Morning briefing: Dollar Index has to rise past 104.50 to establish near term bullishness

Dollar Index has to rise past 104.50 to establish near term bullishness or else they could fall back. USDJPY and EURJPY have fallen, failing to break above 158 and 172 and looks likely to fall further from here. USDCNY can soon test 7.28 in the near term before topping out. The Aussie continues to fall but could find support near 0.6640-0.6600 and bounce back. Pound fall has stalled at 1.29 and is likely to trade sideways between 1.2850-1.3000 for a while. USDINR has scope to rise towards 83.70/75 before a fall back could be seen from there. We might expect some volatility in USDINR today on account of Union Budget 24-25. EURUSD and EURINR have scope to rise towards their key resistance if they stay above 1.0870/1.0850 and 91-90.75 respectively.

The US Treasury yields have risen further. The bounce from the support is sustaining well. This leaves the door open for the yields to move further higher this week. The German yields continue to move up in line with our expectation. The bullish view is intact and the yields can rise further in the coming days. The 10Yr and 5Yr GoI remain vulnerable to fall more from here.

Dow Jones has managed to sustain above its support and while above it, our view will remain bullish. DAX has bounced back as the support at the 18200-18100 zone held well and might extend the bounce further. Nikkei remains subdued but we expect the support at 39000 to hold and produce a bounce back. Nifty lacks a follow through rise and might face volatility today on the outcome of the Union Budget 2024-25. Shanghai to trade sideways between 2900-3000 for a while.

Crude prices have recovered slightly but the broader view remains bearish. Gold and Silver has bounced slightly but could face resistance at 2420-2430 and 29.70-30.00. Copper has to sustain above 4.15 and rise past 4.25 to become bullish or else it would be vulnerable to see further fall. Natural gas outlook remains bullish while above 2.00.

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