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For the 24 hours to 23:00 GMT, Silver declined 0.06% against the USD and closed at USD16.49 per ounce, tracking losses in gold prices.

In the Asian session, at GMT0300, the pair is trading at 16.50, with silver trading 0.06% higher against the USD from yesterday’s close.

The pair is expected to find support at 16.45, and a fall through could take it to the next support level of 16.41. The pair is expected to find its first resistance at 16.53, and a rise through could take it to the next resistance level of 16.56.

The white metal is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

For the 24 hours to 23:00 GMT, Crude Oil rose 1.32% against the USD and closed at USD66.98 per barrel.

However, gains in crude prices were limited, as investors were grappled with concerns that major oil producers such Saudi Arabia and Russia would boost crude production.

Separately, on Friday, Baker Hughes reported that the US oil rig count rose by 15 to 859 in the week ended 25 May.

In the Asian session, at GMT0300, the pair is trading at 66.77, with oil trading 0.31% lower against the USD from yesterday’s close.

The pair is expected to find support at 66.10, and a fall through could take it to the next support level of 65.44. The pair is expected to find its first resistance at 67.33, and a rise through could take it to the next resistance level of 67.90.

Crude oil is showing convergence with its 20 Hr moving average and trading below its 50 Hr moving average.

Daily Pivots: (S1) 0.9905; (P) 0.9931; (R1) 0.9963; More...

Intraday bias in USD/CHF remains neutral at this point. Focus stays on 0.9977 minor resistance. Break there will argue that corrective pull back from 1.0056 has completed already. Intraday bias will then be turned back to the upside for retesting 1.0056 high first. In case of another fall, we'd expect strong support from trend line (now at 0.9848) to contain downside and bring rebound. However, sustained break of the trend line will argue that it's a larger scale correction and will target 0.9724 fibonacci level.

In the bigger picture, medium term decline from 1.0342 has completed with three waves down to 0.9186. Rise from there is currently viewed as a leg inside the long term range pattern. Hence, while further rally would be seen, we'd be cautious on strong resistance from 1.0342 to limit upside. For now, further rise is expected as long as 38.2% retracement of 0.9186 to 1.0056 at 0.9724 holds.

STOCKS

Most markets, except for India (which rose) and the USA (which was closed), have been a little bearish over yesterday and today. This is within the overall indecisive range that most markets are in currently.

The DAX (12863, -74.55, -0.58%) fell a bit on Italian election jitters, but needs to break below 12800 to acquire more bearishness.

Although the Nikkei (22274, -206, -0.92%) saw a small uptick yesterday, it trades appreciably lower today, pulled down by the decline in Dollar-Yen to 109.00. A break below 22200 (possible) will take the Nikkei down to 21900.

The Shanghai (3136, +0.03%) trades relatively flat today, but may dip towards 3100 in the course of the week.

We had pointed 10600-700 as an important Resistance for the Nifty (10688.65) which peeked above 10700 during the day but then closed below it. We are unclear whether it sees further upward extension today or runs into profit taking.

The Dow (24753.09) will open today after a holiday yesterday. We have to wait and watch to see when and how it breaks out of the "No Man's Land" of 24600-25100.

COMMODITIES

WTI (66.88) is trading above near term support at 65.50 and while that holds, there could be chances of a bounce back to levels above 67.50. A break below 65.50 is seen could take the price lower towards 63.75 in the coming weeks.

Decent support in the 73.50-73.70 zone is visible on the Brent (75.71) which may hold for the coming sessions producing a bounce towards 77 soon. Only on a break below 73.50 would we focus on lower levels.

The Brent-WTI spread has shot up to 8.75, breaking the trend resistance of 7.75 but could pause near 9.00-9.30 levels before coming off towards 7.75 again in the coming sessions. This could indicate a near term rise in the crude prices.

The 21-day Ma on the Gold (1298.21) daily line chart seems to have acted as a decent resistance pushing off the Gold price to levels below 1300 again. There is scope of falling towards 1280-1270 on the downside in the medium term. But, also watch interim support near 1290.

Copper (3.0809) has been moving sideways without any major movement just now. It could continue to see range-trade within 3.02-3.15 region for the coming sessions. Unless we see a clear break on either side, it would be difficult to project further direction. Failure to sustain above 3.02, could take it down to 2.95 in the medium term.

FOREX

Dollar index (94.347), as we expected, did test support on daily candles yesterday (near 93.86) and then rose back to a high of 94.50, thereby testing resistance trendline. It could see a slight downmove towards 94.10-94.20 in today's session and then again rise towards 94.6 tomorrow. In case it breaks support near 94.10, the downmove could extend upto 93.6, which should then produce a bounce. 95 could be tested sometime in the 1st half of June. The upside in the next 2 weeks might be capped by 95.00-95.65.

Euro (1.1627), exactly as we had expected, tested a high near 1.173 yesterday and then fell from there to 1.161. In today's session, it could rise to test resistance near 1.166 on daily candles and then again dip from there towards 1.16. If it breaches resistance, then the upmove could extend till 1.174, but ultimately it should again move down. Euro's downside target for the next couple of weeks is 1.155-1.145.

Dollar Yen (109.01), contrary to our expectation, did not continue its rise towards 110.5 and has instead dipped towards 109 once again. While above 109, it could again see a rise towards resistance on weekly candles near 111.5-112.0. If it breaks 109, it could still get some support near 108 (21 Weeks MA). A break of 108 could however imply the onset of medium term bearishness.

Euro Yen (126.77): Our expectation of ranging between 129.5-128.0 for this week did not work out as the Euro yen broke support near 128-127 on weekly line chart. It could now downtrend quickly towards 125 (support on weekly candles) by next week.

Pound (1.3317): Pound is staying within the channel on daily candles. As mentioned yesterday, the upside might be capped by 1.335 and levels near 1.32 could be tested later in the week.

Dollar Rupee (67.435) : In short, even though Dollar-Rupee is highly Oversold, a further dip to 66.90 cannot be fully ruled out. Direction is likely to be influenced by Nifty strength + Brent weakness (leading to Rupee strength) or Nifty weakness + Brent strength (leading to Rupee weakness).

INTEREST RATES

Supports on medium term charts are breaking for US yields. If yields don't see a bounce anytime soon, then we might have to abandon our earlier medium term target of 3.2%-3.3% for the 10 Year yield. An important question now in this context is whether the June rate hike has already been factored in by traders. If that is so, then the current downmove could continue. If not, yields could rise again.

US 10 Yr Yield (2.89%), 30 Yr (3.06%), 5 Yr (2.72%), 2 Yr (2.45%):

The US 30 year and 5 year yields have continued their break below respective supports near 3.11% and 2.80% on medium term chart. Yesterday we said that this could be a false break and the yields could rise back up from here. We would still give some importance to this possibility as the 10 year yield has still not broken medium term support (near 2.85%-2.88% - earlier mentioned as 2.91%). If the 10 Year yield respects this support and rises from there, the 30 year and 5 year yields could follow suit.

The German 10 Year yield (0.34%) has broken crucial support on medium term and long term charts near 0.40%. If it doesn't turn out to be a false break, this could be an indication that the bearishness in global bond markets might be pausing.

Daily Pivots: (S1) 109.13; (P) 109.52; (R1) 109.80; More...

USD/JPY weakens again today but near term outlook remains unchanged. We'd continue to expect strong support from 108.82 cluster support (38.2% retracement of 104.62 to 111.39 at 108.80) to contain downside and break rebound. Above 109.82 minor resistance will argue that the pull back from 111.39 is completed. Intraday bias would be turned back to the upside for retesting 111.39. However, on the downside, firm break of 108.82 will argue that the rise from 104.62 is possibly over. Deeper would then be seen to 61.8% retracement at 107.20 and possibly below.

In the bigger picture, corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Rise from 104.62 is possibly resuming the up trend from 98.97 (2016 low). This will be the preferred case as long as108.82 support holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above. However, sustained break of 108.82 will dampen the bullish outlook and revive the case of a break of 104.62 low before bottoming.

