The Dollar Index can bounce back towards 107-108 while above 105.50. Euro has a bullish bias above 1.0550-1.0500. Markets await the ECB policy meeting on Thursday. A break past 1.0650 can take it higher to 1.0750 eventually. EURINR can remain ranged within 90-88 for now. Aussie has slipped below 0.64 and can get extended to 0.6350-0.6300 in the coming sessions while Pound needs to see a strong break past 1.2750 to head towards 1.28-1.30, else can continue to fall within its range of 1.2770-1.2450. USDCNY has bounced well and while above 7.25, we are retaining our view of seeing a rise towards 7.30-7.35 in the near term. USDJPY can attempt to rise towards 152-154. EURJPY remains bullish towards 162-163, while above 156. USDINR on the NDF is trading lower. For the current week, a range of 84.65/60-84.85 is projected to hold.

Higher US Unemployment release at 4.2% (4.1%) and US NFP at 227k (36k expected) led Dollar Index (106.036) to initially fall to 105.42 before rising back on Friday. The index will have to decisively break below 105.50 to turn further bearish in the near term. Else, while the support holds, it can attempt to rise back towards 107-108. Watch price action closely around 105.50 to see whether it holds or not.

EURUSD (1.0553) rose sharply to 1.0629 on Friday but could not sustain and started coming off. While above the Support region of 1.0550-0500, bias is bullish for the near term but it needs a break above 1.0650 in order to reach the bullish potential of 1.0700-0750. There could be some volatility at the end of the week as the ECB policy meeting is scheduled for Thursday.

EURINR (89.3591) tested 89.8761 in line with our view of seeing a rise towards 90 but could not sustain. Overall, the range of 90-88 can persist for a while.

Dollar-Yen (149.97) needs to sustain below 150 to become bearish towards 148-145 in the coming sessions, else it can attempt to rise back towards 152-154, wherein its old range of 150-155 can then hold for some time. Watch price action near current levels.

EURJPY (158.21) exceeded our initial target of 159 a bit to the high of 159.57 but could not sustain and started to decline. Still, while the support at 156 holds, a rise to 160-162/63 looks likely in the near term.

USDCNY (7.2759) has bounced well from the low of 7.2526 and while it sustains above 7.27, it can head towards 7.30 or 7.35 in the near term. Overall, the view remains bullish above 7.25 for now.

Aussie (0.6395) has slipped below 0.64 and can extend to the next immediate support around 0.6350-0.6300. Thereafter, while it holds, the pair can bounce back again in the near term. A fall below 0.63 is not anticipated for now.

Pound (1.2738) witnessed a high of 1.2811 as expected but failed to hold the rise and is currently back within its earlier range of 1.2450-1.2750/70. Only a sustained rise past 1.2750 can bring 1.28-1.30 back into the picture. Else, it can continue to fall back within its range of 1.2770-1.2450 in the coming sessions

USDINR (84.6640) on the NDF, is trading slightly lower at 84.66 compared to Friday’s onshore closing at 84.6925. We might witness a lower opening in the onshore markets as well. For the current week, a range of 84.65/60-84.85 is anticipated to hold.

The US Treasury yields have declined after the jobs data on Friday. There is room to fall further to test their support first before a rise back happens again. The US NFP increased by 227K and the Unemployment rate rose to 4.2% (from 4.1%) in November. The German yields remain stable. There is limited room on the downside. We expect the yields to sustain above their immediate support and rise in the coming days. The 10Yr GoI has risen sharply after the RBI policy meeting outcome on Friday. A strong rise above the immediate resistance is needed to take the yield higher. Else it can fall back again. We will have to wait and watch. The RBI left the repo rate unchanged at 6.5%. However, the central bank cut the CRR by 50 bps from 4.5% to 4%. This cut will be implemented in two phases (25bps each).

The US 10Yr (4.14%) and 30Yr (4.33%) have come down. Looks like a fall to 4% (10Yr) and 4.2% (30Yr) can happen first before a reversal happens which can take it up to 4.4%-4.5% (10Yr) and 4.65%-4.7% (30Yr).

The German 10Yr (2.10%) and the 30Yr (2.30%) yields remain stable. Support at 2% (10Yr) and 2.2% (30Yr) can limit the downside from here. While above these support the yields can rise to 2.3% (10Yr) and 2.5% (30Yr) in the coming weeks.

