GOOD MORNING!
FOREX
The Dollar Index has scope to test 98 and fall further to 97/96 on a break below 98 while Euro may head towards 1.1850/1.1950 in the coming days. USDJPY can test 158 but thereafter a decisive break on the downside is needed for further decline towards 156. EURJPY is headed towards 188 while EURINR may test 111-112. Pound has risen above 1.35 and can rise to 1.36 or higher soon while Aussie can test 0.72 in the near term. USDCNY may head towards 6.80. A break below that if seen however can lead it towards 6.78/75 region. USDINR may trade within 93-93.50 for the next few days.
Dollar Index (98.019) has moved closer to our expected 98 level. A break below this level would open up further decline towards 97/96 for the medium term.
EURUSD (1.1803) has risen above 1.18 as expected. It may now head higher towards 1.1850-1.1950 in the near term.
EURINR (110.1632) is headed towards 111-112 in the near term. Overall view is bullish while above 110.
EURJPY (187.35) has risen well and may soon test 188. Thereafter, it would be crucial to see if the price faces rejection from 188 and falls towards 186/184 or breaks higher to target 190.
Dollar-Yen (158.76) trades near the upper end of th 158-160.5 range. A break on either side will be needed for confirmation of further direction and target. However, a break below 158 can trigger a fall to 156.
USDCNY (6.8177) trades below 6.82. Failure to move back above 6.85 in the next few sessions could trigger a fall below 6.80 which can take the currency towards 6.78/75.
Aussie (0.7175) is headed towards 0.72. A break above 0.72 is needed for the price to rise further towards 0.73/74 else we may expect a dip back towards 0.70/68. Watch price action near 0.72.
Pound (1.3572) trades higher today after breaking above 1.3550. While the price sustains above 1.35, there is scope for a slow rise to 1.39 in the medium term.
USDINR (93.3775) is likely to remain above 93 and trade within the 93-93.50 region for the next few sessions.
INTEREST RATES
The US Treasury Yields have bounced back again. But they have to rise above their immediate resistance to negate the fall to test their support and rise straightaway. We will have to wait and watch. The German Yields have inched up. The bullish view is intact. The yields can rise more. The 10Yr GoI has declined, breaking the range on the downside. It can fall more in the coming days and then reverse higher from its support.
The US 10Yr (4.27%) and 30Yr (4.89%) Treasury yields have bounced back again. But they have to rise above 4.35% (10Yr) and 4.95% (30Yr) to go up to 4.5%-4.6% (10Yr) and 5.05%-5.1% (30Yr) straightaway. Else, the chances of the dip to 4.2%-4.15% (10Yr) and 4.8% (30Yr) will still remain alive.
The German 10Yr (3.04%) and 30Yr (3.60%) yields have inched up. The bullish view remains intact to see 3.2% (10Yr) and 3.65% (30Yr) on the upside.
The 10Yr GoI (6.8662%) fell sharply yesterday. The fall to 6.85%-6.8% is happening first as expected. We can expect the yields to rise back again from around 6.8%.
STOCKS
Global equities remain broadly positive with upside potential intact across major indices. The Dow continues to hold steady and may rise towards 49000-50000, while DAX can advance towards 25000. Nifty has strengthened sharply and may move higher towards 24400-24600 if it sustains above 24000. Nikkei remains firm above 59000 and can test 60000 soon, with a sustained break opening room for a further rise towards 61000-62000. Shanghai also remains constructive but requires a sustained break above 4050 to extend gains towards 4100-4150.
Dow (48741, +0.15%) has remained flat, but the outlook for a rise towards 49000-50000 in the near term remains intact.
DAX (24297, +0.16%) can rise towards 25000 in the coming sessions.
Nifty (24,231.30, +1.63%) has risen strongly today. It must remain above 24000 to rise further towards 24400-24600 in the near term.
Nikkei (59650, +1.81%) has risen above 59000 in line with our expectation and can soon test 60000 in the coming sessions. Thereafter, a sustained break above this level can take the index further up towards 61000-62000.
Shanghai (4047.77, +0.50%) has tested a high of 4050 yesterday in line with our expectation. A sustained break above this level is needed for it to move higher towards 4100-4150.
COMMODITIES
Commodity prices remain broadly mixed. Brent and WTI have gained amid renewed Middle East tensions and retain upside potential towards $110-$115. Precious metals continue to strengthen, with Gold targeting $4900-$5000 and Silver expected to rise towards $82-$85. Copper also remains positive with scope for a move towards $6.15-$6.25. Natural Gas is the only weak spot and may decline further towards $2.55-$2.50 in the near term.
Brent ($95.17) has risen amid fresh tensions in the Middle East as the US Navy threatens to blockade the Strait of Hormuz. The bias remains slightly bullish, and a rise towards $110-$115 remains likely.
WTI ($91.57) has risen slightly, but with renewed tensions in the Middle East, the direction remains unclear. However, the bias remains slightly tilted towards a rise to $110-$115.
Gold ($4841.20) is moving higher and can rise towards $4900-$5000 in the near term.
Silver ($80.27) can rise towards $82-$85 in the near term.
Copper ($6.11) can rise towards $6.15-$6.25 in the coming sessions.
Natural Gas ($2.5950) remains likely to decline towards $2.55-$2.50 in the coming sessions.
DATA TODAY
GMT 2:00 IST 07:30 CN GDP
...Market 5.0 ...Previous 4.5
GMT 5:30 IST 11:00 CN Retail Sales
...Market 2.40 ...Previous 2.80
GMT 5:30 IST 11:00 CN IIP (YoY)
...Market 5.90 ...Previous 6.30
GMT 6:00 IST 11:30 UK Trade Bal
...Market -20.30 ...Previous -14.45
GMT 9:00 IST 14:30 EU CPI (YoY)
...Kshitij 2.18 ...Market 2.50 ...Previous 2.52
GMT 12:30 IST 18:00 US Philifed Index
...Kshitij 7.18 ...Market 10.50 ...Previous 18.10
GMT 13:15 IST 18:45 US Industrial Production
...Kshitij -0.11 ...Market 0.10 ...Previous 0.20
GMT 13:15 IST 18:45 US Capacity Utilization
...Kshitij 76.53 ...Market 76.40 ...Previous 76.30
DATA YESTERDAY
===============
GMT 6:30 IST 12:00 IN WPI
...Market 3.10 ...Previous 2.13 ...Actual 3.88
GMT 9:00 IST 14:30 EU Ind Prodn (MoM)
...Market 0.10 ...Previous -1.52 ...Actual 0.41
GMT 9:30 IST 15:00 IN Trade bal
...Market -32.75 ...Previous -27.10 ...Actual -20.67
GMT 20:00 IST 01:30 US TICS
...Kshitij 106.32 ...Market 58.60 ...Previous 15.51 ...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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