Dollar Index, USDJPY and EURJPY have to rise past 104.50, 158 and 172 to establish near term bullishness or else they could fall back. USDCNY can soon test 7.28 in the near term before topping out. Aussie and Pound have declined a bit and any break below current levels, if seen, can take it further down towards 0.66 and 1.28 respectively. USDINR has scope to rise towards 83.70/75. EURUSD and EURINR have near term support, while above which, a rise back towards 1.0950/1.10 and 92 respectively could be seen.

Dollar Index (104.29) continues to remain stable above 104, but still a strong rise past 104.50 will be needed to establish near term bullishness. A big news came from the US yesterday of the Current US President Joe Biden stepping down from contesting Elections. Need to see as to how markets react to the news. Watch the price action closely around current levels. Any break below 104 can drag it towards 103 or even lower in the coming sessions.

EURUSD (1.0892) is currently trading above its immediate support at 1.0870/0850. Only a decisive break below these levels, if seen, can extend its fall further towards 1.08. Else can bounce back in the next few sessions towards 1.0950/1.10. However, we are not looking for a break above 1.10 in Euro within the current movement.

Dollar-Yen (157.54) and EURJPY (171.60) has been moving within a narrow region of 157-158 and 171-172 respectively. The pairs needs to break on the upper end of the range to head towards 159 and 173 initially in the near term. Else could fall back towards 156-155 and 170.

USDCNY (7.2713) is been trading higher within its range of 7.25/24-7.28. We expect the pair to soon test 7.28 on the upside. Thereafter, if the resistance holds, a corrective fall back towards the lower end of the range could be witnessed in the medium term.

Aussie (0.6674) and Pound (1.2924) continues to trade below 0.67 and 1.30 respectively. An immediate support can be seen in Aussie around current levels which needs to hold to rise back towards previous levels, else further break below current levels in Aussie could make it vulnerable to test 0.66 on the downside. Similarly, Pound can also move towards the lower end of its 1.30-1.28 range in the near term.

USDINR (83.6675) continues to trade higher on the offshore markets. Need to see if there is any impact of the US President Joe Biden stepping down in our markets. For the entire week, we are keeping our view intact to see a rise towards 83.75 and thereby a revised range of 83.50-83.75 to hold for some time.

EURINR (91.1425) has support at 91.00-90.75. While that holds, chances of rise towards 92 is possible. Only a break lower, if seen, can drag it down to 90.50-90.00.

The US Treasury yields have risen back above their key supports. A strong follow-through rise from here can take them higher this week. Need to wait and watch. The German yields are rising well from their key supports. That keeps intact our broader bullish view. The yields can rise further in the coming days. The 10Yr and 5Yr GoI remain lower and are looking vulnerable to fall more from here.

The US 10Yr (4.22%) and the 30Yr (4.42%) yields have risen back above 4.2% and 4.4% respectively. A strong follow-through rise from here can take them up to 4.3%-4.35% (10Yr) and 4.5%-4.55% (30Yr) this week. That will reduce the danger of the fall to 4.1% (10Yr) and 4.3% (30Yr).

The German 10Yr (2.46%) and the 30Yr (2.66%) yields have risen further. The support at 2.4% (10Yr) and 2.6% (30Yr) has held very well last week and that keeps intact our bullish view of seeing 2.8% (10Yr) and 3% (30Yr) on the upside.

The 10Yr GoI (6.9641%) is stuck between 6.96% and 6.98%. While below 6.98%, the yield can test 6.94% on the downside and then possibly rise back. In case 6.94% is broken then 6.9% can be seen on the downside.

The 5Yr GoI (6.9058%) remains lower. It looks vulnerable to break 6.9% and fall to 6.8%.

Major stock indices have fallen due to worldwide disruptions caused by Microsoft outage. Dow Jones, DAX, Nikkei and Nifty have all crucial supports below current level, which needs to hold to avoid the danger of falling further. Shanghai to trade sideways between 2900-3000 for a while.

Dow (40287.53, -0.93%) fell for the second consecutive week. It has to hold above 40200 and rise back to keep the bullish view intact of seeing 42000 on the upside. Else, a fall to 39500 is possible.

DAX (18171.93, -1%) has come down into the 18200-18100 region as expected. 18000 is a crucial support which if broken can drag it down to 17800-17500. That in turn will negate the rise to 18500-18600 that we have been expecting.

Nifty (24530.90, -1.09%) has come down sharply on Friday. It has to sustain above 24500 to move up towards 25000-25150. Else a fall to 24000 can be seen.

Nikkei (39667.50, -1.06%) is heading down towards its crucial support at 39000. While that holds, a bounce back towards 40000-41000 can be seen. In case a decisive break below 39000, if seen, would be vulnerable for a further fall to 38000.

Shanghai (2964.29, -0.60%) remains mixed. A sideways trade between 2900-3000 can be seen for a while.

Crude prices have fallen sharply and looks vulnerable to fall further from here. Gold and Silver remains bearish. Copper can test its immediate support. Need to see if that holds and produce a bounce back or not. Natural gas outlook remains bullish while above 2.00.

Brent ($ 82.99) fell sharply to $ 82.56, breaking below the lower end of the $ 87-83 range last Friday. It may fall further towards $ 80 while it remains below $ 84-85.

WTI ($ 77.84) has fallen sharply, breaking below the lower end of the $ 84-79 range. A further fall to $ 75-74 looks possible from here.

Gold (2408) as expected fell to 2396 last Friday and has bounced back a bit from there. A further fall to 2380-2360 cannot be ruled out while it remains below 2440.

Silver (29.30) has fallen sharply breaking below the support at 29.50. It may now come down further to 28.50/30 before a bounce back can happen.

Copper (4.2325) remains lower and can test 4.20-4.15 on the downside. Failure to bounce back from 4.15 could see an extended fall to 4.0.

Natural Gas (2.1660) continues to move up as the support at 2.00 is holding well. A rise towards 2.4-2.5 looks possible in the coming days.

No major data release today.

Data Friday
…………..
23:05 04:35 UK Cons Conf
Expn -14 …Expected -12 …Previous -14 …Actual -13

23:30 05:00 JP CPI
Expn 3.0 …Expected – …Previous 2.9 …Actual 2.9