The Dollar Index extended the fall to the low of 105.85 but has recovered from there and now has a scope to bounce back towards 108-110 in the medium term. Euro and EURINR below 1.06 and 89.50, look bearish in the medium term. Aussie and Pound have gained strength but still, a decisive break past 0.655 and 0.67 will be needed to become further bullish. USDCNY has declined below 7.25 and now needs to see whether it rises back past 7.25 again or extends the fall towards 7.20 in the coming sessions. The Dollar Yen has slipped below 155-152 region but while above current levels, can attempt to rise back within the mentioned range. EURJPY is coming off in line with our view and can soon test 158-156, while below 164/162. USDINR has bounced well as anticipated and is likely to remain ranged between 84.20-84.50 in the near term.

The data releases from yesterday, especially US PCE inflation data which matched expectations at 0.2% led the markets to speculate little change in the Federal Reserve’s interest rate outlook. Dollar Index (106.186) extended the fall to the low of 105.85 before recovering back to the current levels. Interim support is coming around 105.75, above which we retain our view of seeing a rise towards 108-110 in the coming weeks.

The EURUSD (1.0484) strengthened significantly to the high of 105.875 before cooling down. Still, while it trades below 1.06, our preferred view remains bearish towards 1.04 initially. Thereafter a break lower can trigger a further decline towards 1.03-1.02 in the coming weeks.

Dollar-Yen (151.47) slipped below our mentioned range of 155-152 and tested 150.455 on the downside. While above current levels, there is still some scope to see a rise back within the range of 152-155. At the same time, we need to be cautious for any sudden break below 150 as it can keep the pair bearish for a while.

EURJPY (159.88) has been gradually moving lower. Below resistances at 162 and 164, our bearish view remains intact to see a fall towards 158 or even 156 in the near term.

USDCNY (7.2431) failed to sustain above 7.25 as feared and started coming off from the high of 7.2579 itself. If the Dollar Index strengthens as anticipated then there could be some scope to see a raise past 7.25 again. Else, we can witness a corrective fall towards 7.20/18.

Aussie (0.6470) needs to see a rise past its channel resistance near 0.655 to become further bullish towards 0.67. Else, while below 0.655 the pair can either remain ranged within 0.640-0.655 region or can extend the fall towards 0.635.

Pound (1.2666) rose significantly to the high of 1.2694 before declining a bit from there. The pair, on a confirmed rise past 1.27, can extend the ongoing rise to 1.2750 but whether it will happen or not is uncertain. On the downside, the interim support at 1.2450 can hold for now.

USDINR (84.4130) moved up further near the upper end of the range of 84.20-84.50 yesterday. But while the resistance at 84.50 holds, we anticipate the range of 84.50-84.20 to remain intact in the near term.

In EURINR (89.1291) we had mentioned that the upside could be capped at 89.50 and so far a high of 89.3541 has been witnessed. For now, we are retaining our view of seeing a fall toward 88 (assuming a fall in the Euro towards 1.04) or lower while the cross trades below 89.50.

The US Treasury yields continue to fall and are keeping intact our bearish view. The yields have room to fall and test their support. The price action around the support will need a close watch to see if a bounce is happening or not. The US PCE data release came in line with market expectation at 2.3% (YoY) for November, up from 2.1% (for October) The German yields remain weak and are coming down as expected. View remains bearish to see more fall. The 10Yr GoI can dip in the near-term before going up towards the upper end of its range. The broader picture remains bullish to break the range and rise.

The US 10Yr (4.26%) and 30Yr (4.44%) yields continue to fall. The bearish view is intact to see 4.2% (10Yr) and 4.4% (30Yr) on the downside. The price action thereafter will need a close watch to see if a bounce is happening or not.

The German 10Yr (2.16%) and the 30Yr (2.36%) yields have come down further. The yields are coming down towards 2% (10Yr) and 2.2% (30Yr) in line with our expectation. Resistances are at .3% (10Yr) and 2.5% (30Yr).

