Gas continues to weaken and may decline further towards $2.55-$2.50 in the coming sessions.
Brent ($95.13) has fallen sharply below $100 after renewed US-Iran peace talks. The market remains highly volatile and lacks directional clarity. While above $85, the earlier mentioned rise towards $110-$115 remains likely.
WTI ($90.73) has fallen sharply to test a low of $86.96, contrary to our expectations. The price remains highly volatile due to ongoing tensions in the Middle East. While above $85, the direction remains slightly tilted towards a rise towards $110-$115.
Gold ($4851.20) has bounced back in line with our expectations and can rise towards $4900-$5000 in the near term.
Silver ($80.33) has bounced back in line with our expectations and can rise further towards $82-$85 in the near term.
Copper ($6.10) continues to move up in line with our expectations and can rise towards $6.15-$6.25 in the near term.
Natural Gas ($2.5950) has fallen in line with our expectations and can decline towards $2.55-$2.50 in the coming sessions.
DATA TODAY
GMT 6:30 IST 12:00 IN WPI
...Market 3.10 ...Previous2.13 ...Actual
GMT 9:00 IST 14:30 EU Ind Prodn (MoM)
...Market 0.10 ...Previous -1.52 ...Actual
GMT 9:30 IST 15:00 IN Trade bal
...Market -32.75 ...Previous -27.10 ...Actual
GMT 20:00 IST 01:30 US TICS
...Kshitij 106.32 ...Market 58.60 ...Previous 15.51 ...Actual
DATA YESTERDAY
===============
GMT 12:30 IST 18:00 US PPI
...Kshitij 0.08 ...Market 1.20 ...Previous 0.68
GMT 12:30 IST 18:00 US Core PPI
...Kshitij 0.1 ...Market 0.5 ...Previous 0.5
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 !!
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