Most currencies look strong on a weak US Dollar. The Dollar Index fell ahead of the FED Jan24 meeting minutes to be released today. Although the immediate range of 104-105 is holding for now, chances of heading towards 103 also look high in the medium term. Euro could trade within 1.0850-1.07 and can be bullish only on a sustained break above 1.0850, if seen. EURJPY has broken above 162 and could head towards 164 while USDJPY is moving towards the upper end of its 149-151 range. USDCNY can dip to 7.17/16. Aussie could be slightly bullish above 0.6550. Pound can move higher within the 1.25-1.27 range. EURINR could test 90 before pausing. USDINR may attempt to fall to 82.80 on a break below 82.90 on the OTC market today.

Dollar Index (104.00) has bounced well after breaking below the range of 104-105 to 103.79 and is currently back within its previous range. It needs to sustain above 104 to further rise in the near term; else it could be vulnerable to test 103 on the downside.

EURUSD (1.0814) rose past 1.08 to test 1.0839 after a report by ECB mentioned that the wages would remain elevated and could push for a rate cut by the ECB. However, while below 1.0850, we may expect a range of 1.0850-1.08 to hold for the near term. Rise above 1.0850, if seen could trigger a further rise towards upside targets of 1.0950/1.10.

Our less preferred view of seeing a rise past 162 seems to have worked well for the EURJPY (162.17). It could now be bullish towards 164 in the near term.

Dollar-Yen (149.90) fell within the 151-149 range but if the support at 149 holds well, the pair may again attempt to rise back towards 150-151. However, we may not negate chances of a break below 149 in the medium term.

USDCNY (7.1853) has been falling sharply over the last 2-sessions and if the decline continues, we may soon see a test of 7.17/16 before pausing.

Aussie (0.6562) has risen, surpassing our expected 0.655 level. Now, while above it a further rise to 0.66-0.665 could be seen in the coming sessions. The outlook can only turn bearish if a fall below 0.65 is seen again. Aussie seems to be slowly picking up upside momentum.

Pound (1.2630) can rise towards 1.27 while above 1.25-1.2550.

USDINR (82.9675) traded within our expected range of 83.10-82.90 yesterday. Overnight, the NDF rate has fallen further to 82.85 breaking below 82.90. On the OTC markets, if a decline below 82.90 is seen, we may expect 82.80 to be tested.

EURINR (89.6394) has been rising well over the past few sessions and could test 90 on the upside before pausing or moving down again. The immediate range of 90-89 may hold.

The US Treasury and the German yields have dipped slightly. But supports are there. While these supports hold, our view of seeing more rise from here will remain intact before any strong reversal is seen. The 10Yr GoI has come down sharply indicating that the downtrend has resumed. The yield can fall more in line with our expectation. The 5Yr GoI on the other hand is mixed and stuck inside a narrow range.

The US 10Yr (4.29%) and the 30Yr (4.46%) yields have dipped slightly. While above 4.2% (10Yr) and 4.4% (30Yr). we retain our view of the yields going up to 4.4%-4.6% (10Yr) and 4.6%-4.7% (30Yr). Thereafter a reversal is possible.

The German 10Yr (2.37%) and the 30Yr (2.53%) yields have dipped. While above 2.35%, the 10Yr can rise to 2.6%. The 30Yr can rise to 2.7%-2.8% on a break above 2.6%.

The 10Yr GoI (7.0610%) has declined sharply. The downtrend has resumed. A break below 7.05% can accelerate the fall to 7%-6.95% first before targeting 6.9%-6.8% eventually in the coming weeks.

The 5Yr GOI (7.0553%) can fall to 7% on a break below 7.05%. For now, it is stuck in between 7.04% and 7.08%. The broader range of trade is 7%-7.12%.

Dow Jones can remain consolidative within 38000-39000 for a while. DAX is inching lower. Need to see if it manages to hold above its 17000 support or not. Nikkei has fallen back as expected and can head towards 37500-37400. Good rally seen in Nifty and Shanghai. Both the indices looks likely to move up further towards their next key resistance in the near term.

Dow (38563.80, -0.17%) has come down slightly. The near-term outlook is mixed, and it can continue to oscillate between 38000 and 39000.

DAX (17068.43, -0.14%) is managing to hold above 17000 but seems to lack strong follow-through buying. While above 17000, DAX can test 17500. A fall below 17000 can put it back into the 16800-17000 range. We will have to wait and watch.

Nifty (22196.95, +0.34%) continues to move up. As mentioned yesterday, while above 22000, a rise to 22500 is possible first and then a reversal is possible.

Nikkei (38210, -0.40%) has declined below 38400. View is the same to see a fall towards 37500-37400 while below 39000.

Shanghai (2920.41, -0.08%) has risen strongly above 2900. While above 2900, a further rise towards 3000-3030/3050 can be seen. After that we can expect a fall back.

Brent and WTI have declined as expected as the key resistance at $ 84-85 and $ 80 respectively have held well. Gold has scope to test its immediate resistance. Thereafter we need to see if it breaks higher or falls back from there. Copper has bounced back sharply as the support mentioned at 3.80 has held well. Overall outlook is bullish while above 3.80. Silver remains subdued but bias remains positive to see a eventual break on the upside of its 22-23.50 sideways range. Natural Gas has moved up above 1.7 as the support at 1.5 is holding well and has room to rise further in the near term.

Brent ($ 82.61) has declined below $ 83. The resistance at $ 84-85 seems to be holding well. A further dip towards $ 81-80 can be seen. A narrow range of $ 85-80 and a broad range of $ 85-75 can persist for some time.

WTI ($ 77.26) has fallen below $ 78. It can come down further towards $ 75 while it remains below $ 80. A narrow range of $ 80-75 and a broad range of $ 80-70 can hold for some time.

Gold (2036.90) has risen towards 2040 in line with expectations. A test of immediate resistance at 2060 can be seen. Thereafter we need to see if it breaks higher or not. A rise past 2060, if seen, can be further bullish towards 2080-2100. Else it could trade sideways within 2060-2000 for some time.

Silver (23.04) remains subdued. The 22-23.50 sideways range remains intact. Bias is positive to see an eventual break on the upside of the range and rise towards 24-24.50 or even higher towards 25 in the coming days.

Copper (3.8570) has bounced back sharply above 3.85 as the support at 3.80 has held well as expected. While above 3.80, a rise towards 3.90-3.95 looks possible in the near term.

Natural Gas (1.7030) has risen above 1.7 as the support at 1.5 has been holding well. A rise towards 1.9 and then towards 2.0-2.1 is possible in the coming days.

No major data release today.

DATA YESTERDAY
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13:30 19:00 CA Inflation Y/Y
Expn – …Expected 3.3% …Previous 3.4%