Warmest thanks to all our Morning Briefing readers for being with us on this market journey through the year. We wish you all a Happy New Year in advance and may our new year be filled with financial success and delightful surprises! We will resume our Morning Briefing edition on 2nd January 2024. Till then we can keep the markets aside and keep the holiday mood on!

Profit taking across all markets could be seen today being the last trading day of the year before we go on a weekend holiday mood for the New year. The Dollar Index has bounced back from 100.80 suggesting a false break was seen yesterday below 101 while Euro has seen profit taking near 1.1139, not allowing a rise towards our expected 1.12. EURJPY continues to fall within 159–156 region, while USDJPY appears to be stable above 140-141 and may see a short rise to 142/143 soon. The resistance in Aussie at 0.69 seems to be holding well. Pound could not sustain its rise past 1.28 and has also seen some profit taking. USDCNY is near our mentioned target of 7.09. Need to see if it reverses from here of falls lower towards 7.05. USDRUB has plunged sharply and could test 88-87 before pausing. USDINR on the NDF has come down significantly after a higher close on the OTC markets yesterday. We may expect a rise from 83.10 back towards 83.20 or higher today. After testing 92.66 on the upside, EURINR is again retreating towards 92-91.50.

Fall in the Dollar Index (101.157) halted at 100.617 and now the index could be headed towards 101.5-102 in the coming sessions. Our expected bearishness mentioned yesterday has not played out and the index now needs to slowly rise back above 102 to rise further going into first 2-weeks of Jan-24.

Contrary to our expectation of seeing a reversal from 1.12, the EURUSD (1.1071) saw profit taking and limited the rise to 1.1139 giving signs of a possible false break yesterday as the price has moved down below 1.11 again. We could expect some muted action in the first week of Jan-24 possibly within 1.10-1.11 region.

EURJPY (156.59) has dipped within the range of 159-156 and it may persist for some more time.

Dollar-Yen (141.42) fell to 140.25 before rising back sharply from there, in line with the movement seen in the Dollar Index. While above 140-141, we may expect a rise to 142/143 in the coming sessions.

USDCNY (7.0960) has fallen towards our expected 7.10/09. An immediate bounce from current level is needed to see a rise back towards 7.12/15 else we may have to look for target of 7.05/7.00 on a sustained break below 7.09. Watch the price action at 7.09/7.0850.

Resistance at 0.69 seems to be holding well for Aussie (0.6835) as it tested 0.6871 before coming down from there. Below 0.69, view remains bearish to see a fall towards 0.68-0.6750 in the medium term.

Pound (1.2736) failed to sustain its rise above 1.28 and has started coming off. Going ahead, it may fall to 1.27 or lower. Crucial resistance is seen at 1.29 which can hold for the medium term.

USDRUB (88.4683) has fallen sharply below our mentioned range of 94-89 and could possibly be headed towards 88-87 from where reversal could be seen towards 90 again in the medium term.

USDINR (83.27) on the NDF markets fell even below our expected level of 83.20, quoting 83.12/13 just now. Profit taking in equities looks highly possible across the globe being the last trading day of the year before the markets go on weekend holiday for the new year. Profit taking in Indian equities could keep USDINR above 83.10 today possibly leading to a rise back towards 83.20 or higher.

EURINR (92.0607) started to come off after testing 92.66 on the upside and could be headed towards 92-91.50 in the coming sessions. A near term range of 91.50-92.50 may hold for a while.

The US Treasury and the German yields have bounced back. There could be a corrective rise in the near-term. However, strong resistances are there which can cap the upside and keep the overall downtrend intact. The 10Yr and 5Yr GoI have been moving up over the last few days. There is room to rise further before the overall downtrend resumes.

The US 10Yr (3.84%) and the 30Yr (3.99%) yields- have bounced slightly. Resistances at 4% (10Yr) and 4.15%-4.2% (30Yr) can be tested but they can cap the upside and keep the downtrend intact for an eventual fall to 3.6% (10Yr) and 3.8% (30Yr) in the coming weeks.

The German 10Yr (1.94%%) and the 30Yr (2.17%) yields have bounced back again. 2%-2.2%(10Yr) and 2.2%-2.4% (30Yr) are key resistances that can be tested in the coming days. But the broader view is bearish to see 1.8%-1.7% (10Yr) and 1.9% (30Yr) on the downside.

The 10Yr GoI (7.2111%) can test 7.24% and then resume the downtrend targeting 7.1% on the downside.

Similarly, the 5Yr GOI (7.1232%) can test 7.16%-7.18% before falling back again towards 7%-6.95%.

Dow Jones and Nifty have scope to test their key resistance before a corrective fall can happen. DAX and Nikkei appears ranged. Shanghai is bullish for a rise towards 3000.

Dow (37710.10, +0.14%) can test 38000. But thereafter a corrective fall to 37000-36500 is possible.

DAX (16701.55, -0.24%) is stuck and is consolidating between 16600 and 16800 within its overall uptrend. This consolidation can continue for some more time.

Nifty (21778.70, +0.57%) has risen above 21700. An extended rise to 22000-22200 cannot be ruled out. But be cautious to get a corrective fall to 21000-20000 and even lower going forward.

Nikkei (33471.50, -0.20%) can remain ranged within 33800/34000-33000 for the near term.

Shanghai (2965, +0.35%) has risen above 2950. While above 2950, a rise towards 3000 can be seen.

Crude prices are falling on bumpy year end markets. Tensions surrounding Red Sea shipping, decline in US barrel counts reported by EIA on Thursday and the announcement of Angola leaving OPEC have all pulled down the crude prices. Gold has declined as the resistance at 2100 has held well. Silver has declined towards the lower end of the range. Need to see if it breaks below the lower end of the range or not. Copper is back into its 3.95-3.85 range. Natural Gas looks mixed.

Brent ($ 77.44) has declined sharply below the support at $ 78. It can trade within $ 81-$ 72 for a while with a bearish to see a fall towards the lower end of the range. But broder outlook will remain bullish for a rise towards $ 84-85 while it remains above $ 72-70.

WTI ($ 72.04) is attempting to break below the support at $ 72. We can expect it to trade within $ 76-68 for some time with bearish view for the near term. But broder outlook still remains intact for a rise towards $ 78-80 while above the support at $ 66-65.

Gold (2077.70) has dipped below 2080 as the resistance at 2100 has held well. While below 2100, view is bearish for a fall towards 2040.

Silver (24.05) has fallen back towards the lower end of the 25.00-24.00 range. Failure to hold above 24 can trigger a fall towards 23.50-23.30. That may negate the chance of seeing a rise towards 25.30-25.50.

Copper (3.9215) has declined towards 3.90 contrary to our view to see a test of 4.00. This has bring back the 3.95-3.85 range in place again. Our overall bias will remain bullish for a rise towards 4.00 as long as it holds above 3.85. Thereafter we have to watch if it falls back towards 3.90-3.88 or breaks further higher.

Natural Gas (2.5350) looks mixed. We will wait for a breakout of 2.60-2.30 range to determine its next move.

No major data release today.

DATA YESTERDAY
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10:00 15:30 EU Biz Climate
Expn – …Expected – …Previous 93.8