GOOD MORNING!
FOREX
The Dollar index continues to rise and could move up to 101-101.50 while Euro can tank lower to 1.13 if it does not hold above support at 1.14. EURINR needs to hold above 108 else it can fall to 107.50-107. EURJPY may hold within 183-186 region for now. USDJPY is holding well above 161 and can rise towards 162 soon. USDCNY can test 6.78 before coming off towards 6.76/75 again. Aussie looks bearish to 0.69 while Pound has already plunged to levels below 1.3250 and needs to bounce back to avoid further decline. USDINR may move higher on Dollar strength and Euro weakness. There is crucial support at 94.15 and lower near 94.05 which may hold.
Dollar Index (100.825) rose sharply to test 101.13 before coming off a bit. It would be crucial to see if the index holds below 101.5-101 region and declines from here or manages to break higher.
EURUSD (1.1467) has crucial support at 1.14 which of holds can produce strength towards 1.15/1.16 or higher again. If the Dollar index manages to break above 101.5, Euro would tank below 1.14.
EURINR (108.0815) has crucial support at 107.77-107.50 region above which there can be scope for a rise to 108/109 region.
EURJPY (185.23) is holding above immediate support at 184 and could trade within the 184-186 region for the near term.
Dollar-Yen (161.54) continues to trade above 161 and has scope to test 162 before facing any rejection from there. At the same time there are chances of intervention from the BOJ which may not allow for a sharp rise above 162. Watch price action near 162 in the coming days.
USDCNY (6.7709) is headed towards 6.78 while the Dollar Index remains strong.
Aussie (0.7008) could test medium term support at 0.69 before bouncing back towards 0.70/71 again in the medium term.
Pound (1.3220) has risen back above 1.32 and it needs to sustain to move back towards 1.33/1.35 in the near to medium term. Else we may have to allow for a decline to 1.30.
USDINR (94.31) is likely to trade within the 94.05-95.00 region for the medium term. There is support in the 94.15-94.05 region which is likely to hold and produce a bounce to higher levels of 94.75/95.00.
INTEREST RATES
The US Treasury Yields have risen back from their support. A strong follow-through rise from here can take them further higher. The German yields have bounced back well ahead of their support. While this sustains, they can rise more. The 10Yr GoI remains lower and stable. It has room to fall more from here before reversing higher again.
The US 10Yr (4.48%) and 30Yr (4.92%) have bounced back from their respective support levels of 4.4% and 4.85%. The 10Yr can rise to 4.55%-4.6% on a break above 4.5%. The 30Yr can rise to 5%-5.5% while above 4.9%.
The German 10Yr (2.98%) and 30Yr (3.53%) have risen back well ahead of their 2.9%-2.85% (10Yr) and 3.45%-3.4% (30Yr) support. If this bounce sustains, a further rise to 3.1% (10Yr) and 3.65% (30Yr) is possible.
The 10Yr GoI (6.8533%) remains stable around 6.85%. The near-term outlook is weak to see a fall to 6.8% first before rising back again.
STOCKS
Global equities are showing mixed trends. Dow and DAX remain capped below key resistance zones and are vulnerable to a pullback towards 51000-50000 and 24500-24000 respectively. Nifty needs to sustain above 24000 to resume its upmove towards 24400, failing which it may slip towards 23800-23600. Nikkei remains the strongest among the major indices and could extend gains towards 73500-74000 if it breaks decisively above 73000. Shanghai remains weak in the near term, but while above 4000, the broader outlook stays positive for a rise towards 4150-4200..
Dow (51885.21, -0.24%) continues to weaken as the long-term resistance zone near 52700-53000 has held. While below this region, the downside remains open towards 51000-50000.
DAX (25144.33, -0.15%) is holding below the mentioned resistance zone of 25250-25500. While below this region, a pullback towards 24500-24000 remains likely.
Nifty (24,013.10, -0.64%) tested a low of 23901 before recovering and closing higher on Friday. It needs to sustain above 24000 to move higher towards 24400 and beyond. Otherwise, it may decline towards 23800-23600 in the coming week.
Nikkei (72900.42, +1.06%) has surged well beyond our expectations and tested a high of 73065 on Friday. A sustained break above 73000 would strengthen the bullish outlook and trigger a further rise towards 73500-74000.
Shanghai (4073.36, -0.43%) remains weak, but while above 4000, a rise towards 4150-4200 remains likely in the coming weeks.
COMMODITIES
Crude prices remain under pressure. Brent trades below $85 and WTI below $80, keeping the bearish outlook intact for a decline towards $75-$70 and $70-$65 respectively. Gold continues to look vulnerable to a fall towards $4100-$4000 before a meaningful reversal is seen. Silver can extend its decline towards $60. Copper is approaching key support near $6.25, which needs to hold to preserve the possibility of a recovery towards $6.50. Natural Gas remains range-bound and is likely to trade within the broader $3.00-$3.50 range for some time.
Brent ($79.20) remains below $85, and the downside remains open towards $75-$70 in the near term.
WTI ($75.63) continues to trade below $80. The bias remains bearish, and a further decline towards $70-$65 can be seen in the near term.
Gold ($4208.30) can decline further towards $4100-$4000 before a reversal is seen.
Silver ($66.21) looks likely to decline towards $60 in the near term.
Copper ($6.32) is falling and could test its immediate support near $6.25. If this level holds, it could keep alive the chances of a rise towards our earlier mentioned target of $6.50.
Natural Gas ($3.2960) can remain within the broad $3.00-$3.50 range for some time.
DATA TODAY
GMT 12:30 IST 18:00 CA Inflation Y/Y
...Previous 2.82
DATA LAST FRIDAY
================
GMT 23:05 IST 04:35 UK Cons Conf
...Market -23 ...Previous -23
GMT 23:30 IST 05:00 JP CPI
...Market 1.40 ...Previous 1.35
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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