GOOD MORNING!
FOREX
The Dollar Index may trade within 101-99 region with the Euro stuck within 1.1650-1.14. EURINR may dip towards support near 106 before bouncing higher while EURJPY can trade below resistance zone of 186-185. USDJPY has held below 160.50 and may have scope to test 157/156 on the downside. However, we remain cautious for a possible upside breakout in the medium term. USDCNY may trade within 6.85-6.92 region for a few sessions. Aussie and Pound can trade within the 0.67-0.70 and 1.30-1.32 region respectively. The USDINR is likely to se some fall today also below 93 from last week's close of 93.17.
Dollar Index (100.254) has risen above 100 again. We continue to keep a near term trade range of 101-99 intact for the near term.
EURUSD (1.1507) has dipped compared to the last few sessions. Our earlier view of seeing trade within 1.15-1.1650 region may hold well. Our mentioned rise to 1.17-1.1750 (last week's edition) can be negated while Euro sustains trade below 1.1650.
EURINR (106.6776) has scope to test support near 106 before bouncing back towards 108 again in the medium term. Any further dip in the USDINR today, if seen can drag EURINR lower.
EURJPY (183.74) is trading below crucial resistance zone of 186-185 and may decline in the coning weeks if this resistance holds.
Dollar-Yen (159.69) is also holding below 160-160.50 just now and could trade within the narrow 157-160.5 range for the near term unless a breakout is sseen on either side. We remain cautious nmas any upside breakout seen in the Dollar Index could trigger an upside break in the USDJPY also.
USDCNY (6.8819) is likely to trade within 6.85-6.92 region for some more sessions.
Aussie (0.6898) has interim resistance at 0.70 below which there is scope for a dip to 0.68/67 before rising again towards 0.71/72.
Pound (1.3194) needs to rise above 1.32 and hold higher else could be vulnerable to decline towards 1.31/30 soon.
USDINR (93.1687) moved higher to close above 93 after testing a low of 92.82. It would be crucial to see if the spot now sustains and moves above 93 or dips below 93 again to trade lower for sometime. On the NDF, the currency quotes at 92.67. we need to see Rupee can appreciate further today.
INTEREST RATES
The US Treasury Yields have risen back from their support. That keeps intact our broader bullish view. While the supports hold, the yields have room to rise more from here. The German Yields can see some more corrective dip from here. Thereafter they can resume their broader upmove. The 10Yr GoI has surged further and is witnessing an extended rise. It can move further higher.
The US 10Yr (4.36%) and 30Yr (4.92%) Treasury yields have risen back from their support. While above .25%-4.2% (10Yr) and 4.8%-4.75% (30Yr) the broader bias will remain bullish to see a rise to 4.5%-4.6% (10Yr) and 5.05%-5.1% (30Yr).
The German 10Yr (2.99%) and 30Yr (3.47%) yields remain lower but stable. They can fall to 2.9%-2.85% (10Yr) and 3.4%-3.35% (30Yr) first and then resume their uptrend targeting 3.2% (10Yr) and 3.65% (30Yr) on the upside in the medium term.
The 10Yr GoI (7.1329%) is witnessing the extended rise to 7.2%. Any dip can find support in the 7%-6.9% region.
STOCKS
Global equities are at key levels with mixed momentum and require breakouts for direction. Dow needs a break above 47000 to rise towards 47500-48000, else it may fall towards 46000-45000. DAX must break above 23500-23600 to move higher towards 24000-24500, otherwise downside towards 22500-22000 remains. Nifty has rebounded but needs a break above 22950-23000 to negate bearishness towards 22000. Nikkei looks positive above 52000 and can rise towards 55000-55500 on a break above 54000. Shanghai remains weak below 3900 with downside towards 3850-3800.
Dow (46664, -0.15%) is holding below 47000 and needs a sustained break above this level to rise towards 47500-48000. Otherwise, it remains vulnerable to a decline towards 46000-45000.
DAX (23395, -0.27%) tested a low of 22800 but closed higher above 23000 on Friday. A sustained break above 23500-23600 is needed to move higher towards 24000-24500. Otherwise, it can decline towards 22500-22000.
Nifty (22713.10, 0.15%) has rebounded strongly after testing a low at 22182 on 2nd April. It needs to break above 22950-23000 to negate bearishness towards 22000 in the near term.
Nikkei (53820, +0.81%) while above 52000, has the potential to break above 54000 and rise towards 55000-55500.
Shanghai (3,880.09, -1.00%) has failed to break past 3950 and has fallen below 3900, making it vulnerable to a further decline towards 3850-3800.
COMMODITIES
Crude prices remain strongly bullish on escalating Middle East tensions and supply risks. Brent can rise towards $115-$120 with further upside to $130-$150 on a break above $120, while WTI may move higher towards $115-$120. Gold remains weak below $4800 and can decline towards $4500-$4400. Silver may fall further towards $70-$68 below $75. Copper needs to hold above $5.50 to move higher towards $5.80-$6.00, otherwise it may drop towards $5.40-$5.20. Natural Gas may remain range bound between $3.30-$2.80 if support near $2.80 holds.
Brent ($110.34) has risen sharply after Trump threatened to attack Iranian power plants unless the Strait of Hormuz reopens. The view remains intact for a rise towards $115-$120 in the near term. Thereafter, if tensions in the Middle East persist and a break above $120 is seen, it could turn further bullish towards $130-$150 over the coming months.
WTI ($111.54) has risen above $110 due to continued tensions in the Middle East. A further rise towards $115-$120 can be seen in the coming sessions.
Gold ($4674.90) is failing to break past $4800 and while below this level, a further decline towards $4500-$4400 can be seen in the near term.
Silver ($72.63) is falling in line with our expectations and while below $75, a further decline towards $70-$68 remains likely.
Copper ($5.6350) is holding above $5.50 for now and needs to sustain above this level to see a further rise towards $5.80-$6.00 in the coming sessions. Otherwise, a break below this can drag it down towards $5.40-$5.20.
Natural Gas ($2.8450) is falling but while it holds above the support near $2.80, the earlier mentioned range of $2.80-$3.30 can persist for some time.
DATA TODAY
GMT 5:00 IST 10:30 IN Services PMI
...Previous 58.1
DATA LAST FRIDAY
================
GMT 12:30 IST 18:00 US NFP
...Kshitij -1 ...Expectations 56 ...Previous -92 ...Actual
GMT 12:30 IST 18:00 US Unemployment Rate
...Expectations 4.4 ...Previous 4.4 ...Actual
GMT 12:30 IST 18:00 US Avg Hrly Earnings
...Kshitij 0.2 ...Expectations 0.3 ...Previous 0.4 ...Actual
GMT 13:30 IST 19:00 US Average Hourly Earnings Production & Non Supervisory Employees
...Previous 0.3 ...Actual
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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