GOOD MORNING!
FOREX
The Dollar Index looks ranged within the 101-100.50 region for now who may break higher to test 102 eventually. This could take the Euro to 1.1475/80 initially before falling to 1.14/1.1380. USDJPY has scope to rise to 162/163 while markets expect an intervention from the BOJ above 162.50 level. EURINR can trade within 108.50-109.50 while EURJPY may rise towards 185/186 before falling to 184/183. USDCNY may trade within the 6.76-6.8250 region for the coming weeks. Aussie and Pound could remain below 0.70 and 1.34/35 for the very near term as these hold as interim resistances. USDINR could rise towards 95.75/96 on. Abreak above 95.50.
Dollar Index (100.841) has dipped but has support at 100.50 above which we may expect a bounce back towards 101-102 soon.
EURUSD (1.1442) has risen and could be headed towards 1.1475/80 while above 1.14. Thereafter, we may face a rejection back towards 1.14-1.1350.
EURINR (109.1072) rose contrary to our expectations of seeing a dip to 108. We may expect a narrow range of 108.50-109.50 and a broad range of 108-110 to hold for the next couple of weeks.
EURJPY (185 24) is headed towards 186 as expected from where a rejection can drag it back to the 184/183 region.
Dollar-Yen (161.92) has scope to rise to 162-163 in the coming days as the pair looks strong above 160. Markets expect an intervention from the BOJ but at what level is to be seen.
USDCNY (6.7886) may continue trade within the broad 6.8250-6.76 region for the next 2-3 weeks.
Aussie (0.6952) is likely to test 0.70 before facing rejection from there.
Pound (1.3395) has interim resistance at 1.34 and higher at 1.35 which if holds can push the price towards 1.33/32 in the near term.
USDINR (95.4050) tested 95.49 yesterday before closing slightly lower. As expected the spot is slowly moving higher. A break above 95.50 can trigger a rally to 95.75/96.00 in the coming days.
INTEREST RATES
The US Treasury and the German Yields are moving up in line with our expectation. Both have room to rise further to their resistance. The US yields will need a watch after they test their resistance. The German yields are expected to turn down from their resistance. The 10Yr GoI has declined below its support as expected. It can now see a deep fall from here. Any intermediate bounce will be short-lived.
The US 10Yr (4.48%) and 30Yr (5%) yields are inching up. Our view of seeing 4.55% (10Yr) and 5.05% (30Yr) on the upside remains intact. The price action thereafter will need a watch.
The German 10Yr (2.95%) and 30Yr (3.53%) are moving up towards 3% (10Yr) and 3.55% (30Yr) in line with our expectation. We expect the yields to turn down thereafter.
The 10Yr GoI (6.6851%) has declined below 6.7% as expected. Any bounce will now be capped at 6.75%-6.8%. The downside is now open to see a deeper fall to 6.5%-6.4%.
STOCKS
Global equities remain mixed. Dow and Nifty continue to strengthen and can rise towards 54000 and 24600-24800 respectively while holding above key support levels. DAX needs a sustained break above 26000 to extend its rally towards 26500; otherwise, a pullback towards 25500-25000 is possible. Nikkei is likely to remain range-bound between 68000 and 73000. Shanghai continues to hold above 4000 and could trade within the 4000-4150 range for some time.
Dow (53444.88, +0.13%) is inching higher in line with our expectations and can rise further towards 53500-54000 in the near term while it remains above 53000.
DAX (25936.68, -0.12%) is struggling to break above 26000 and needs a sustained move above this level to trigger a further rise towards 26500 in the near term. Otherwise, if this resistance holds, a pullback towards 25500-25000 can be seen.
Nifty (24,430.35, +0.66%) has risen above 24400 and closed above it, in line with our expectations. While it remains above this level, a further rise towards 24600-24800 can be seen.
Nikkei (69200.76, -1.60%) could continue to trade within the broad range of 68000-73000 for some time. A sustained break below 68000 would drag it further down towards 67000-66500.
Shanghai (4016.84, -0.55%) is holding above the key support near 4000. While this level holds, our earlier mentioned range of 4000-4150 could persist for some time.
COMMODITIES
Crude prices remain under pressure as higher OPEC+ output and lower Saudi selling prices continue to weigh on the market. Brent can decline towards $70-$65, while WTI may test $65 before either bouncing towards $70-$75 or falling further to $60. Gold is facing resistance near $4200-$4250 and could pull back towards $4100-$4000 unless it breaks higher. Silver and Copper remain constructive and can rise towards $65-$70 and $6.30-$6.40 respectively. Natural Gas is likely to remain range-bound within the broader $3.00-$3.50 range.
Brent ($72.48) remains subdued. Saudi Arabia-led OPEC+ has agreed to raise oil production by another 188,000 bpd from August, continuing its gradual supply increase. Saudi Arabia has also sharply cut its official selling prices for Asian buyers, keeping pressure on crude oil prices. A further decline towards $70-$65 remains likely in the near term.
WTI ($69.06) can decline further towards $65 in the near term. If $65 holds, a bounce back towards $70-$75 can be seen. Otherwise, a break below this level could drag the price further down towards $60.
Gold ($4153.50) is facing resistance near $4200-$4250, which has held for now. If this resistance continues to hold, a pullback towards $4100-$4000 can be seen. Otherwise, a break above it could take the price higher towards $4300-$4400.
Silver ($61.91) can rise towards $65-$70 in the near term.
Copper ($6.27) has risen in line with our expectations and can move higher towards $6.30-$6.40 in the near term.
Natural Gas ($3.2490) can continue to trade within the broad $3.00-$3.50 range for some time.
DATA TODAY
GMT 12:30 IST 18:00 US Trade Balance
...Kshitij -51.27 ...Market -78.50 ...Previous -55.88
DATA YESTERDAY
==============
GMT 9:00 IST 14:30 EU Retail Sales
...Kshitij 0.16 ...Market 0.20 ...Previous -0.19 ...Actual 0.19
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.
WARNING !!
Visitors should be aware that Foreign Exchange transactions and trading are or can be subject to laws, rules and regulations of the country in which the entity undertaking the transactions is situated. It is incumbent upon the Visitors to keep themselves informed and abreast of the Laws they are (or would be expected to be) subject to and governed by, and act in accordance thereto.
