Dollar Index failed to sustain its rise past 107 and slipped below it. The index can have an upside limited to 108 and either upon testing it or from current levels itself, it can start falling back. Euro if sustains the ongoing rise, can test 1.0550-1.0600 in the coming sessions. EURINR needs to see a decisive break on either side of the range of 88-90 for further directional clarity. Aussie continues to trade below 0.64 but a fall below 0.6350-0.63 is not anticipated. It can bounce back higher upon testing 0.6350-0.6300 on the downside. The Pound can also extend its fall within its earlier range of 1.2750-1.2450 on a confirmed break below 1.26. USDCNY continues to rise further and while above 7.25, the view remains bullish towards 7.30-735. USDJPY and EURJPY are rising as expected but immediate resistances are coming around 155 and 163 regions respectively. Need to see whether it holds and pushes the pair back to previous levels or not. USDINR, for the current week, can trade within 84.85-84.70 region. Broadly a range of 84.90-84.68 can hold till the end of Dec-24.

Dollar Index (106.877) tested 106.719 before closing higher. While the support near 106.75 holds, it has the chance to bounce back but the upside can be capped at 108. Either from current levels or upon testing 108, the Index is likely to fall back towards 106 as markets begin speculating on rate cuts by FED and could even fall further if the rate cuts happen.

EURUSD (1.0515) tested 1.0453 on Friday, in line with our view of seeing a fall towards 1.04 before it started rising back. If the ongoing rise continues, it can be extended to 1.0550-1.0600 in the coming sessions. Thereafter, a strong break past 1.06 will be needed to become bullish in the medium term. The downside can be limited to 1.0450-1.0400 max.

EURINR (89.2027) witnessed a low of 88.5197 on Friday before rising back to current levels. Still a decisive break on either side of its range of 88-90 will be needed for further directional clarity. The bias remains positive to see a rise towards 91 as the EURUSD breaks past 1.0650.

Dollar-Yen (153.86) has tested our initial target of 154 as the market broadly expects the BOJ to keep the interest rates on hold. Given the outlook on the Dollar Index, USDJPY can also have an upside limited to 155 and can eventually start coming down in the coming sessions. For now, its range of 150-155 can hold for some time.

EURJPY (161.75) indeed gained strength past 160 and met our target of 162 before declining a bit from there. An immediate resistance is coming around 163 below which the cross is likely to fall back toward previous levels in the medium term. Watch price action around 162-163 to see whether it holds or not.

Our bullish view on USDCNY (7.2801) towards 7.30/35 contradicts the view on the Dollar Index. We will have to wait for further updates from China on whether they will continue to allow the Yuan to weaken to prepare for Trump tariffs or not. For now, above 7.25, a rise to 7.30/35 looks likely.

Aussie (0.6363) continues to trade below 0.64. Even if the fall extends, the downside is anticipated to be limited to 0.63 for now. Thereafter, it can attempt to bounce back higher. Only a strong break past 0.6450 can initiate bullishness in the medium term.

Pound (1.2631) is coming off as expected. A confirmed break below 1.26 can pave the way to a fall towards 1.25. The earlier range of 1.2750/70-1.2450 can persist in the near term.

USDINR (84.8060) could have a limited upside to 84.90 for Dec-24 but for the current week, the pair is projected to trade within the 84.85-84.70 region. Overall, a broad range of 84.90-84.68 can hold till the end of Dec-24.

The US Treasury yields have risen further and are heading up towards their key resistances. The price action after testing this resistance will need a close watch. The US Federal Reserve meeting outcome on Wednesday will be a key event for this week. Their economic projection will be very important to watch. The German yields continue to rise. The outlook is bullish. There is room to rise more. The 10Yr GoI has dipped slightly but can rise back again. There is room to rise in the near-term before a reversal is seen again.

The US 10Yr (4.39%) and 30Yr (4.60%) are heading up towards 4.4%-4.5% (10Yr) and 4.65%-4.7% (30Yr) in line with our expectation. Need to watch the price action after this rise.

