The markets are seeing a corrective move after the sharp volatility that followed the US CPI data released earlier this week. The Dollar Index is holding above 104 and may test 105-105.50 while the Euro has fallen from 1.09 and may test 1.08/1.0750 soon. EURJPY remains bullish towards 165/166. USDJPY holds above 150 and could trade within 152-150 for some time.
Aussie may trade within 0.6350-0.6550. Pound falls towards 1.23 while below 1.2550. USDCNY may bounce back towards 7.30 while above 7.22. USDRUB has bounced well from 88 and may have room to see a slow rise towards 93/94 soon. EURINR has dropped slightly and can test 89.50 while below 91. USDINR can rise again towards 83.20/30.
US Treasury yields have rebounded. The downside from here is limited. We can expect yields to stay above their supports. Overall, Treasury yields may remain in a wide range for some time. German yields have also bounced back. However, there is likely to be another leg down before a sustained rise. The 10Yr GoI is coming down as expected. The 5Yr has broken its key supports and looks vulnerable to further declines.
Dow Jones, DAX and Nifty look bullish in the near term. Nikkei has fallen back as resistance at 33500 has held well. Shanghai has fallen towards 3050 but the downside may be limited to 3025.
Brent and WTI continue to fall and have room to test their immediate support in the near term. Gold has fallen after facing rejection from 1980. While silver and copper have continued to rise and look bullish to rise towards their immediate resistance. Natural gas looks range bound within 3.3-2.9.