GOOD MORNING!
FOREX
Most currency pairs are stable today. Dollar Index and Euro could trade between 98.50-99.50 and 1.17-16 respectively while USDJPY and EURJPY can slowly rise towards 157-158 and 182-183 respectively after the intervention by the BOJ last week. EURINR can test 109 before reversing higher while USDCNY needs to break below 6.71 to test support at 6.70 in the medium term. Aussie could rise towards 0.7250-0.73 while the Pound could trade between 1.3475 and 1.3550 respectively. USDINR needs to break below 94.45 to trigger a possible test of lower support near 94 else, a bounce back from current levels if seen can negate bearishness in the near term. Overall a stable range below 95 can be seen for at least a week.
Dollar Index (99.115) has been holding well above 98.50. Near term trade can be seen between 98.50 and 99.50.
EURUSD (1.1614) could have scope to rise to 1.17 while above 1.16.
Dollar-Yen (156.10) trades lower after the BOJ intervention last week. Holding above 155, the currency pair may slowly rise back towards 157-158 in the medium term.
EURINR (109.6799) could have scope to decline towards 109 in the near term. Thereafter, a bounce from there can pull it towards 110 later eventually.
EURJPY (181.28) has risen sharply from levels of 180.22 and can slowly rise towards 182-183 in the medium term.
USDCNY (6.7104) needs to see a decisive break below 6.71 to test 6.70 on the downside.
Aussie (0.7203) seems to be slowly rising and can test 0.7250 before pausing for a reversal.
Pound (1.3512) has near term support at 1.3475 and interim resistance near 1.3550. A break on either side is needed for clarity on near term direction. Till then the said range may hold for the next few sessions.
USDINR (94.49) has support at 94.45 and then lower near 94. A break below 94.45, if seen can take the pair down to test 94 before a reversal is seen from there towards 95.
INTEREST RATES
The US Treasury Yields sustain higher. A decisive break and a strong follow-through rise above their resistance can take them higher. Any dip from here can be short-lived as supports are there to limit the downside. The German yields remain higher and stable. The outlook remains bullish to see more rise. The 10Yr GoI is hovering around a support. A narrow range bound move is a possibility in the near term. But the bias remains positive to see more rise from here.
The US 10Yr (4.78%) and 30Yr (5.24%) yields remain higher and stable. While above 4.75%-4.73% (10Yr) and 5.2% (30Yr) the bullish view is intact to see 4.9%-5% (10Yr) and 5.4% (30Yr) on the upside.
The German 10Yr (3.34%) and 30Yr (3.81%) Yields remain stable around their resistance. A sustained rise above 3.35% (10Yr) and 3.85% (30Yr) is needed to go up to 3.5% (10Yr) and 4% (30Yr). We will have to wait and see.
The 10Yr GoI (6.9625%) is holding above 6.95%. A rise to 7.15% is a possibility. 6.9% can limit the downside if the yield dips below 6.95%.
STOCKS
Dow remains range-bound between 52500-54000 while below 54000. DAX has bounced back and can rise towards 26500. Nifty remains vulnerable below 24000, with a break below 23800 opening the way towards 23600-23500. Nikkei has turned stronger above 66000 amid easing US rate hike expectations and can rise towards 67000-68000. Shanghai is likely to remain within the 3850-4000 range while below 4000.
Dow (53295.72, -0.27%) has pulled back, and while below 54000, a range of 52500-54000 could hold for some time.
DAX (26051.28, -0.09%) has bounced back, contrary to our expectations. It can rise further towards 26500.
Nifty (23,897.70, +0.10%) tested a high of 24005 before closing lower. A decisive break below 23800 may drag the index down towards 23600-23500 in the coming week unless it manages to sustain above 24000.
Nikkei (66200, +0.12%) has bounced back and surged above 66000, contrary to our expectations, amid easing US rate hike expectations. A further rise towards 67000-68000 remains likely.
Shanghai (3930.67, -0.30%) has dipped and can continue to trade within the range of 3850-4000 for some time while below 4000.
COMMODITIES
Brent and WTI remain positive and can rise towards $100 and $95 respectively in the near term. Gold needs to sustain above $4300 to keep the possibility of a rise towards $4600 alive. Silver needs a sustained break above $70 for a move towards $75-$80. Copper is likely to remain range-bound between $6.50-$6.80, while Natural Gas needs to break above $3.00 for a rise towards $3.25-$3.50.
Brent ($96.41) and WTI ($91.98) can rise towards $100 and $95 respectively in the near term.
Gold ($4477.30) needs to sustain above the support near $4300 to keep alive the chances of a rise towards $4600.
Silver ($66.82) needs a sustained break above $70 to move higher towards $75-$80.
Copper ($6.67) can continue to trade within the range of $6.50-$6.80 for some time.
Natural Gas ($2.93) needs a sustained break above $3.00 to move higher towards $3.25-$3.50.
DATA TODAY
9:00 14:30 EU GDP
...Expected 0.4 % ...Previous 0.4 %
FRIDAY'S DATA:-
--------------
EU Retail Sales
...Kshitij Expn -0.3 % ...Expected 0.3 % ...Previous 0.3 % ...Actual -0.6 %
US NFP
...Kshitij Expn. 65.8 K ...Expected 58.0 K ...Previous 21.0 K ...Actual 162.0 K
US Unemployment Rate
...Kshitij Expn. 4.1 % ...Expected 4.1 % ...Previous 4.1 % ...Actual 4.1 %
US Avg Hrly Earnings
...Kshitij Expn. 0.2 ...Expected 0.3 ...Previous 0.2 ...Actual 0.3
US Average Hourly Earnings Production & Non Supervisory Employees
...Previous 0.1 ...Actual 0.34
CA Labour Force
...Expected 15.8K ...Previous 75.1 K ...Actual -41.7 K
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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