The German 10Yr (2.25%) and the 30Yr (2.48%) yields are continuing to move up. The yields can see an extended rise to 2.4%-2.45% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.7705%) has dipped from around 6.79% but may find support at 6.75%. While above 6.75%, a rise to 6.8%-6.83% can still happen.

The Dow Jones is bearish towards 43000-42000 while below 44000. Similarly, DAX could rise towards 20700-21000 while above 20200. Nifty plunged to 24200 followed by a reversal above 24700. While it sustains above 24700, a rise towards 25000 looks possible. The Nikkei is steady at around 39,500, with the immediate outlook remaining uncertain. A break above this level could lead to a rise toward 40000, while a dip could push it down to 39000. Shanghai trades below 3400 and keeps our view bearish, targeting 3350-3300.

The Dow (43828.06, -0.20%) keeps intact our bearish view. It can fall to 43000 first and then to 42000-41000 eventually over the medium term. Intermediate support is at 43700 from where a short-lived bounce is possible.

DAX (20405.92, -0.10%) has room to test 20700-21000. After this rise a fall to 20000 and lower can happen. Be cautious as the DAX moves towards 21000.

Nifty (24768.30, +0.89%) has risen back sharply from the low of 24181. The chances are high to break 24800 and see a rise to 25000 and higher. Bias is bullish

Nikkei (39533.50, +0.16%) is trading near 39500 with an indecisive short-term outlook. Price action around 39500 will be key to determining direction. Holding above this level could trigger a rise toward 40000 and higher. Conversely, a break below 39500 could open the door for declines toward 39000–38000. Wait and watch.

Shanghai (3385.5704, -0.16%) trades below 3400, maintaining a bearish stance with downside targets of 3350–3300 while it remains under this threshold. Only a rise past 3400 would negate the immediate fall.

Brent and WTI have moved up and can target 75.5-76.0 and 72.5-73.0 respectively. Gold, Silver and Natural Gas have fallen. A broad range of 2600-2750, 30.5-32.5, and 3.2-3.6 can hold for the upcoming weeks. Copper looks bearish towards 4.10-4.05 while below 4.20.

Brent ($ 74.28) rose on the prospects for additional sanctions on Russian and Iranian crude supplies on Friday. A further rise towards its immediate resistance near 75.5-76 looks likely in the near term.

WTI ($ 71.42) also rose to 71.42 on Friday as expected. It can test its immediate resistance near 72.5-73.0 in the upcoming sessions.

Gold ($ 2670.50) broke below 2700 and fell to 2663 on Friday. The near term looks bearish towards its immediate support near 2600. Thereafter, while the support holds, a broad range of 2600-2750 can hold for some time.

Silver (31.03) tested its immediate support at 30.75 on Friday and while this holds, a bounce towards 31.5-32.0 can be seen in the near term. Overall, a broad range of 30.5-32.5 can hold for the upcoming weeks.

Copper (4.1985) is trading slightly below 4.20. A sustained break below this level is needed to see a further fall towards 4.10-4.05. Alternatively, if a break above 4.2 is seen, it could limit the upside to 4.3.

Natural Gas (3.2260) has held below 3.6 and pushed the price down sharply to 3.2640 on Friday, as expected. Immediate support is at 3.2 above which, a range of 3.2-3.6 can hold for some time.

2:00 07:30 CN IIP (YoY)
… Exp – … Expected 5.4 … Previous 5.3

2:00 07:30 CN Retail Sales
… Exp – … Expected 5.0 … Previous 4.8

6:30 12:00 IN WPI
… Exp 2.05% … Expected 2.20% … Previous 2.36%

13:00 18:30 IN Trade bal
… Exp -25.4 … Expected – … Previous -27.1

DATA ON FRIDAY:-
—————
23:50 05:20 JP Tankan Large Manufacturers Index
… Exp – … