GOOD MORNING!
FOREX
The Dollar Index is trading higher within its 96-98/99 range. The Euro below 1.17 has a scope to extend the ongoing fall to 1.16 as well. EURINR is trading near the 100 level. Failure to bounce back can drag it further to 99 or even 98 before halting. EURJPY needs to see a rise past 172 to head towards 175. Failure to do so can drag it to 169 initially before the cross attempts to rise back again. USDJPY and USDCNY are holding the respective ranges of 148-145 and 7.18-7.14 for now. The Aussie has crucial resistance at 0.66, need to see whether it holds or not. The Pound has immediate support around the 1.3550 region from where it can bounce back towards 1.37-1.38 levels in the near term. USDINR needs to see either a break past 86.00 or a fall below 85.50 to get further directional clarity.
Dollar Index (97.829) faces immediate resistance at 98 level. A strong break past 98-99 can begin a fresh rally. Till then, the range of 98/99-96 can persist.
EURUSD (1.1674) has slipped below 1.17 again and if sustained, can extend the fall to the support near 1.16 before attempting to bounce back again. Overall, while above 1.16 the target of 1.18 is kept alive for now.
EURINR (100.0603) is trading lower within its 101-100 range. A decisive break below 100 if seen can open the doors for 99 or even 98 in the near term. A rise past 101 will be needed to negate the anticipated fall.
EURJPY (171.55) recovered from the low of 170.80 itself. Still a break past 172 will be needed to open the doors for 175. Else, can initially test 169 before attempting to rise back again. The target of 175 is kept open until further clarity.
Dollar-Yen (146.92) was expected to test 145 but instead it recovered from 146.13 itself. Now, an immediate resistance is coming at 147-148 level. While it holds, a narrow range of 145-148 and can hold for a while before a break happens on either side.
USDCNY (7.1672) is coming off within its 7.18-7.14 range which is likely to persist in the near term, until a break past 7.18 happens.
Aussie (0.6582) is trading higher within its 0.645-0.660 range but has immediate resistance just above current levels. Either a break past 0.66 or a fall below 0.65 will be needed to get further clarity. Watch price action closely to see whether the resistance holds or not.
Pound (1.3558) has immediate support around current levels, above which the Pound can attempt to rise back towards 1.37-1.38 in the near term. Overall, the range of 1.35-1.38 can hold for now.
USDINR (85.7120) can trade within its immediate range of 86.00-85.50 c until a breakout on either side gives further directional clarity.
INTEREST RATES
The US Treasury yields have inched up. But a strong rise above their immediate resistance is needed to go up and avoid falling back. We will have to wait and see. The German yields continue to move up. The bullish view is intact, and more rise is on the cards. The 10Yr GoI remains higher within the range. Need to see if the expected bullish breakout is happening in the coming days or not.
The US 10Yr (4.35%) and 30Yr (4.87%) Treasury yields have inched up. A strong rise above 4.4% (10Yr) and 4.9% (30Yr) is needed to negate the fall to 4.2%-4.15% (10Yr) and 4.75%-4.7% (30Yr). Only then the rise to 4.5% (10Yr) and 5% (30Yr) will come into the picture.
The German 10Yr (2.70%) and 30Yr (3.20%) yields have moved up. The bullish view is intact to see 2.8% (10Yr) and 3.3% (30Yr) on the upside.
The 10Yr GoI (6.3808%) sustains higher within its 6.3%-6.4% range. We retain our bullish bias to see a breakout above 6.4% and rise to 6.5%. For now the range is intact.
STOCKS
The Dow Jones can test 45000 before facing any rejection there while Dax could head towards 25000 while above 24000. Nifty has fallen below our expected near term support of 25400 and could have scope for a fall to 25250-25000 soon. Nikkei has moved up within the range of 40000-39500 which can hold for the near term. Shanghai has sustained to rally above 3500 and looks strong just now. It can soon head towards 3600 in the coming weeks.
The Dow (44650.64, +0.43%) limited its earlier dip to 44000 and is rising back towards near term resistance of 45000. A rejection from 45000 can keep the index between 45000-44000 region for sometime. Thereafter, an eventual break above 45000 will be needed for further bullishness.
DAX (24456.81, -0.38%) dipped slightly yesterday but while above 24000, the index can see a possible test of 25000 initially before facing a rejection there.
Nifty (25355.25, -0.47%) dipped sharply yesterday breaking below our expected support near 25400 that we have been looking for over the last few days. Now while below 25400, the Nifty could have scope for a decline to 25200-25000 before any attempt is made for a rebound.
Nikkei (39701.19, +0.14%) has moved up today as expected. While above 39500, view is likely to be ranged to bullish within the 40000-39500 range.
Shanghai (3517.41, +0.22%) extends its rally above 3500 and could soon be headed towards 3600.
COMMODITIES
Brent and WTI remain supported above $68 and $66 respectively, with potential to rise towards $72–$74 and $70–$72. Gold is gradually moving higher and may reach $3,400–$3,450 soon. Silver has bounced back and could test $38, with a break above this level opening room for $40–$42. Copper stays bullish above $5.50, targeting $5.80–$6.00. Natural gas rebounded unexpectedly due to lower inventory build and may rise towards $3.40–$3.50 while above $3.20.
Brent ($69.08) dipped to a low of $68.54 yesterday, but as long as the immediate support at $68 holds, our outlook of a rise towards $72–$74 in the near term remains intact.
WTI ($67.06) fell to a low of $66.46 yesterday. As long as the immediate support near $66 holds, we retain our view of a rise towards $70–$72 in the near term.
Gold ($3,339.80) is inching up in line with our expectations. It can extend the rally towards our previously mentioned levels of $3,400–$3,450 in the near term.
Silver ($37.69) bounced back sharply to the upper-end of the mentioned range near $37.69 yesterday. It can test $38 in the near term, and a sustained break above this level is needed for continued bullishness towards the $40–$42 levels.
Copper ($5.6020) remains bullish above $5.50, targeting $5.80–$6.00 or higher in the near term.
Natural Gas ($3.3650) bounced back to $3.3980 yesterday, contrary to our expectations, due to a smaller-than-expected build in EIA's weekly inventories. While above $3.20, it can rise further towards $3.40–$3.50 in the coming weeks.
DATA TODAY
6:30 12:00 IN WPI
...Previous 0.39
12:00 17:30 IN CPI
...Kshitij 2.93 ...Previous 2.82
DATA YESTERDAY
6:00 11:30 UK Trade Bal
...Kshtij -23.8 ...Expectation -21.1 ...Previous -23.2
{12:30 18:00 CA Labour Force
Expectations 1.3 ...Previous 8.8
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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