Dollar strengthened on Friday post US NFP data which came out much higher against a dip expected by the markets. Major currencies have correspondingly fallen against the Dollar. The Dollar Index is at crucial levels and needs to break past 104 to test 105 else can dip back within the 104-103 range. Accordingly, the Euro, Aussie, Pound, EURJPY, USDJPY, USDCNY may sustain or break their respective levels of 1.0750/1.07, 0.65/64, 1.26, 160.65/80, 149, 7.20. EURINR may fall to 89/88 before rising back to 90+ levels while USDINR can rise to 83.00-83.10 while above support at 82.80/75

Dollar Index (104.07) rose sharply on Friday from day’s low of 102.90 to an intra-day high of 104.04 as the US NFP data came out much higher at 353k against market expectations of seeing a decline to 187k against Dec-23 release of 333k. Having tested the upper end of the 102.50-104 range, it would now be crucial to watch if the index manages to rise and sustain past 104 in the next few sessions which if seen can take it higher to next resistance level near 105 (seen on the 3-day candle chart)

EURUSD (1.0778) fell sharply post the US NFP data release as Dollar Index rose sharply. If the Dollar index continues to rise past 104 as mentioned above, Euro can decline to 1.0750-1.0700 which is the next important support zone from where a bounce back could be soon possible.

EURJPY (160.02) has risen sharply over the past 2-sessions from 158 to 160.26 and could move up a bit more towards 160.65-160.80 before declining back towards 158 again. Immediate range of 161-158 can hold for the near term.

Dollar-Yen (148.47) has also risen sharply on Friday along with the rise in the Dollar Index and attempting to test 148.60. Note that a break above 149 if seen can take the pair to 150 before a decent decline is seen in the medium term back towards 146. Immediate upside is likely to be limited between 149-150.

USDCNY (7.1965) has risen well as expected and needs to break above 7.20 to move up further towards 7.22/24. Immediate support is visible near 7.16/17.

Aussie (0.6501) declined sharply after testing 0.6610 on Friday. There could be a fall to support at 0.64 before it rises back towards 0.66 again in the medium term.

Pound (1.2603) has also faced a similar decline from 1.2772 as the Dollar strengthened. A strong breakout on either side of the 1.26-1.28 range is needed for Pound to give clarity on further direction else the said range may continue to hold if the price bounces from 1.26.

USDINR (82.9225) tested 82.82 on Friday before closing at 82.9225. A rise to 83-83.10 is possible while above interim support at 82.75/80.

EURINR (89.4632) fell sharply with the Euro. We may expect a dip to 89-88 before medium term rise towards 90 or higher is seen by mid-Feb’24.

The US Treasury yields have risen back sharply after the US jobs report on Friday. The US non-farm payroll increased 333K as against the market expectation for a rise of 187K. It is important to see if the bounce in the yields are sustaining or not. Overall it is a wait and watch situation now. The German yields have also risen but the resistances can cap the upside. The overall view is bearish, and the yields can come down again. The 10Yr and 5Yr GoI have bounced back but have resistances ahead. Failure to breach that resistance can continue to keep them under pressure for more fall.

The US 10Yr (4.08%%) and the 30Yr (4.26%) yields have risen back sharply. While this sustains, a rise to 4.15%-4.2% (10Yr) and 4.35%-4.4% (30Yr) can be seen. That will reduce the chances of the fall to 3.8% (10Yr) and 4.1%-4% (30Yr) that we have been expecting.

The German 10Yr (2.24%) and the 30Yr (2.44%) yields have risen back. But the trend is down. While below 2.35% (10Yr) and 2.5%-2.6% (30Yr) the yields are likely to fall to 2% (10Yr) and 2.2%-2.1% (30Yr).

The 10Yr GoI (7.0555%) has bounced back from the low of 7.02%. Immediate resistance is at 7.06%. Above the 7.10%-7.12% will be higher resistance while below which the view is bearish to see 6.9% and even 6.8% on the downside.

The 5Yr GOI (6.9698%) has bounced from around 6.94%. A strong rise above 7% can take it up to 7.1% and will reduce the downside pressure. It is a wait and watch.

Dow Jones has risen, breaking above 38500. This now has opened doors toward its next crucial resistance from where a correction can be possible. DAX is stuck in a narrow range but has scope to see a break on the upside. Nifty has come down sharply from a high of 22127 on Last friday and may dip further towards its immediate support. Nikkei looks likely to break its sideways range on the upside to target its key resistance at 37000. Shanghai sell off continues and has room to fall further in the near term.

Dow (38654.42, +0.35%) has risen well above 38550. While this sustains, the outlook is bullish to see 39000-39300 in the near-term. But we will have to watch this rise with caution as a sharp correction could be possible after that.

DAX (16918.21, +0.35%) is stuck between 16800 and 17000. There is room to test 17500 on a break above 17000 before a reversal is seen.

Nifty (21853.80, +0.72%) has come-off from the high of 22127. While below 22000, a dip to 21600-21500 can be seen in the near-term. Broadly 21000-22150 (changed from 21000-22000) can be the trading range for some time.

Nikkei (36400.50, +067%) has come closer towards the upper end of the 35500-36500 range. It looks likely to break above 36500 and rise towards 37000.

Shanghai (2662.13, -2.45%) continues to fall and has even broken below 2700. View remains bearish for a fall towards 2600 or maybe lower.

Stronger than expected US NFP data has lead to a fall in most of the commodities. Brent has broken sharply below the mentioned support contrary to our view to see a short corrective bounce from there and now looks vulnerable to come down further towards its next key support. WTI looks vulnerable to break below its immediate support of $ 72. Gold and Silver have supports coming up at 2040/2020 and 22.30/22 respectively, while above which, our bullish bias will remain intact. Natural Gas can continues its sideways consolidation for a few more sessions. Copper remains bearish for the near term.

Brent ($ 77.51) has fallen sharply below the support at $ 78. This now opens up chances for a further decline towards $ 75-73.

WTI ($ 72.40) has come down towards $ 72 as expected. It looks likely to break below $ 72 and fall towards $ 70-68.

Gold (2052.80) has dipped but remains range bound within 2080-2040. Supports are at 2040-2020. While above these, chances of a break above 2080 and rise towards 2100 will remain intact.

Silver (22.68) has fallen back sharply towards 22.50. Key supports are at 22.30-22.00. While above 22, chances of a rise towards 23.50-24.00 will remain there.

Copper (3.8275) has come down towards 3.80 as expected. It can come down further to 3.75.

Natural Gas (2.08) remains consolidative within 2.0-2.2. As long as it holds above 2.0, there is potential for a break on the upside and rise towards 2.3-2.5.

0:30 06:00 Australia Trade Balance
Expn – …Expected – …Previous 11.4A$ Bln

5:00 10:30 IN Services PMI
Expn 58.4 …Expected – …Previous 59.0

DATA FRIDAY
—————
1:30 07:00 AU PPI
Expn – …Expected 1.9% …Previous 1.8% …Actual 0.9%

13:30 19:00 US NFP
Expn 231K …Expected 187K …Previous 333K …Actual 353K

13:30 19:00 US Unemployment Rate
Expn 3.6% …Expected 3.8% …Previous 3.7% …Actual 3.7%

13:30 19:00 US Avg Hrly Earnings
Expn 0.3 …Expected 0.3 …Previous 0.4 …Actual 0.6

13:30 19:00 US Average Hourly Earnings Production & Non Supervisory Employees
Expn 0.2 …Expected – …Previous 0.4 …Actual 0.4