Morning briefing: The Dollar Index rose sharply above 106

The Dollar Index rose sharply above 106, contrary to seeing a fall towards 105 and it is now likely to head towards 106.5-107. Meanwhile, the Euro is expected to test the support at 1.06. EURJPY continues to trade within 165-162 region while USDJPY failed to sustain above 154.80 and can now decline towards 153/152 soon. Aussie and Pound have declined below their respective supports and are likely to test 0.63 and 1.23 respectively. USDCNY has risen past 7.24 but could face rejection around current levels else can test 7.25. EURINR could rise towards the upper end of the 88-90 range. In USDINR, we need to be cautious around 83.50/55. Break above 83.55 will take it towards 83.60/70.

The US Treasury yields have inched. The bias remains positive to see more rise from here. Need to see if a strong follow-through rise is happening from here or not. The German yields have just broken their range on the upside. While the breakout sustains, a further rise is possible. The 10Yr and 5Yr GoI remains bullish and have room to rise more from here.

Dow Jones is stuck in a narrow range below 38100 but remains vulnerable to a fall in the near term. DAX has bounced slightly but outlook will remain bearish as long as it holds below 18000. Nikkei continues to fall and looks bearish to test 36000 before a bounce can be seen. Nifty closed lower just below its key support and a further fall below 21900, if seen, will intensify the sell-off. Shanghai remains bullish to see a break on the upper end of the sideways range and target further upside.

Strong recovery is seen in Crude prices due to geopolitical tensions between Israel and Iran.  Gold and Copper have scope to test their immediate resistance before a corrective fall can happen. Silver looks ranged but has potential to rise while above the support at 28.00-27.50. Natural Gas looks bullish within its 1.50-2.00 sideways range.

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