GOOD MORNING!
FOREX
The Dollar Index may continue trade within 99-101 region while Euro is holding below 1.1650 and may trade within 1.1650-1.15 for now. EURINR can trade within 108-110 for now. EURJPY needs to hold below 185 to fall back, or else can trigger further bullishness towards 187. The USDJPY has reached resistance at 160. Repeated attempts to test 160 can eventually give way for a sharp rise. We remain cautious near 160. USDCNY has risen as expected and a break above 6.92 can take it to 6.95. Aussie, if breaks below 0.69 can fall to 0.68/67 while Pound can test 1.3250 before a bounce is seen from there. The USDINR is likely to open with a gap up today above 94 but we may expect the central bank to intervene.
Dollar Index (99.853) is stable above 99 and is likely to continue trade within 99-101 region for the near term unless a decisive breakout on either side is seen. EURUSD (1.1538) has held below 1.1650 and seen a decent dip. We may expect the immediate trade range of 1.15-1.1650 to hold for the near term.
EURINR (108.6943) has dipped along with the fall in the Euro. But while above 108, we may expect trade between 108-110 for the near term. A break below 108 is needed for the pair to decline to 106/105 again in the medium term.
EURJPY (184.11) is slowly inching up to the upper end of the 185-182 range and failure to break above 185 could bring it back towards 183-182. Only a break past 185, if seen and sustained, can be further bullish towards 186 or higher.
Dollar-Yen (159.58) has again moved up to test 160.Continuous attempts to test 160 could be indicative of an eventual upside breakout. Such a possibility can only be negated on a decisive fall below 158. Till then we keep intact chances of a rise above 160 in the medium term.
USDCNY (6.9147) has risen as expected. A break above 6.92 will further make it bullish towards 6.94/95.
Aussie (0.6890) has broken below the immediate support at 0.69 as 0.72 is holding as a crucial resistance. If the fall sustains, the currency can fall towards 0.68-0.67 soon.
Pound (1.3341) has scope to fall to 1.3250 before moving up from there towards 1.3450-1.35 in the coming 1-2 weeks.
USDINR (93.9825) had closed just below 94 on Wednesday. Yesterday the markets were closed for Ramnavmi. Today on the NDF the USDINR quotes 94.18 but we may expect an intervention from the central bank of on a sharp rise above 94 on the OTC markets which can bring the spot down to 93.75/60. However, it is uncertain of further near term movement as it is dominated by the global geopolitical news.
INTEREST RATES
The US Treasury Yields are rising back. A break above the immediate resistance can clear the way for the targets that we have been looking for. The German Yields have risen back sharply as expected after the intermediate dip. That keeps intact our broader bullish view. The yields can rise more from here. The 10Yr GoI is going up as expected and can test the immediate resistance. A corrective fall is possible thereafter before the broader upmove resumes.
The US 10Yr (4.41%) and 30Yr (4.94%) Treasury yields are rising back. A break above 4.45% (10Yr) and 4.95% (30Yr) can take them higher to 4.6% (10Yr) and 5.05%-5.1% (30Yr).
The German 10Yr (3.07%) and 30Yr (3.51%) yields have risen back sharply after the intermediate dip as expected. That keeps intact our bullish view of seeing 3.2% (10Yr) and 3.65% (30Yr) on the upside.
The 10Yr GoI (6.8750%) can test 6.9%. A corrective dip to 6.8%-6.75% is possible thereafter before resuming the upmove towards 6.95%-7% eventually.
STOCKS
Global equities remain under pressure with limited upside as key resistances hold. Dow continues to trade below 47000 and may decline towards 45500-45000. DAX has fallen sharply and remains vulnerable to a further fall towards 22000. Nifty is facing resistance near 23400 and needs a break above it to rise towards 23800-24000. Nikkei has turned lower after failing near 54000 and may decline towards 50000. Shanghai can see a short term rise towards 4000-4100 while holding above 3800.
Dow (46364, +0.28%) has fallen in line with our expectations and as long as it holds below 47000, the chances of a decline towards 45500-45000 remain intact.
DAX (22871, +0.44%) has fallen sharply to a low of 22699 yesterday and remains vulnerable to a decline towards 22000 in the near term.
Nifty (23,306.45, +1.72%) is facing immediate moving average resistance near 23400, which needs to be broken to see a further rise towards 23800-24000.
Nikkei (52950, +1.50%) has reversed sharply to a low of 52115 after failing to break above 54000. A fall towards 50000 can be seen in the coming weeks.
Shanghai (3,896.90, +0.19%) can rise towards 4000-4100 in the near term while it holds above 3800.
COMMODITIES
Crude prices are rising on fresh Middle East tensions. Brent can move towards $110-$115 while WTI may rise towards $95-$100 in the near term. Gold has corrected from recent highs but the downside looks limited to $4100-$4000, keeping the broader view intact for a rise towards $4800-$5000. Silver may find support near $65-$60 and bounce towards $75-$85. Copper remains weak below $5.60 and can decline towards $5.25 and $5.00. Natural Gas may continue to trade within the $3.30-$2.80 range for now.
Brent ($106.02) has moved above $100 amid fresh conflicts in the Middle East. A further rise towards $110-$115 looks likely in the near term.
WTI ($93.10) has bounced back above $90 over the last couple of sessions and can move higher towards $95-$100.
Gold ($4422.40) has turned down from the high of $4600, but the downside looks limited to $4100-$4000. While above this level, a rise towards $4800-$5000 can be seen over the coming weeks.
Silver ($68.73) has fallen back contrary to our expectations, but support is seen near $65-$60 which can limit the downside and produce a bounce back towards $75-$85 over the coming weeks.
Copper ($5.5140) is failing to break below $5.60 and can fall towards $5.25 in the near term and $5.00 or lower thereafter.
Natural Gas ($2.9280) is trading above its immediate support and can range between $3.30-$2.80 for some time.
DATA TODAY
GMT 0:01 IST 05:31 UK Cons Conf
...Expectations -24.0 ...Previous -19.0
DATA YESTERDAY
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NO MAJOR DATA HAS RELEASED YESTERDAY.
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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