The 10Yr GoI (6.8406%) have dipped. A test of 6.83% looks likely before a rise back to 6.88%-6.9% happens. The chances of the downside extending up to 6.8% have to be seen. Big picture remains bullish to see 7% while above 6.8%.

The Dow Jones tested the key resistance at 45000, briefly rising to 45003 before closing lower. Below 45000, a decline towards 43000 and eventually towards 42000-41000 is anticipated. DAX continues to trade weaker, with strong support in the 19000–18800 region likely to push the index towards 20000. Nifty is holding above 24000 but continues to show weakness in its attempt to rise past 24400. A sustained rise beyond 24400 is essential to extend gains towards 24500–24700 else can drag it lower to 23800. The Nikkei reversed from a low of 37801.62 and is now trading above the 38200 mark, supported by the critical level of 37700. It could retest 38500-39500 if it continues to rise. The Shanghai Composite hovers above the interim resistance of 3300 and could rise towards 3350–3400. However, failure to hold above 3300 could lead to declines towards 3250 or even 3150, consistent with earlier projections.

The Dow (44722.06, -0.31%) has come down as expected after testing 45000. While 45000 holds, the Dow can fall to 43000 initially and then to 42000-41000 eventually. As mentioned yesterday, a sustained rise above 45000 is needed for the view to go wrong.

DAX (19261.75, -0.18%) remains lower. There are chances for a dip to 19000-18800. But while above 18800 the bias is positive to break 19600 and rise to 20000.

Nifty (24274.90, 0.33%) is still stuck inside the 24000-24400 range. A range breakout will decide whether Nifty can rise to 24500-24700 or will fall to 23800.

Nikkei (38295.08, +0.42%) tested support at 37700 before rebounding above 38200. The index is expected to trade within the range of 37700–39500 in the near term. A decisive break below 37700, if seen, could trigger a deeper decline towards 35000.

Shanghai (3307.8762, -0.08%) is trading above the key resistance level of 3300. Sustaining above this interim resistance could pave the way for a rise towards 3350–3400. Conversely, a decline below 3300 could bring the index down to its support at 3250. A breach of this support would likely trigger a deeper fall towards 3150.

Crude prices can fall to their immediate support levels before a bounce back is seen in upcoming weeks. Gold and Silver hold above their immediate support levels and can rise towards 2700 and 31.5 respectively in the near term. Copper has risen but can range between 4.20-4.05. Natural Gas has fallen sharply but if the immediate support at 3.1 holds a rise towards 3.4-3.5 can be seen in the near term.

Brent ($ 72.79) is holding above 72. A fall to its downside support at 71 looks likely for the near term. Thereafter it can eventually rise towards 76-77.

WTI ($ 68.69) has dipped slightly and can decline further to test 67 before a rise to 70-72 takes place.

Gold ($ 2651.50) has risen to 2650 as expected. It can rise further to 2700 in the near term.

Silver (30.29) hovers above its immediate support at 30 and can rise towards 31.0-31.5 while the support holds.

Copper (4.1505) has opened above 4.14 from yesterday’s close of 4.06. It needs to surpass 4.2 to see higher levels of 4.3-4.4 else can remain ranged between 4.2-4.05.

Natural Gas (3.1960) has fallen sharply after weekly nat-gas inventories fell to levels lower than expected. The EIA reported that nat-gas inventories fell by -2 bcf, a smaller draw than expectations of -3 bcf. Immediate support is near 3.15-3.10 above which a rise to 3.4-3.5 is still possible in the upcoming weeks.

10:00 15:30 EU Biz Climate
… Exp 95.5 … Expected – … Previous 95.6

DATA YESTERDAY:-
—————
13:30 19:00 US Personal Income
… Exp 0.1% … Expected 0.3% … Previous 0.3% …Actual 0.6%

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

13:30 19:00 US PCE
… Exp 0.0 … Expected – … Previous 0.2 …Actual 0.2%

13:30 19:00 US Durable Goods Orders
… Exp -0.5% … Expected 0.4% … Previous -0.4% …Actual 0.2%

13:30 19:00 US GDP
… Exp – … Expected 1.8% … Previous 2.8% …Actual 2.8%