Yen is staying strong today and it's extending recent rally. Falling major European and US treasury yields and risk aversion are the main factors. German 10 yield bun yield closed at 0.353% yesterday's concern. That's nearly half of this month's high at 0.651%. US 10 year yield's decline continues in Asian session hitting as low as 2.886, now at 2.902. TNX reached as high as 3.115 less than two weeks ago.

Elsewhere in the currency markets, Swiss Franc is finally picking up some strength today and is trading as the second strongest. But for the week it remains the weakest one. Notable selling is seen in Aussie and New Zealand Dollar today. But Dollar is the third weakest.

Technically, USD/JPY could be pressing 108.82 key near term support today. Reaction to this level will tell whether the fall from 111.39 is corrective or reversing the near term trend.

North Korean and US officials working on the June 12 summit

North Korea and the US are starting the preparation for the June 12 summit between Kim Jong-un and Donald Trump.

On the North Korean side, Kim Jong-un's "butler" Kim Chang-son, de factor chief of staff, flew to Singapore via Beijing overnight. Separately, a form spy chief Kim Yong-chol is flying to Washington.

On the US side, White House deputy chief of staff for operations Joe Hagin flew to Singapore from Japan with a team of other officials.

Separately, Trump talked with Japan prime minister Shinzo Abe on phone yesterday. And the White House said Trim and Abe "affirmed the shared imperative of achieving the complete and permanent dismantlement of North Korea's nuclear, chemical, and biological weapons and ballistic missile programs." And they would meet before the Kim-Trump summit.

St. Louis Fed Bullard urged caution on further rate hike with three reasons

St. Louis Fed President James Bullard urged caution on further rate hike in near term in a presentation at a seminar in Tokyo.

And he laid out three reasons for discussions.

First, market-based inflation expectations in the U.S. remain somewhat low.

Second, the current level of the policy rate appears to be neutral, meaning it is putting neither upward nor downward pressure on inflation.

Third, the U.S. nominal yield curve could invert later this year or in 2019, which would be a bearish signal for U.S. macroeconomic prospects,.

Here is the full presentation.

Canada Freeland in Washington again for NAFTA talks

Canadian Foreign Minister Chrystia Freeland will fly to Washington on Tuesday to continue NAFTA negotiations. Her spokesman Adam Austen said she will be there on Tuesday and Wednesday. And he added that "we've said all along we are ready to go (to Washington) at any time."

A spokesman for US Trade Representative Robert Lighthizer said Freeland would meet the U.S. trade chief on Tuesday, but did not give details of the meeting.

Mexican Economy Minister Ildefonso Guajardo said last week that there is around 40% chance of concluding NAFTA talks before Mexican presidential election on July 1. But Guajardo will not be there at the Tuesday meeting. Instead, he is in Paris for meetings of OECD and WTO.

German Merkel concerned with weakening international cooperations

German Chancellor Angela Merkel expressed her concerns on weakening international cooperation at a conference in Berlin yesterday.

She said "international agreements and institutions are being weakened. This is worrying, since our multilateral global order comes from the lessons we learned from the terrible world wars of the last century." She added that "the people who experienced World War Two, the last true global catastrophe, are dying out and are no longer there as eyewitnesses." And, these people "learned from that terrible experience not to embed emnity but that you had to try and build friendships with each other."

Regarding trade with the US, She said "we are happy to negotiate, but it mustn't be under a sword of Damocles."

On the data front

Japan unemployment rate was unchanged at 2.5% in April. Swiss trade balance and Eurozone M3 will be featured in European session. Later in the day, US will release S&P Case-Shiller house price, but main focus is on Conference Board consumer confidence.

USD/JPY Daily Outlook

Daily Pivots: (S1) 109.13; (P) 109.52; (R1) 109.80; More...

USD/JPY weakens again today but near term outlook remains unchanged. We'd continue to expect strong support from 108.82 cluster support (38.2% retracement of 104.62 to 111.39 at 108.80) to contain downside and break rebound. Above 109.82 minor resistance will argue that the pull back from 111.39 is completed. Intraday bias would be turned back to the upside for retesting 111.39. However, on the downside, firm break of 108.82 will argue that the rise from 104.62 is possibly over. Deeper would then be seen to 61.8% retracement at 107.20 and possibly below.

