The Dollar Index remains under pressure below 99.40, with a near-term retest of that level potentially giving way to 98.50 or lower. EUR/USD is set to pick up pace above 1.1700, aiming for 1.1800 or higher, while USD/JPY is seen edging towards 160 before easing unless it breaks cleanly higher. EUR/INR and EUR/JPY keep an upward bias towards 112.50 and 186-188, respectively, and USD/CNY is viewed as eventually slipping below 6.72 towards 6.70. AUD/USD has 0.72-0.73 in sight, GBP/USD meets initial resistance near 1.37, and USD/INR is pinned in a 95.50-95.75 band; a move above 95.75 could open 96-96.30.
US Treasury and German yields are described as elevated but steady, with US yields still biased higher ahead of the US PCE release tomorrow. German yields are also seen with further upside potential, though a corrective drop could come first before gains resume. India’s 10-year GoI yield is holding above intermediate support, keeping room for a further rise before the broader downtrend reasserts. Equities are mixed: the Dow targets 53,500-54,000 and the DAX 26,250-26,500, while the Nifty holds above 24,100 and may test 24,400; the Nikkei faces resistance near 66,000 with downside to 64,500-64,000, and Shanghai may fall from below 3,900 towards 3,800. In commodities, Brent is seen between $80-$95 and WTI $75-$90, while gold targets $4,750-$4,800, silver $70-$75 and copper $6.65-$6.75; natural gas, having reached $2.80, is projected to extend towards $3.00.
—Derivative Strategies for Currencies and Equities
We recommend that derivative traders position for a weaker US dollar in the coming weeks, especially with the Dollar Index struggling below the 99.40 mark. To capitalize on this, we should look at buying call options on the EUR/USD as it gathers momentum above 1.1700 to target 1.1800. This bearish dollar trend is highly consistent with recent macroeconomic shifts, as cooling US inflation metrics have historically pressured the greenback and forced treasury yields to stabilize.
In the yen market, we suggest using limited-risk strategies like bull call spreads on USD/JPY as it slowly grinds toward the 160 level before an expected pullback. Meanwhile, we can target bullish options plays on EUR/INR and EUR/JPY, which show strong upward trajectories toward 112.50 and 188 respectively. These moves are supported by the Bank of Japan’s ongoing interest rate adjustments, which have kept the yen highly sensitive to yield differentials.
For equity derivatives, we should maintain a bullish bias on Western indices by utilizing bull put spreads on both the Dow and the DAX to capture moves toward 54,000 and 26,500. While we favor call options on the Indian Nifty above the 24,100 support level, we advise purchasing put options on the Nikkei as it faces stiff resistance near 66,000. This divergence reflects stronger economic momentum in the US and Europe, contrasting with Japan’s currency-hedged equity headwinds.
—Commodities: Metals and Energy Plays
With precious metals showing incredible strength, we recommend going long on Gold futures or buying calls targeting the $4,800 level. This historic rally is heavily supported by global central banks increasing their gold reserves, which have consistently risen by over 1,000 tonnes annually in recent years to hedge against fiat volatility. Additionally, we can set up long structures in Natural Gas futures to capture a projected run toward $3.00 as late-summer demand begins to tighten supplies.
