GOOD MORNING!
FOREX
The Dollar Index need to rise past 100 to head towards 101. Else, a break below 99 can negate the anticipated rise and extend the fall towards 98. The Euro & EURINR face immediate resistance at 1.16 & 102.60. The targets of 1.14 & 101.50-101.00 are kept alive while the respective resistances hold. EURJPY and USDJPY are rising as anticipated and can head towards 180 & 155 in the coming sessions. USDCNY continues to trade within 7.15-7.10 region. The Aussie can hold the 0.645-0.660 range in the near term. Pound has been coming off and a breach below 1.3140 can open the doors for 1.30 as well in the coming sessions. Yesterday, USDINR declined to an low of 88.41 on offshore but has since recovered. A confirmed break below 88.50 will be necessary to push the pair lower toward the 88.30-88.25 region in the near term.
Dollar Index (99.69) initially dropped to a low of 99.28 before recovering. However, a rise above 100 is needed to open the path toward 101. Otherwise, a break below 99 would suggest that the index has already peaked at 100.36 and could decline further toward 98.
EURUSD (1.1577) and EURINR (102.5615) faces immediate resistance at 1.16 & 102.60 region. While the resistance holds, the targets of 1.140-1.135 & 101.50-101.00 respectively are kept open for now. Only if the resistance gets breached, might lead us to revise our view accordingly.
EURJPY (177.77) & Dollar-Yen (154.37) are gradually rising as anticipated and the targets of 180 & 155 soon in the near term. Thereafter, Whether the rise will extend further or a pullback occurs will have to be seen.
USDCNY (7.1191) continues to trade lower within its 7.15-7.10 range which is likely to persist for some time.
Aussie (0.6530) has moved up further within its 0.645-0.660 range which can hold in the near term.
Pound (1.3162) started coming off from 1.3184 itself and a break below 1.3140 if seen can drag the pair to 1.30 as well in the coming sessions.
USDINR (88.5470) slipped near the lower end of its 88.85-88.50 range. On the offshore the pair observed a low of 88.41 amid optimistic comments on US-India tariff talks. Currently it is trading near 88.55 region and a confirmed break below 88.50 can push the pair toward 88.30-88.25 in the near term.
INTEREST RATES
The US Treasury yields have come down sharply in the early Asian session today. The range is intact and can continue for some more time. The bias is positive to get a bullish breakout of this range eventually. The German yields have come down as expected after testing their resistance. That keeps intact our bearish view of seeing a fall back. The 10Yr GoI has bounced back. The support is holding well. A further rise from here will reduce the danger of the fall that was cautioned yesterday.
The US 10Yr (4.08%) and 30Yr (4.68%) Treasury yields have come down sharply within its 4.05%-4.15% (10Yr) and 4.6%-4.75% (30Yr) range. We expect the range to remain intact. The yields can make a bullish breakout eventually and rise to 4.2% (10Yr) and 4.8% (30Yr).
The German 10Yr (2.66%) and 30Yr (3.25%) yields have come down sharply after testing the resistance at 2.7% (10Yr) and 3.3% (30Yr). That keeps intact our bearish view of seeing a fall back to 2.5% (10Yr) and 3.1% (30Yr).
The 10Yr GoI (6.5078%) has bounced back. The support at 6.48% is holding well. A rise above 6.53% can take it up to 6.55% again and will negate the danger of the fall to 6.45% that was cautioned yesterday.
STOCKS
The Dow and Dax have risen. The Dow may soon test 48000 and a break past would open up chances of 49000. The DAX has risen above 24000 and needs to sustain to target 25000. Nifty needs to cross the 25700/800 region to rise further. Else the index can be stuck within 25800-25400 region. Nikkei may face slight dip to 49000 if it fails to rise back above 52000 immediately. Shanghai can trade within 4050-3950 for the near term.
The Dow (47927.96, +1.18%) has rallied well to almost reach our mentioned target of 48000. It would be crucial to see if the index breaks past 48000 and heads higher to 49000.
DAX (24088.06, +0.53%) has moved up above 24000. A slow rise towards 24500-25000 can be seen in the coming days. Failure to hold above 24000 can drag it back to 23500-23000.
Nifty (25694.95, +0.47%) may face slight resistance near 25700-25800 region which can lead to a dip to 25400 before again attempting to bounce back towards 25800+. A straight rise past this hurdle can affirm a faster rise towards 26000-26200. Overall view is bullish above 25400.
Nikkei (50918.18, +0.15%) saw a decent dip yesterday. While below 52000, there is a fair chance of a decline to 49000 before moving up towards 52000-54000 region eventually.
Shanghai (4013.34, +0.26%) could face rejection from 4050 and trade within the 4050-3950 region for the near term. A break past 4050 if seen, can take the index to 4100.
COMMODITIES
Crude prices have risen contrary to expectations, with Brent likely to test $66 and WTI heading towards $62 before any pullback. Gold is holding firm above $4100 and can rise towards $4150-4200, while Silver continues to strengthen towards $51.50-52.00. Copper remains within its broad $5.20-4.90 range. Natural gas is inching higher towards $4.60, and a sustained break above this level could extend its bullish move towards $4.70-4.80.
Brent ($65.07) has risen contrary to our expectation amid hopes that the US government will reopen later this week, which could support economic growth and energy demand. A further rise towards $66 can be seen in the coming sessions, and if this level holds, our earlier mentioned fall towards $62 may follow. However, a break above $66 could trigger a fresh rally.
WTI ($60.92) is moving up against our expectation and can test $62 in the near term. If this level holds, a decline towards our earlier mentioned levels near $58 could be seen thereafter.
Gold ($4137.40) is hovering above $4100 and can move further up towards $4150-4200 in the near term.
Silver ($51.19) is moving up in line with our expectation and can head further towards $51.50-52.00 in the near term.
Copper ($5.0815) can rise towards $5.10-5.20 in the near term, keeping the broader $5.20-4.90 range intact for the coming weeks.
Natural Gas ($4.5460) is moving up as expected and can soon test $4.60. A sustained break above this level is needed to maintain bullish momentum towards $4.70-4.80.
DATA TODAY
GMT 0:30 IST 06:00 Australia Labour Force
...Expectation 20.3 ...Previous 14.9
GMT 7:00 IST 12:30 UK Trade Bal
...Expectation -20.8 ...Previous -21.2
GMT 10:00 IST 15:30 EU Ind Prodn
...Kshitij -1.3 ...Expectation 0.8 ...Previous -1.2
GMT 13:30 IST 19:00 US CPI
...Expectation 0.2 ...Previous 0.3
GMT 13:30 IST 19:00 US Core CPI
...Expectation 0.3 ...Previous 0.2
DATA YESTERDAY
================
GMT 12:00 IST 17:30 IN CPI
...Kshitij 1.67 ...Expectation 0.48 ...Previous 1.44 ...Actual 0.25
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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