Dollar Index trades above 103 and has scope to test 103.50-104 before reversing. Euro can break below support at 1.09 and open a possible fall to 1.08. Pound trades within 1.26-1.28 while Aussie is headed towards crucial support at 0.64 from where a bounce can be expected. USDJPY looks bullish towards 146-148 in the medium term while EURJPY may remain ranged above 158 for a few sessions. USDCNY is in a strong upmove and a break above 7.30 can take it up towards 7.35/40 in the coming weeks. USDRUB may trade within the broad 94-104 region. EURINR can rise while above support at 90.50. USDINR is closed today but the NDF quotes 83.39/40. Need to see if the pair can open with a gap up tomorrow.

Dollar Index (103.20) trades above 103 and has scope to test 103.50-104 before falling from there. Note that 103.50-104 is a crucial resistance zone which is likely to produce a rejection in the coming weeks.

EURUSD (1.0905) has come down to immediate support at 1.09 which may break on the downside and open door for a possible fall to 1.08 by the end of the month. Thereafter we may expect a bounce back towards 1.09/10 or higher eventually. For now, watch price action at 1.09.

EURJPY (158.66) has immediate support at 158, above which there is a fair chance of seeing some sideways consolidation within 158-160 region. However, a break below 158 if seen will make the pair bearish towards 157/156.

Dollar-Yen (145.49) has risen to 146 as expected but we need to see if it will pause for a while or continue to rally towards 147/148. Preference is to see a pause for a few sessions before resuming the upmove.

USDCNY (7.2958) has rallied well in line with our medium term expectation of a rise towards 7.30. There is scope for a further rise towards 7.35/40 on the long-term charts which could materialize on a sustained break above 7.30. However, there could be some interim dips which could be short-lived.

Pound (1.2697) continues to fluctuate within 1.26-1.28 region and needs a clear break out on either side for indication of further direction.

Aussie (0.6449) is headed towards important support at 0.64 which needs to hold in order to produce a bounce back towards 0.66. Failure to bounce from 0.64 could make Aussie vulnerable to a fall towards 0.63/62.

USDRUB (97.98) saw high fluctuation within 94-102 region almost touching both levels within the last 2-sessions. Support is seen at 94 above which we may expect some sideways consolidation within 104-94 region.

USDINR (82.9550) tested 83.0725 on Monday before closing below 83. NDF currently quotes 83.39/40 but the OTC markets are closed today for Parsi New year and will open tomorrow after the 2-day holiday. If the NDF rates continue to quote higher over the day, the spot may open with a gap up tomorrow.

EURINR (90.9067) has immediate support at 90.50 which if holds can produce a bounce back to 91+ levels soon. Failure to sustain above 90.50 will take the pair down towards 90-89.50 by the end of this month before again resuming the upmove.

The US Treasury yields sustain higher. Outlook is bullish and the yields can rise further. The German yields have risen further thereby confirming the range breakout. More rise is on the cards. The 10Yr GoI has dipped slightly from its high while the 5Yr GoI sustains higher. Outlook is bullish for the yields to rise in the coming days. Supports are there to limit the downside.

The US 10Yr (4.20%) and the 30Yr (4.31%) yields sustain higher. The view is bullish to see a rise to 4.3%-4.35% (10Yr) on a sustained break above 4.2%. The 30Yr can test 4.4% while it sustains above 4.3%.

The German 10Yr (2.67%) and the 30Yr (2.74%) yields have risen further. View is bullish for the 10Yr and 30Yr to see 3%-3.1% over the medium-term, with intermediate corrections.

The 10Yr GoI (7.2034%) has dipped from the high of 7.2240%. View is bullish to see 7.35% with supports at 7.18% and 7.14%. Intermediate resistance is at 7.24%

The 5Yr GOI (7.2017%) holds higher and can target 7.45% on the upside in the coming weeks. Support is at 7.1%.

Equities look bearish. Dow has broken its 35000-35500 range on the downside and has scope to come down further from here. DAX remains vulnerable to a further fall in the near term. Nifty bounced back on Monday but the bias remains bearish for a fall to our expected level. Nikkei has broken below its 32000 support level and looks likely to come down further from here. Shanghai is bearish for a fall to 3100.

Dow (34946.39, -1.02%) has broken its 35000-35500 range on the downside. A test of 34800-34700 is likely. The chances of the fall extending up to 34500 and lower will have to be seen.

DAX (15767.28, -0.86%) remains vulnerable for a fall to 15500-15400. Resistance is at 16000-16100

Nifty (19434.55) can fall back and remain weak to break 19300 and fall to 19000. Thereafter a bounce is possible.

Nikkei (31906.25, -0.48%) has broken below the support at 32000. A dip to 31700-31500 can be seen from here. Thereafter we need to see if it bounces back from 31500 or not.

Shanghai (3158.35, -0.56%) remains subdued but is consolidating above 3140. It may come down to 3100 before a bounce back is seen.

Brent and WTI have come down as expected. Failure to hold above their immediate support would be further bearish in the near term. Gold can come down further if it remains below 1940. Silver and Copper are likely to hold above their supports at 22 and 3.65-3.64 respectively. Natural gas has fallen back sharply and is bearish for a fall towards 2.5.

Brent ($ 84.76) has come down towards $ 84 as expected. Failure to hold above $ 84 can lead to a further fall toward $ 82. On the upside, resistance is at $ 86.

WTI ($ 80.87) has declined towards $ 80. Inability to hold above $ 80 can see a further dip toward $ 77.

Gold (1933.90) has fallen below 1935-1932. Immediate resistance is seen at 1940. If it sustains below 1940, a further dip to 1900 is possible before a bounce back can happen.

Silver (22.63) tested a low of 22.27 yesterday and has bounced back from there. 22 is a key immediate support. While that holds, a bounce back towards 23-23.50 can be seen.

Copper (3.6715) tested a low of 3.6455 in line with expectations and has bounced back from there. While 3.65-3.64 holds, a bounce back towards 3.80-3.85 looks possible.

Natural Gas (2.6460) has declined sharply from yesterday’s high of 2.8630. This keeps our bearish view intact for a fall towards 2.6-2.5.

7:00 12:30 UK CPI Y/Y
Expn 8.5% …Expected 6.8% …Previous 8.0%

9:00 14:30 EU GDP
Expn – …Expected 0.3% …Previous 0.3%

9:00 14:30 EU Ind Prodn (MoM)
Expn 1.5% …Expected 0.1% …Previous 0.2%

12:30 18:00 US Housing Starts
Expn 1674K …Expected 1450K …Previous 1434K

13:15 18:45 US Industrial Production
Expn 0.1% …Expected 0.3% …Previous -0.6%

13:15 18:45 US Capacity Utilization
Expn 78.7% …Expected 79.1% …Previous 78.9%

DATA YESTERDAY:
—————–
23:50 5:20 JP GDP
Expn – …Expected 0.70% …Previous 0.70%

6:00 11:30 UK Unemp
Expn 4.1% …Expected 4.0% …Previous 4.0%

12:30 18:00 US Retail Sales (MoM)
Expn -0.1% …Expected 0.4% …Previous 0.2%

12:30 18:00 CA Inflation Y/Y
Expn 3.4% …Expected – …Previous 2.8%

20:00 1:30 US TICS (Net foreign purch of long-term Sec)
Expn – …Expected – …Previous 25.8