Some volatility was seen in the Dollar Index, Euro and USDJPY yesterday following the release of the FOMC minutes, but the impact on the markets seems to have been muted. The sell-off in the Dollar Index triggered by the release of the latest US inflation data may continue to push the index down to 102 or lower, while the Euro may hold below 1.10 and USDJPY may fall to 148/146 before showing some reversal.
EURJPY can fall to 161/160 while Aussie and Pound look bullish for a potential rise to 0.66/67 and 1.26/28. However, there may be an initial pause from 0.66 and 1.26 before the upper targets are reached. USDRUB needs to bounce back from 88 or it could become very bearish. USDCNY is bearish towards 7.10/7.05. EURINR fell while below resistance at 92 and could now head towards 90.50-90 while USDINR could head towards 83.50 while maintaining trade above 83.30.
US Treasury yields are at key support. A strong rally from here would be bullish and would avoid the risk of an extended decline. German yields are falling as expected. They have room to test their supports after which a reversal is possible. The 10Yr GoI can go higher if it breaks above the immediate resistance and then pulls back. The 5Yr GoI can move higher within its sideways range.
Dow Jones is slightly lower but broader outlook remains bullish for a test of 35400-35500 on the upside. DAX is stable and may consolidate between 15800 and 16000 for some time. Nifty has risen within its sideways range but needs a decisive break on the upside to further strengthen the momentum. Nikkei outlook is mixed. Shanghai may fall towards 3025 before rallying from there.
Brent and WTI remain stable but outlook is bullish for a rally towards their resistance in the near term. Gold and silver outlook remains bullish. Copper has fallen from levels below 3.85 and if it holds below 3.85, a further decline can be seen. Natural gas remains subdued and has room to test 2.8-2.7 before a rebound can take place.
