GOOD MORNING!
FOREX
The Dollar Index has dipped towards 105.50 while Euro is heading up 1.0750 after downbeat US GDP Q/Q% for Q1 2024 (Advance Estimate) came in at 1.60% from 3.40% in Q4 2023. EURJPY can rise towards 168 while above 166. Aussie and Pound have potential to rise towards 0.66 and 1.2550/1.26. USDJPY trades higher ahead of the BOJ meeting but needs to break above 156 for increased bullishness. USDCNY might trade within 7.24-7.25 for a while. EURINR may remain ranged within 88.50-89.50/90 region. USDINR can remain below 83.40 and trade within 83.40-83.20 for a while.
Dollar Index (105.58) has come down towards 105.50 and may dip further towards 105. Overall a range of 106.50-105.50/105 range could persist for a while unless a decisive break on the either side of the range is seen.
EURUSD (1.0728) is heading up towards 1.0750. A break above it, if seen, can open doors towards 1.0800-1.0820.
EURJPY (166.90) seems to be sustaining well above 166 and could soon test the upper resistance around 168. Thereafter, if the resistance holds, a corrective fall towards 164 or lower could be witnessed in the medium term.
Dollar-Yen (155.57) continues to move up but a confirmed break past 156 will be needed for the pair to head towards 157-158. Else, a fall towards 154.30 or even 152 could be witnessed in the medium term before it attempts to rise back.
USDCNY (7.2451) has recovered a bit after falling sharply to 7.2385 yesterday. A decisive break below 7.24 is needed to confirm a fall towards 7.23/2250 before it bounces back towards 7.25 and higher in the medium term. Else it may trade within 7.24-7.25 for a while.
Aussie (0.6530) is trading higher within its range of 0.64-0.6650, which can persist for a while before a break can be seen on the either side. Within this, a rise towards 0.66 looks possible from here.
Pound (1.2508) can soon test our mentioned targets of 1.2550-1.26 before heading down towards 1.2350 in the coming sessions. Overall, a broad range of 1.2350-1.2550/26 could for some time.
USDINR (83.32) is holding below resistance at 83.40 which is working well. While that holds, we can expect a range of 83.40-83.20 to persist for some time.
EURINR (89.3548) is currently trading near the upper end of its range of 88.50-89.50 and while the MA resistance around 89.50 holds, the range may hold for a while. A broad range of 88.50-90 could persist for a while.
INTEREST RATES
The US Treasury yields have risen sharply after the GDP data failed to meet the market expectation. The US grew (advanced estimates) at 1.6% in the first quarter much lower than the market expectation of 2.4%. The Treasury yields have room to rise further from here. The US PCE data release today is important to watch. The German yields continue to move up. If the momentum continues, there is more room to rise from here. The 10Yr and 5Yr GoI have moved up further there by keeping intact the broader uptrend. The yields can rise more.
The US 10Yr (4.70%) and the 30Yr (4.81%) yields have risen sharply. The 10Yr is heading up towards 4.75%-4.8% as expected. The 30Yr has touched 4.8% and a further rise from here can take it up to 5%.
The German 10Yr (2.63%) and the 30Yr (2.76%) yields have risen further. The 10Yr has risen beyond 2.63% and the 30Yr is in the 2.75%-2.8% region. If the momentum sustains, the 10Yr can extend the rise to 2.8% and the 30Yr can break 2.8% and rise to 3%.
The 10Yr GoI (7.2061%) has moved up further. The bullish view is intact to see 7.3% on the upside. Supports are at 7.15% and 7.1%.
The 5Yr GOI (7.2064%) has held well above its support at 7.16% and is rising back. Outlook is bullish to see a rise to 7.3% and 7.4%.
STOCKS
Dow Jones has fallen sharply and may fall further on a break below 37600. DAX has fallen as the resistance at 18200 held and looks bearish to dip further from here. Nifty has risen sharply, breaking above 22500 and while this break sustains, a further rise can be seen in the near term. Nikkei has scope to bounce back while above 37500-37000. Shanghai to remain ranged within 3000-3100 for a while.
Dow (38085.80, -0.98%) has declined sharply and the fall to 38000 has happened much faster. The downtrend seems to have resumed and the Dow can now test 37200-37000 on the downside on a break below 37600.
DAX (17917.38, -0.95%) has come down, failing to sustain above 18000. It can fall towards 17600. On the weekly chart, 17600-18200 looks likely to be the trading range for now.
Nifty (22570.35, +0.75%) has risen and closed above 22500. While this sustains, a further rise to 23000-23200 can be seen in the coming days. As the Nifty moves above 23000, that will be a time to turn cautious for a reversal.
Nikkei (37780.00, +0.40%) has managed to sustain above 37500. Lower support is seen at 37000. While above these, a rise to 39000 is still possible.
Shanghai (3074.65, +0.71%) has risen within its 3000-3100 sideways range. Broader picture remains intact to see a break above the upper end of the range and rise towards 3150-3200. Support is at 3000-2950.
COMMODITIES
Brent to trade within $85-90 for a while. WTI has risen towards its resistance at $84. A break above $84 is needed for increased bullishness, else it may continue to trade within $84-80 range. Gold and Silver can remain ranged within 2370-2350 for a while. Copper has risen above 4.55 and has scope to rise further in the near term. Natural Gas has bounced as the support at 1.90 has held well.
Brent ($87.96) can remain ranged within $85-90 for some time. A decisive break above $90, if seen, can target $92.
WTI ($83.80) has bounced back towards $84 after getting support at $82. A decisive break above $84 is needed to move up towards $86-88. Else it may continue to trade sideways whitin $84-80 for a while.
Gold (2345) can test the resistance at 2370 before a fall back can be seen towards 2350. A range of 2370-2350 might hold for a while.
Silver (27.40) can trade sideways within 26.50-28 range for some time.
Copper (4.5645) has risen above 4.55. A rise towards 4.60-4.65 looks possible while above 4.55.
Natural Gas (1.9860) bounced back from a low of 1.9260. It can rise towards 2.1-2.2 while above the support at 1.9-1.8.
DATA TODAY
23:05 04:35 UK Cons Conf
...Kshitij Expn -19 ...Expected -20 ...Previous -21
1:30 07:00 AU PPI
...Kshitij Expn - ...Expected - ...Previous 0.9%
3:00 08:30 BOJ Meeting
...Kshitij Expn - ...Expected 0.1% ...Previous 0.1%
12:30 18:00 US Personal Income
...Kshitij Expn 0.5% ...Expected 0.5% ...Previous 0.3
12:30 18:00 US PCE Price Index M/M
...Kshitij Expn 0.3% ...Expected 0.3% ...Previous 0.3%
Data Yesterday
..............
12:30 18:00 US GDP
...Kshitij Expn 3.4% ...Expected 2.5% ...Previous 3.4% ...Actual 1.60%
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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