GOOD MORNING!
FOREX
The Dollar index could test immediate resistance near 101.25 which if holds and pushes it down can hold supports on other major currencies like 1.13 on Euro, 158 on Yen, 95.50 onn USDINR, 0.69 on Aussie , 1.32 on Pound and instead lead to currency weakness in the coming sessions. EURJPY could rise to 180-182 in the near term before pausing for a reversal.
Dollar Index (101.122) has risen as expected and could test very near term resistance at 101.25. A break above this can take it higher towards 101.50-102 thereafter. Watch for a possible dip from 101.25.
EURUSD (1.1380) has broken below 1.14 and could be headed towards lower support at 1.13 in the next few sessions from where a bounce can be expected towards 1.14/1.15 again in the medium term.
Dollar-Yen (157.93) is trading higher. A sustained break above interim resistance at 158 is needed for a further rise towards 159/160 else we may expect an immediate decline from 158.
EURJPY (179.66) has crucial support at 178 above which the view is bullish for the near to medium term for an eventual rise to 180 or higher.
EURINR (109.0646) can bounce either from 109 itself that could limit further downside. Else a decisive break below 109, if seen can take it down to eat lower support near 108-107.5 before eventually rebounding for the longer run.
USDCNY (6.7168) has moved up. A decisive break above 6.72/7250 is needed to negate further downside and to start looking at higher targets.
Aussie (0.7021) could have scope to test 0.69 while below 0.7050. Thereafter, a rebound for the medium term is possible.
Pound (1.3227) has fallen as expected. Crucial support is seen at 1.32 above which we may expect a sharp rebound for the medium term back towards 1.34/35.
USDINR (95.7450) has bounced back exactly as expected. The spot could continue to move higher towards 95.80/96.00 soon along with the bounce in crude prices.
INTEREST RATES
The US Treasury and the German Yields have surged back sharply. Crude Oil price rising back above 100 has taken the yields higher. The Treasury yields have resumed their upmove without seeing the corrective dip. The rise is also happening much faster than expected. They can go up further higher. The German Yields have bounced from their support as expected. That keeps intact our overall bullish view. The yields can rise further. The 10Yr GoI has also risen back from its support. It can resume the overall uptrend and go further higher from here.
The US 10Yr (5.11%) and 30Yr (5.4%) yields have surged back. The rise to 5.2% (10Yr) and 5.5% (30Yr) is happening much faster and also without seeing a corrective dip.
The German 10Yr (3.55%) and 30Yr (3.84%) Yields have risen back sharply. The support at 3.43%-3.4% (10Yr) and 3.8% (30Yr) has held very well. That keeps intact our bullish view. The yields can rise to 3.6%-3.7% (10Yr) and 4%-4.1% (30Yr).
The 10Yr GoI (7.0447%) has risen back from the low of 6.9997%. While above 7%, the bullish view is intact to see 7.15%. Only a sustained break below 7% will negate this rise.
STOCKS
Dow has fallen below 52000 and can decline towards 51500-51000. DAX remains weak below 25500, with a break opening 25250-25000. Nifty needs to break above 23500 for a rise towards 23800. Nikkei can decline towards 65000-64000 after pulling back from resistance. Shanghai remains weak below 3950 and can decline towards 3850.
Dow (51825, -0.09%) has fallen below 52000, as mentioned earlier. A further decline towards 51500-51000 can be seen in the coming sessions.
DAX (25499, -0.43%) has fallen back, as cautioned earlier. It needs a sustained break below 25500 for a further decline towards 25250-25000. Otherwise, it can bounce back towards 26000.
Nifty (23,446.80, +0.50%) moved higher and tested a high of 23466 before closing. It needs to break above 23500 to rise towards 23800 in the coming weeks.
Nikkei (65900, -0.14%) has pulled back from resistance, as mentioned earlier. It could decline further towards 65000-64000.
Shanghai (3912.90, -0.62%) has failed to break above 3950 and retreated sharply. A further decline towards 3850 can be seen, keeping the earlier mentioned 3850-3950 range intact for some time.
COMMODITIES
Brent and WTI have moved sharply higher as US-Iran tensions continue to disrupt crude flows. Gold needs to hold $4300 for a recovery towards $4500-$4600. Silver can test $63 before a possible bounce. Copper remains weak below $6.80 and can decline towards $6.70-$6.60. Natural Gas has broken above $3.00 and can rise towards $3.20-$3.40.
Brent ($102.20) and WTI ($91.51) have erased overnight losses and moved sharply higher. This comes as an end to US-Iran hostilities remains elusive, affecting crude flows through the Strait of Hormuz. While support levels hold, a further rise towards $104-$106 and $94-$96 respectively can be seen.
Gold ($4325.60) has fallen to $4300 as cautioned. This level needs to hold to avoid further weakness and produce a bounce towards $4500-$4600.
Silver ($64.68) has fallen back, contrary to our expectations, and can test $63 in the near term. A bounce back can be seen from there.
Copper ($6.77) has plunged below $6.80, as seen earlier and cautioned yesterday. A further fall towards $6.70-$6.60 can be seen in the near term.
Natural Gas ($3.1820) has broken above $3.00 and opened higher near $3.16 today. This is in line with our expectations. A further rise towards $3.20-$3.40 can be seen in the near term.
DATA TODAY
1:30 07:00 Australia Labour Force
...Expected 21.5 K ...Previous -15.8 K ...Actual 39.5K
8:00 13:30 GER IFO Business Climate
...Expected 89.0 ...Previous 88.8
8:00 13:30 GER IFO Business Situations
...Expected 89.0 ...Previous 88.5
8:00 13:30 GER IFO Business Expectations
...Expected 89.3 ...Previous 89.1
8:30 14:00 SNB Mtg
...Expected 0.00 % ...Previous 0.00 %
12:30 18:00 US Current Account Balance
...Kshitij Expn -206 $bln ...Expected -259 $bln ...Previous -227 $bln
14:00 19:30 US New Home Sales
...Kshitij Expn. 617 K ...Expected 619 K ...Previous 607 K
DATA YESTERDAY:-
---------------
IN Flash Manufacturing PMI
...Previous 52.8 ...Actual 55.7
IN Flash Services PMI
...Previous 54.1 ...Actual 55.8
EU Flash PMI
...Expected 52.6 ...Previous 52.7 ...Actual 52.7
UK Flash PMI
...Expected 51.5 ...Previous 51.7 ...Actual 52.0
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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