The 10Yr GoI (6.7830%) has risen sharply from a low of 6.7027%. A rise above 6.8% form here can take the yield up to 6.85%-6.9% again. Else it can still come down again to 6.7%-6.65%.

The Dow Jones continues to trend lower, with a break below 44500 likely to accelerate the decline toward 43000. DAX rose to a high of 20425 before closing just below 20400. Caution is advised in the 20500-21000 zone, where a potential reversal could emerge. Nifty traded flat and closed slightly lower. A sustained rise above 24800 would pave the way for further gains toward 25000 while support at 24400 holds well. The Nikkei remains below the key resistance at 39500. While this resistance holds, a break below 39000 is needed to confirm a decline toward 38500-38000. The Shanghai Composite has breached the 3400 level and if sustained, it could extend gains to 3450-3500.

The Dow (44642.52, -0.28%) has declined further but remains within the 44500-45000 range. Our bias is bearish to break 44500 and see a fall to 43000 and lower. A sustained rise above 45000 will only negate this view.

DAX (20384.61, +0.13%) is heading up towards 20500-20700. An extended rise to 21000 cannot be ruled out but be cautious. Because thereafter a reversal to 20000 and lower is possible. So, be cautious as the DAX heads into the 20500-21000 region.

Nifty (24677.80, -0.12%) remained stable on Friday. While above the support at 24400, the outlook is bullish to see a rise to 25000 and higher.

Nikkei (39197.52, +0.27%) has retreated from the resistance at 39500. A decisive break below 39000 is essential to confirm further downside toward 38500–38000. However, if 39000 holds as support, the index may rebound to retest the resistance at 39500.

Shanghai (3419.4950, +0.45%) has risen past 3400 keeping the near-term view bullish, targeting 3450-3500. Alternatively, a break below would lead to a further decline towards 3350 and maybe even lower. Watch price action near current levels.

Crude prices have tested their immediate support levels and look ranged between 71-73 (Brent) and 67-69 (WTI) for some time. Gold, Silver and Copper hold below their immediate resistance levels and can fall towards 2630-2600, 31.5-31.0 and 4.1 respectively in the near term. Natural looks bullish towards 3.4-3.6.

Brent ($ 71.34) fell to immediate support at 70.85 on Friday. The support is holding well and while above this it can rise back to 73 and range between 73-71 for some time. Only a sustained break above 73 can take it higher towards 75-76.

WTI ($ 67.40) tested support at 67 and needs to now break above 69 to see a rise towards 71-73. Else it can sustain in a narrow range of 67-69 for some time.

Gold ($ 2668.40) trades below the immediate resistance near 2700-2680 and can fall towards 2630-2600 in the upcoming session.

Silver (31.73) is failing to break above 32 and can fall towards 31.5-31.0 in the near term. Only a sustained break above 32 could take it higher towards 33-34. Will have to wait and watch.

Copper (4.2075) is attempting to break above the immediate resistance at 4.2, which if happens could open up higher levels of 4.4-4.6. Failure to rise above 4.2 could bring it down to 4.1, giving the narrow range of 4.2-4.1 for some time.

Natural Gas (3.25) closed lower at 3.07 on Friday but has opened higher with a gap up today at 3.26. It can move further up towards 3.4-3.6 in the near term.

23:50 05:20 JP GDP
… Exp – … Expected 0.3% … Previous 0.2%

1:30 07:00 CN CPI (YoY)
… Exp – … Expected 0.4 … Previous 0.3

1:30 07:00 CN PPI
… Exp – … Expected -2.8 … Previous -2.9

DATA ON FRIDAY:-
—————
4:30 10:00 RBI Repo Rate
… Exp 6.50% … Expected – … Previous 6.50% …Actual 6.50%

4:30 10:00 RBI Rev Repo Rate
… Exp – … Expected – … Previous 3.35% …Actual 3.35%

4:30 10:00 RBI MSF
… Exp – … Expected – … Previous 6.75% …Actual 6.75%

13:30 19:00 US NFP
… Exp 132K … Expected 202K … Previous 36K …Actual 227K

13:30 19:00 US Unemployment Rate
… Exp 4.1% … Expected 4.2% … Previous 4.1% …Actual 4.2%

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

13:30 19:00 US Average Hourly Earnings Production & Non Supervisory Employees
… Exp – … Expected – … Previous 0.4 …Actual 0.3

13:30 19:00 CA Labour Force
… Exp – … Expected 24.7 … Previous 14.5K …Actual 50.5