Markets showed some volatility before and after the release of the US GDP yesterday which was revised down to 3.17% for Q4 2023 from 3.24% earlier. Dollar Index and Euro remained within the 103.50-104.50 and 1.0775-1.09 range while USDJPY declined sharply below 150 pulling down EURJPY also towards 162, faster than expected. USDCNY has dipped towards 7.19 while Aussie and Pound have recovered after showing a decent fall earlier yesterday. USDINR has moved up a bit above 82.90 but upside is likely to be capped at 83. EURINR could trade within 89-90 for the near term. Focus for today would shift towards US PCE inflation from where markets would try to gauge the next move that could come in from FED.

Dollar Index (103.865) rose to 104.24 yesterday but dipped back below 104, maintaining the expected range of 103.50-104.50 for the near term.

EURUSD (1.0834) also tested 1.0796 yesterday but moved higher thereafter. Immediate support is seen near 1.0775 and near term upside is likely to be restricted to 1.09-1.0950.

EURJPY (162.33) could not bounce back and sustain above 163 and hence is falling towards 162 faster than expected. It would be crucial to see if the pair pauses at 162 else could extend towards 161-160 in the coming days.

Dollar-Yen (149.85) finally fell, holding below 151 as expected. A dip to 149/148 could be on the cards for the near term.

USDCNY (7.1934) has dipped slightly towards 7.19. It has to be seen if the dip would continue further from here.

Aussie (0.6512) made a low of 0.6489, slightly higher than our anticipated level of 0.6450 during the day before rising back. While the rise sustains, it could now reattempt to rise back towards 0.66 in the coming sessions.

Pound (1.2668) tested 1.2621 yesterday but has bounced back within the immediate range of 1.26-1.2730. The range may hold for a few more sessions before a breakout is seen on either side.

USDINR (82.9275) moved up to 82.95 yesterday. Resistance is at 83.00. While that holds, we can expect a range of 83.00-82.80/75 to hold for the near term.

EURINR (89.8290) tested our mentioned target of 89.50 on the downside before recovering a bit from there. Overall, the outlook continues to remain bearish towards 89.00 until a sharp rise past 90-90.25 is seen.

The US Treasury yields are oscillating up and down over the last few days. The broader view remains the same. The yields can rise in the short-term while they sustain above their supports and then reverse lower later. The US PCE data release today will be important to watch. The German yields remain stable and higher. There is room to rise more from here before a reversal is seen. The 10Yr and 5Yr GoI remains stuck within their narrow range. The bias is negative to break the range on the downside and fall going forward.

The US 10Yr (4.26%) and the 30Yr (4.40%) yields have dipped again. While above 4.2%, the 10Yr can rise to 4.4%-4.6%. The 30Yr can rise to 4.6% (30Yr) while above 4.3%.

The German 10Yr (2.46%) and the 30Yr (2.59%) yields remain stable. View remains the same. The 10Yr can rise to 2.6% while above 2.35%. The 30Yr can move up to 2.7%-2.8% on a break above 2.6%.

The 10Yr GoI (7.0663%) and the 5Yr GOI (7.0441%) continue to remain stable. The 10Yr can fall to 7%-6.95% and 6.9%-6.8% on a break below 7.05%. For now, 7.05%-7.15% can be the broad trading range. The 5Yr oscillates between 7.04% and 7.08% now and can fall to 7% while below 7.1%.

Dow Jones recovered from its fall to 38742 but outlook will remain bearish while below the key resistance at 39300. DAX continues to move up within its crucial 17500-17700 resistance zone but we have to remain cautious rather than being bullish as it could fall back anytime. Nifty has declined sharply but has support coming up at 21800. Need to see if that holds and produces a bounce back or not. Nikkei is drifting lower and may come down towards 38000. Shanghai looks mixed and is likely to trade within 2900-3050 for a while.

Dow (38949.02, -0.06%) fell to a low of 38741.68 and bounced back. A strong rise above 39000 will be needed to negate the fall to 38500 mentioned earlier. As mentioned yesterday, a break below 38500 will confirm the beginning of the correction.

DAX (17601.22, +0.25%) continues to move up within its crucial 17500-17700 resistance zone. We prefer to remain cautious rather than being bullish at the moment. DAX can reverse lower anytime and fall back to 17200-17000 and even lower.

Nifty (21951.15, -1.11%) has declined below 22000. A break below 21800 can drag it down to 21500 and even 21000. That in turn will negate the rise to 22500.

Nikkei (38923.50, -0.64%) is attempting to break below 39000. This has reduced the chances of seeing a rise towards 40000-40500. It may come down towards 38000 now.

Shanghai (2990.02, +1.09%) rose 3031.48 yesterday before coming off to 2944 today but has again moved up towards 3000. Support is near 2900. While that holds, a broad range of 2900-3050 can hold for a while. The rise to 3050-3080 mentioned yesterday may or may not happen.

Brent and WTI are likely to remain ranged for a while. Gold can fall while below the resistance at 2050-2055. Copper and Silver to trade sideways while above 3.80 and 22 for some time. Natural Gas is heading up towards its resistance as expected which might halt the current rally.

Brent ($ 82.10) has come down from a high of $ 83.13. Upside could remain capped at $ 84-85. A range $ 85-80 can hold for some time.

WTI ($ 78.43) tested a high of $ 79.59 yesterday and has fallen back from there. The resistance at $ 80 is holding well. We expect a narrow range of $ 80-75 to hold for some time.

Gold (2043.90) continues to hover below 2050-2055. While below these resistance, it may come down towards 2020. We expect a broad range of 2060-2000 to hold for a while.

Silver (22.68) has moved up towards 22.80 contrary to our view to see a fall towards 22. Immediate outlook is mixed. Overall the broad sideways range of 22-23.50 remains intact.

Copper (3.8225) has managed to hold above 3.80. A sideways trade within 3.80-3.90 can be seen for some time before a fall can happen towards 3.75-3.70.

Natural Gas (1.86) is heading up towards 2.0-2.1 in line with expectations. If 2.0-2.1 holds, a fall back towards 1.8-1.7 can be seen.

5:45 11:15 CH GDP
Expn – …Expected 0.2% …Previous 0.3%

12:00 17:30 IN GDP
Expn 6.5% …Expected – …Previous 7.6%

13:30 19:00 US Personal Income
Expn 0.6% …Expected 0.4% …Previous 0.3%

13:30 19:00 US Core PCE Price Index M/M
Expn 0.3% …Expected 0.4% …Previous 0.2%

13:30 19:00 US PCE
Expn 0.2% …Expected 0.3% …Previous 0.2%

13:30 19:00 CA GDP
Expn – …Expected 0.2% …Previous 0.2%

DATA YESTERDAY
—————
10:00 15:30 EU Biz Climate
Expn 98.2 …Expected 96.6 …Previous 96.2 …Actual 95.4

13:30 19:00 US GDP
Expn – …Expected 3.3% …Previous 3.2% …Actual 3.2%