The Dollar Index is trading lower on a possible cooling of further rate hikes, but continues to trade in the 105-107 range, while the Euro can remain in the 1.05-1.07 range. EURJPY has bounced from 159 but while below 161 has room to fall to 158. USDJPY is trading above 150 and has room to rise slowly to 151/152. The pound may rise to 1.22-1.2250 before falling back to 1.21, while USDCNY may remain stuck around 7.30. Aussie has to rise above 0.6450 to test 0.65 or may fall back towards 0.64 or lower.
USDRUB can trade in the 92-96 range in the very near term, but a possible drop to 90 cannot be ruled out. USDINR is holding below 83.30 against our expectation of a bullish break. The pair may remain range bounded between 83.15-83.30 in the very near term. EURINR may remain within the 89-87.50/87.00 range.
US Treasury yields continue to fall in line with our expectations. There is room to fall further before a reversal is seen. German yields have approached their key supports. If they do not rise again immediately, they may be pulled lower. This will delay the rise we have been expecting. The 10Yr and 5Yr GoI have come down towards the lower end of their respective ranges. We expect the range to remain intact and yields to move higher.
Dow Jones has risen well above its resistance and looks bullish from here. DAX can see an extended rally on a break above 15200. Nifty has rallied but lacks strength. Shanghai has room to break above its resistance at 3050 and rally further in the near term.
Brent and WTI have rallied well as their supports at $84 and $80 respectively have held well and are likely to target further upside. Gold lacks strength but needs to hold above 1980 to avoid the risk of falling. Silver may remain range bound as long as it holds above 22.50.
The main focus today is on the US NFP data, which could drive precious metals prices. Copper is heading towards its key resistance. Needs to see if it breaks higher or not. Natural gas should remain range bound within 3.30-3.70 for a while.
