GOOD MORNING!
FOREX
The Dollar index needs to break above 101.5 to slowly move up further while he Euro has already broken below 1.14 and can now fall towards 1.13. EURINR can test 107.77-107.50 before bouncing from there while EURJPY may bounce from 183. USDJPY may hold below 162 with immediate downside limited to 161/160. USDCNY has risen well and can test 6.80 before pausing there again for a dip. Aussie looks bearish to 0.69 while Pound needs to bounce from 1.32 to avoid further decline from here. USDINR may test 95/95.10 before facing rejection from there to fall towards 94.75/50.
Dollar Index (101.417) has risen from levels seen yesterday. It would be crucial to see if it can rise and sustain above 101.5 in the coming days.
EURUSD (1.1374) has broken below the crucial support at 1.14. While the decline sustains, it can test 1.1350/1.13 soon.
EURINR (107.8585) is trading just above the support near 107.77-107.50 which needs to hold for it to bounce back towards 108 or higher else it can decline further towards 107 or lower.
EURJPY (183.79) has scope to test 183 before attempting to bounce back towards 185/186 again. Failure to hold above 183 can take it to 182.
Dollar-Yen (161.58) is likely to remain below 162 with downside capped near 161/160 for the next 1-2 weeks.
USDCNY (6.7880) has broken above 6.78 and risen further. While the pair rises, there can be scope to test 6.79/80 soon.
Aussie (0.6916) has dipped as expected to test crucial support at 0.69. A bounce from here can take it back to 0.70/71 in the medium term. Failure to hold above 0.69 can make it vulnerable to see fresh decline towards 0.68/67.
Pound (1.32) is trading at important support level. A bounce or decline from here will set further course of direction for the pound in the near term.
USDINR (94.7250) has scope to rise to resistance near 95/95.10 from where a rejection is possible back towards 94.75/50. Watch price action near 95/95.10.
INTEREST RATES
The US Treasury Yields have bounced back from their support for the second consecutive day. That keeps intact our overall bullish bias. The yields can rise more in the coming days. The US PCE data release tomorrow will need a close watch. Need to see if it can provide the necessary push for the yields to rise. The German Yields have come down further. The outlook is negative. They can fall more from here. The 10Yr GoI is coming down as expected. It can fall more to test its support and then rise back again.
The US 10Yr (4.5%) and 30Yr (4.95%) have bounced back from around 4.45% and 4.9% respectively. That keeps the chances high to see a rise to 4.55%-4.6% (10Yr) and 5%-5.5% (30Yr).
The German 10Yr (2.92%) and 30Yr (3.47%) have come down further. A test of 2.9%-2.85% (10Yr) and 3.45%-3.4% (30Yr) looks likely as expected now. Need to see if the yields are managing to bounce back thereafter or not.
The 10Yr GoI (6.8364%) is moving down. The fall to 6.8% is happening in line with our expectation. The 10Yr GoI can rise back towards 6.9% after this fall.
STOCKS
Global equities have come under pressure following a sharp regional sell-off in Asia, led by a steep decline in South Korea's KOSPI and renewed concerns over the technology and AI sectors. Dow and DAX remain capped below key resistance levels and are vulnerable to declines towards 51000-50000 and 24500 respectively. Nifty has slipped below 24000 and can fall further towards support near 23600, while Nikkei may test the 68000-67000 region before a bounce back is seen. Shanghai is also correcting from recent highs but remains constructive while support near 4070-4050 holds, keeping alive the possibility of a rebound towards 4200.
Dow (52010.13, -0.13%) remains weak below the resistance zone near 52700-53000. This region needs to be breached to trigger a further rise towards 53500-54000. Otherwise, the index remains vulnerable to a decline towards 51000-50000.
DAX (25048.31, -0.11%) has failed to break above the resistance near 25500 and fell back to a low of 24896 yesterday. While below this resistance, a further decline towards 24500 can be seen.
Nifty (23,824.10, -1.16%) declined by 1.16% yesterday as a sharp sell-off in South Korea's KOSPI index, which triggered a circuit breaker, weighed on investor sentiment across Asian markets. While below 24000, the index can decline further towards the 21-Day MA support near 23600. Thereafter, it remains to be seen whether it breaks below this level and declines further towards 23400-23200 or bounces back.
Nikkei (69178.55, +0.12%) fell sharply by more than 3.5% yesterday amid a regional sell-off triggered by concerns over the technology and AI sectors globally. It can decline further towards its immediate support zone near 68000-67000, from where a bounce back can be seen.
Shanghai (4079.99, -0.64%) has fallen back sharply after testing a high of 4175. Immediate support is seen near the 21-Day MA at 4070/4050. While this level holds, a bounce back towards our earlier mentioned target of 4200 can be seen. Otherwise, a break below it could drag the index down towards 4000.
COMMODITIES
Commodities continue to weaken in line with expectations. Brent and WTI remain bearish and can decline further towards $75-$70 and $70-$65 respectively. Gold has broken below $4100 and can test $4000 before a reversal is seen, while Silver continues to slide towards $60. Copper has turned significantly weaker after breaking below key support and now has room to decline further towards $6.00-$5.75. Natural Gas remains range-bound and is likely to trade within the broader $3.00-$3.50 range for some time.
Brent ($76.11) has fallen in line with our expectations and can decline further towards $75-$70 in the near term.
WTI ($72.32) is falling as expected and can decline further towards $70-$65 in the near term.
Gold ($4080.30) has fallen below $4100 in line with our expectations and can test $4000 in the coming sessions before a reversal is seen.
Silver ($61.25) continues to fall in line with our expectations and can decline further towards $60 in the near term.
Copper ($6.11) has broken sharply below support, contrary to our expectations, and tested a low of $6.11 yesterday. There is room for a further decline towards $6.00-$5.75.
Natural Gas ($3.1850) can remain within the broad $3.00-$3.50 range for some time.
DATA TODAY
GMT 9:00 IST 14:30 GER IFO Business Climate
...Kshitij 86.3 ...Market 85.6 ...Previous 84.9
GMT 9:00 IST 14:30 GER IFO Business Situations
...Kshitij 85.3 ...Market 86.0 ...Previous 86.1
GMT 9:00 IST 14:30 GER IFO Business Expectations
...Kshitij 86.0 ...Market 86.1 ...Previous 83.8
GMT 12:30 IST 18:00 US Current Account Balance
...Kshitij -241.23 ...Market -219.0 ...Previous -190.7
GMT 14:00 IST 19:30 US New Home Sales
...Kshitij 606.7 ...Market 637.0 ...Previous 622.0
DATA LAST FRIDAY
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NO MAJOR DATA TO BE RELEASED TODAY
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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