In the bigger picture, corrective decline from 118.65 (2016 high) has completed with three waves down to 104.62. Rise from 104.62 is possibly resuming the up trend from 98.97 (2016 low). This will be the preferred case as long as108.82 support holds. Decisive break of 114.73 resistance will confirm our view and target 118.65 and above. However, sustained break of 108.82 will dampen the bullish outlook and revive the case of a break of 104.62 low before bottoming.

Economic Indicators Update

Key Highlights

The British Pound declined further and broke the 1.3350 support against the US Dollar.

• There are two bearish trend lines in place with resistance at 1.3330 and 1.3375 on the 4-hours chart of GBP/USD.
• The pair may perhaps extend the current decline towards the 1.3250 level in the near term.
• Today in the US, the S&P/Case-Shiller Home Price Indices for March 2018 will be released, which is forecasted to increase 6.4% (YoY).

GBPUSD Technical Analysis

The British Pound failed to gain traction and declined further from the 1.3420 resistance against the US Dollar. The GBP/USD pair declined and broke the 1.3350 support to move further in the bearish zone.

Looking at the 4-hours chart, there is a clear downtrend in place from well above 1.3450. An intermediate swing high at 1.3420 acted as a major hurdle and prevented gains. As a result, the pair fell sharply to a new monthly low below 1.3300.

On the downside, the pair could test the 1.236 Fib extension level of the last wave from the 1.3305 low to 1.3421 high at 1.3277. Below this, the pair could even break the 1.3250 level in the near term.

On the upside, there are two bearish trend lines in place with resistance at 1.3330 and 1.3375 on the 4-hours chart of GBP/USD. A proper close above 1.3375 and 1.3400 is required for buyers to take control.

An intermediate resistance sits near 1.3390, which is also a pivot level. Other major pairs such as EUR/USD also declined and traded to new monthly lows below 1.1650.

Overall, it seems like the US Dollar buyers are in control and EUR/USD and GBP/USD could extend slides in the near term.

Economic Releases to Watch Today

• S&P/Case-Shiller Home Price Indices for March 2018 (YoY) – Forecast +6.4%, versus +6.8% previous.
• Dallas Fed Manufacturing Business Index for May 2018 – Forecast 23.3, versus 21.8 previous.

German Chancellor Angela Merkel expressed her concerns on weakening international cooperations at a conference in Berlin yesterday.

She said "international agreements and institutions are being weakened. This is worrying, since our multilateral global order comes from the lessons we learned from the terrible world wars of the last century." She added that "the people who experienced World War Two, the last true global catastrophe, are dying out and are no longer there as eyewitnesses." And, these people "learned from that terrible experience not to embed emnity but that you had to try and build friendships with each other."

Regarding trade with the US, She said "we are happy to negotiate, but it mustn't be under a sword of Damocles."

Canadian Foreign Minister Chrystia Freeland will fly to Washington on Tuesday to continue NAFTA negotiations. Her spokesman Adam Austen said she will be there on Tuesday and Wednesday. And he added that "we've said all along we are ready to go (to Washington) at any time."

A spokesman for US Trade Representative Robert Lighthizer said Freeland would meet the U.S. trade chief on Tuesday, but did not give details of the meeting.

Mexican Economy Minister Ildefonso Guajardo said last week that there is around 40% chance of concluding NAFTA talks before Mexican presidential election on July 1. But Guajardo will not be there at the Tuesday meeting. Instead, he is in Paris for meetings of OECD and WTO.

North Korea and the US are starting the preparation for the June 12 summit between Kim Jong-un and Donald Trump.

On the North Korean side, Kim Jong-un's "butler" Kim Chang-son, de factor chief of staff, flew to Singapore via Beijing overnight. Separately, a form spy chief Kim Yong-chol is flying to Washington.

On the US side, White House deputy chief of staff for operations Joe Hagin flew to Singapore from Japan with a team of other officials.

Separately, Trump talked with Japan prime minister Shinzo Abe on phone yesterday. And the White House said Trim and Abe "affirmed the shared imperative of achieving the complete and permanent dismantlement of North Korea's nuclear, chemical, and biological weapons and ballistic missile programs." And they would meet before the Kim-Trump summit.