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The dollar weakened on Euro and Yen strength yesterday after dovish comments from Chicago Fed President Goolsbee asking FED to be watchful on the tight-monetary policy. The downside could be limited to 105-104.70 for the Dollar Index while the Euro can rise towards 1.0750. Dollar-Yen tested 159.92 yesterday but dipped back amid verbal intervention from Vice Finance Minister Kanda while EURJPY continues to trade above 171. Aussie & Pound continue to trade within 0.6580-0.6720 and 1.26-1.28 region respectively. USDCNY is bullish towards 7.28 in the coming weeks while above 7.25/7.24. EURINR can trade within 89.00-90/91 region for some time. USDINR needs to break below 83.45/40 to move towards 83.30 again while upside could remain capped at 83.60/70 for the near term.

The US Treasury yields have dipped and are likely to fall more from here. Support can be tested and then a rise is possible. The German yields are attempting to bounce back from their crucial support as expected. A strong follow-through rise from here will negate the danger of breaking the support. We will have to wait and watch. The 10Yr and 5Yr GoI are holding well above their support. We can expect the yields to rise in the coming days.

Dow Jones and Nikkei have risen well and looks bullish to target further upside from here. DAX has bounced back but needs to rise past 18400 to avoid the danger of falling towards 18000-17700. Nifty bounced back well from its key support. This keeps our bullish view intact to see a rise towards 23800-24000. Shanghai trades lower below 3000 and looks likely to fall more from here.

Crude prices have bounced back keeping the overall bullish view intact. Gold, Silver and Copper looks vulnerable. Natural gas can fall back if the resistance at 2.95/3.00 holds.


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The above views are based on the latest available information. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. While the views are proffered with the best of intentions, neither the author, nor the firm are liable for any losses that may occur as a result of any action based on the above. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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