Morning briefing: The index can trade within 104.50-104.00

Lower US ADP Employment rate led to fall in the Dollar Index towards 104. The Index can trade within 104.50-104 for the next few sessions while Euro is headed towards 1.09 which if breaks on the upside can extend to 1.0930/50 before coming off again within the 1.09-1.08 range. EURJPY and USDJPY looks ranged within 168-170 and 154-156.50 respectively. USDCNY may remain stable below 7.25. Aussie and Pound trade higher but can soon dip if the current rise does not sustain. EURINR fell from 91.20, unable to sustain the rise. While below 91, it can trade within 89.50-91 region. USDINR is likely to sustain trade within 83.20-83.60 region.

The US Treasury yields have come down further and are below their intermediate supports. There is room to fall further from here in the near-term before a reversal is seen. The German yields have also dipped below their intermediate supports. They can also see an extended dip from here before resuming their broader uptrend. The ECB meeting outcome today is important to watch. The 10Yr and 5Yr GoI have declined below 7.1%. They have to sustain above their immediate support to rise back again. Else they can move back into the earlier sideways range again.

Dow Jones is heading up towards 39000 as expected. A rise past 39000 is needed for increased bullishness. DAX broader outlook will remain bullish as long as it holds above 18400-18200. Nifty has recovered well above 22500 and while this sustains, a further rise can be seen in the near term. Nikkei has bounced back towards 39000 and has scope to break above it and rise further while above the support at 38000. Shanghai can rally towards 3150 as long as it holds above 3050.

Commodities have recovered well. Crude prices has recovered a bit but have resistance ahead, which if holds, can keep our bearish view intact. Gold has moved up towards it upper end of the range. Need to see it it breaks higher or not. Silver has bounced back but needs to rise past 31 to strengthen the bullish momentum. Copper has bounced above 4.60 and while the bounce sustains, a further rise towards 4.7-4.8 can be seen. Natural Gas looks ranged between 2.5-3.0. All eyes are on ECB meeting today where the central bank is expected to deliver a rate cut.

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