The Dollar Index plunged after the release of the NFP data on Friday, taking most other currencies higher against the Dollar. The Dollar Index has fallen to test 105 but will have to see if it can bounce back from here or head lower towards 104. The Euro and EURJPY are trading higher and may test 1.0750-1.08 and 161-162 while holding above 1.07 and 160 respectively. USDJPY is holding above 148.70 and may slowly rise towards 149-150 again soon.
Aussie and Pound have risen sharply but need to hold above 0.65 and 1.23 to move higher in the near term. USDCNY has fallen sharply and could now head towards 7.25. USDRUB is heading towards 90 as expected. USDINR may open a gap down near 83. EURINR has rallied strongly and may head towards 89.
US Treasury yields continued to fall after Friday’s jobs report. The US NFP rose by 150K against the market expectation of 178K. Yields may fall further to test their supports and then bounce back. German yields have fallen below their supports, negating our view of a bounce. Further declines are possible. The 10Yr and 5Yr GoI are just above their key supports. Failure to bounce from here may drag them lower.
Stocks look bullish in the near term. Dow Jones and Dax can go higher on a break above 34200 and 15200 respectively. Nifty has room to test 19400-19500 on the upside. Nikkei has rallied sharply and has room to test its key resistance before a reversal can be seen. Shanghai is trying to break above its resistance at 3050.
Brent and WTI have fallen back towards support after failing to break above $88 and $84 respectively. We will have to see if the support holds and produces a bounce in crude prices or not. Gold and silver rallied last Friday on the release of weaker than expected US NFP data, which came in at 150K versus market expectations of 178K, but are likely to remain range bound for some time. Copper lacks the strength to rise above its immediate resistance. Natural gas remains mixed and has fallen towards the lower end of the 3.30-3.70 range.
