Morning briefing: Euro is expected to bounce back above 1.0600

The Dollar Index and Euro are trading near the crucial resistance and support levels respectively. While the index holds below 106, the range of 106-103 can persist. Similarly, the Euro, above 1.06 is anticipated to bounce back higher. USDJPY is nearing the upper end of the range of 152-155, while EURJPY needs to rise above 164.70 to negate the fall to 162. AUDUSD continues to trade lower within the 0.67-0.65 region while the pound and EURINR have slipped below 1.29 and 90 respectively and are likely to be bearish towards 1.26 or lower and 89-88 respectively. USDCNY has risen well but an immediate resistance is coming around 7.25 below which a corrective fall can be seen. USDINR, on a confirmed break past 84.40 can head towards 84.50, else can see an initial fall to 84.30. Watch out for the US CPI & IN Trade balance releases scheduled today.

The US Treasury yields have risen back sharply. But unless they see a sustained rise above their resistances, the bearish view of seeing a fall going forward cannot be ruled out. The US CPI inflation data release today will be important to watch. A lower CPI number will be negative for the yields. Currently the Headline CPI is at 2.41% (YoY) . The German yields have risen back. The bullish view is intact. The yields can rise more going forward. The 10Yr GoI is inching up slowly. It can go up towards the upper end of its current range in the coming days.

Global equity indices remain under selling pressure. Dow Jones turned from the resistance of 44400 and closed below 44000, indicating a corrective fall to 42000/41000. DAX fell to the support of 19000. A break below 19000 would negate our upside target of 19800-20000. Nifty broke below 24000 and closed above 23800; however, a fall below 23800 would extend the downside target to 23600-23500. The Nikkei retreated after reaching a high of 39866.72 and is now trading below 39000, suggesting a potential decline toward the trendline support at 38000. Meanwhile, the Shanghai Composite tested its support at 3400, falling to 3406. As long as the 3400 level holds, the index may aim for an upside target of 3500.

Crude prices have fallen to their immediate support levels above which a bounce back to 74-76 (Brent) and 70-72 (WTI) is expected in the near term. Gold and Silver have tested their support levels, they and can bounce back towards 2650-2700 and 32 respectively. Copper has fallen sharply below 4.2 and can fall further towards 4.1-4.08 before a rise to 4.3-4.4 takes place. Natural has taken a reversal from its immediate resistance at 3 and can fall further towards 2.8-2.6 in the upcoming sessions.

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