GOOD MORNING!
FOREX
The Dollar index looks stable while Euro has paused above 1.1450. USDJPY and EURJPY look bullish from current levels while EURINR needs to break below 109.90/75 to fall further towards 109, else can bounce back from here itself. Aussie looks bullish towards 0.72/73 while Pound could have scope for an initial decline for the next few sessions towards 1.33 or lower. USDCNY has broken 6.70 and if it manages to sustain lower, it can test 6.69 as well soon. USDINR came off sharply from 96.0925 yesterday on possible RBI intervention to sell dollars. If the dip sustains, we may see a fall towards 95.50. However, on the charts, there is still room for a test of 96.50 on the upside.
Dollar Index (100.239) looks stable above 100 today while EURUSD (1.1479) has paused near 1.1450 and bounced slightly. How far these levels would hold need to be seen in the coming days. We wait and watch for a few sessions before taking a directional stance for the medium term.
Dollar-Yen (156.22) and EURJPY (179.38) have risen and look bullish for the near term towards 157/158 and 180.50 respectively.
EURINR (109.9516) is likely to face support just below current levels which needs to break for it to move lower towards 109 else we may expect a bounce back from current levels soon. Watch price action near 109.90/70 region.
USDCNY (6.6991) has declined below 6.70, our lower target that we have been looking for a long time now. If the spot holds below 6.70, then it could turn further bearish for a fall to 6.69 now.
Aussie (0.7118) has risen back well and looks bullish towards 0.72/73. On the other hand, the Pound (1.3358) looks likely to test 1.33/32 before bouncing back to higher levels later.
USDINR (95.9350) came off from 96.0925 yesterday on possible intervention from the RBI. On the charts there is crucial resistance at 96.50 but if the RBI does not allow that rise and limits the upside to 96, we may expect a decline from current levels itself towards 95.50 in the next few sessions.
INTEREST RATES
The US Treasury Yields have come down. Failure to rise back immediately can trigger a corrective fall. Thereafter, the broader uptrend can resume. The German Yields have also come down. But there is limited room on the downside. They can test their support and then rise back again. Outlook remains bullish. The 10Yr GoI remains lower. A near-term dip looks more likely before the yield rises back again.
The US 10Yr (4.93%) and 30Yr (5.28%) yields have come down. Failure to rise back immediately can trigger a corrective fall to 4.85% (10Yr) and 5.2% (30Yr). Thereafter the broader uptrend can resume targeting 5.1%-5.2% (10Yr) and 5.5% (30Yr).
The German 10Yr (3.47%) and 30Yr (3.83%) Yields have come down further. A test of 3.43%-3.4% (10Yr) and 3.8% (30Yr) looks likely. Thereafter the yields can rise back and keep the bullish view intact to see 3.6% (10Yr) and 4%-4.1% (30Yr) on the upside.
The 10Yr GoI (7.0463%) remains lower. A test of 7% looks likely before the rise to 7.15% happens. After this rise, the yields can turn down again.
STOCKS
Dow remains vulnerable below 53000, with a break below 52000 opening the way towards 51000. DAX needs to break above 26000 for a rise towards 26250-26500. Nifty needs to sustain above 23500 to turn bullish, otherwise it remains vulnerable towards 23000. Nikkei remains weak below 65000 and can decline towards 63000-62000. Shanghai can remain range-bound between 3850-3950 while below 3950.
Dow (52211, -0.02%) remains vulnerable to a break below 52000 while below 53000. A break below 52000 could lead to a decline towards 51000.
DAX (25760, -0.63%) needs to break above 26000 to move higher towards 26250-26500. Otherwise, it can fall back towards 25500-25150.
Nifty (23,270.60, +0.23%) saw a high of 23363.55 before closing slightly lower. It needs to break above 23500 to turn bullish. Otherwise, while below this level, it remains at risk of falling towards 23000 in the coming weeks.
Nikkei (64350, -0.83%) remains vulnerable to a decline towards 63000-62000 while below 65000.
Shanghai (3895.85, +0.52%) can remain within the range of 3850-3950 for a few sessions while below the resistance near 3950.
COMMODITIES
Brent and WTI have fallen sharply as Middle East supply disruptions show signs of easing. Further declines towards $100-$98 and $95-$90 respectively remain possible. Gold has bounced back and can rise towards $4500-$4600 while above $4300. Silver can rise towards $68-$70 while above $63. Copper remains positive and can test $6.80-$6.85. Natural Gas is likely to remain range-bound between $2.80-$3.00.
Brent ($103.64) and WTI ($96.22) have fallen sharply and opened lower today. This comes amid signs that Middle East supply disruptions could ease, boosting global oil supplies. A further fall towards $100-$98 and $95-$90 respectively can be seen in the near term.
Gold ($4385.50) has bounced back in line with our expectations. It can rise towards $4500-$4600 while holding above $4300.
Silver ($66.09) has held above its immediate support and bounced back. A further rise towards $68-$70 can be seen while above $63.
Copper ($6.63) has soared 2.34% and tested a high of $6.67 yesterday. This was in line with our expectations. A further rise towards the upper resistance near $6.80-$6.85 can be seen.
Natural Gas ($2.85) can continue to trade within the mentioned $2.80-$3.00 range for some time.
DATA TODAY
23:30 05:00 JP CPI
...Expected 1.8 % ...Previous 1.8 % ...Actual 1.7 %
3:00 08:30 BOJ Meeting
...Expected 1.25 % ...Previous 1.00 %
13:15 18:45 US Industrial Production
...Kshitij Expn.-0.1 % ...Expected 0.1 % ...Previous 0.2 %
13:15 18:45 US Capacity Utilization
...Kshitij Expn.75.9 % ...Expected 76.4% ...Previous 76.3 %
DATA YESTERDAY:-
---------------
EU CPI (YoY)
...Expected 3.3 % ...Previous 2.9 % ...Kshitij Expn.3.2% ...Actual 3.3%
BOE Mtg
...Expected 3.75 % ...Previous 3.75 % ...Actual 3.75%
UK BOE Minutes
...Expected 3-0-6 ...Previous 3-0-6 ...Actual3-0-6
US Philifed Index
...Kshitij Expn -55.5 ...Expected 28.9 ...Previous 47.4 ...Actual 37.8
US Housing Starts
...Kshitij Expn 1333 K ...Expected 1320 K ...Previous 1239 K ...Actual 1275K
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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