Global Markets:

The Dollar yesterday started the day on a weak footing on expectations that an emergency BOJ meeting will support global stock markets further. When the BOJ failed to meet market expectations the sentiment turned sour and the USD gained across the board on safe haven flows. US Personal Income gained 0.2% in July and spending rose 0.4%. The Yen hit day highs at 85.90 on BOJ optimism but then heavy selling emerged as the special meeting failed to directly address FX. Meanwhile, Euro relief rally stalled in Asia and was dragged lower once again from heavy EUR/JPY sales post BOJ. August Economic sentiment increased to 101.8 vs. 101.1 previously. Elsewhere, Sterling tracked general market movements topping in Asia before giving up all its gains and then turned negative in New York. Month end flows are expected to be slightly negative for the pound and may make way today as London was closed yesterday.

Technical Outlook:

EURO: The Euro (1.2651) fell from its yesterday's high of 1.2757 levels as dollar and yen are trading strong. The crucial support of 1.26 levels is likely to be tested soon and a break below 1.2600 might see further dip towards 1.2500-1.2450 levels. The market may trade in a thin range ahead of FOMC minutes expected tonight. Medium term tone: Neutral to bearish .

GBP: The Pound (1.5460) gave away its major recovery after it made the high of 1.5575 levels. It is currently hovering near the 55 daily EMA. Stochaastic and RSI are standing neutral to slight bearish and the pressure can lead the pair towards 1.5370. Medium term tone: Neutral to bearish.

JPY: Usd/Jpy (84.24) plunged lower after making the high of 85.47 levels. Dollar and yen remains strong ahead of the FOMC meetings expected tonight. Support is seen near 82.85 levels. Close below this crossing is needed to confirm that a short-term top has been posted. Outlook for Yen: Bearish towards 87 levels in Medium term .

AUD: The Aussie (0.8940) lowered from 0.8997 levels in synchronise with other major currencies. Immediate support is seen at 0.8866(55 dailg EMA). Today current account balance data was released better than expected restricting further weakness in the pair.The Fed's monetary policy stance appears to be widening as the RBA's holds tight, a positive for the Aussie despite present political uncertainty. Bias for Aussie remains Overall neutral to weak.

GOLD: Gold($1235) showed a thin trading session yesterday as the dollar rose due to risk aversion mounting ahead of FOMC minutes. The next target in gold would be $1262 levels(high of 27 June) Medium Term remains- Bullish.

Dollar Index: Dollar index is currently trading at 83.12 levels and edged higher to 83.56 last week but failed to sustain above 83.45 cluster resistance (38.2% retracement of 88.70 to 80.08 at 83.37) and turned sideway. A short term top is formed and some more sideway trading should be seen in near term. Sustained trading above 83.45 will confirm that correction from 88.70 has completed at 80.08 and will target 61.8% retracement at 85.40 at least.