Morning briefing: Crude prices have fallen on hopes

Extreme volatility hit the markets as the BOJ intervened and a mix of US data releases yesterday, with the GDP coming out lower than expected and the PCE inflation having cooled in June. USDJPY plunged to 157.95 taking down the Dollar Index to 99.85. While both have seen a good recovery from those lows, an eventual and slow rise is still on the cards for the near term. Euro trades below immediate resistance at 1.1525 and could see a slow dip from here. EURJPY can rise back towards 186 while above 184 while USDCNY has broken below 6.75 for the first time and unless it bounces back immediately, we would open chances of testing 6.70 in the medium term. Aussie and Pound have risen but look short-lived and could soon dip in the medium term. USDINR is likely to open gap down today. Support at 95.25 is crucial to watch. Need to see if the RBI intervenes in the 95.25-95.00 region today.

The US Treasury Yields have come down from their highs. Support is there to limit the downside. The broader view remains bullish. The yields have room to rise more. The German Yields sustain higher. The bullish view is intact. The yields can rise further from here. The 10Yr GoI has risen further. While this sustains, the yield can go further higher before resuming its overall downtrend.

Dow has rebounded sharply but remains vulnerable to a decline towards 51000-50000 while below 53000. DAX continues to strengthen and can test 26000, after which a break higher or a pullback towards 25000 will be crucial to watch. Nifty remains constructive above 24000 and can extend its rally towards 24400-24500. Nikkei is testing key resistance near 66000, and a sustained break above this level could open the way towards 67000-68000. Shanghai is likely to remain range-bound within the 3750-3900 range for some time.

Crude prices have fallen on hopes of a diplomatic resolution to the US-Iran conflict. Brent and WTI are likely to remain within the broad $80-$100 and $75-$95 ranges until clearer directional cues emerge. Gold can continue to trade within the $4000-$4200 range, while Silver is expected to remain range-bound between $55 and $65. Copper has strengthened and could rise further towards $6.55-$6.60 on a sustained break above $6.50. Natural Gas has recovered but remains vulnerable to a decline towards $2.65 in the near term.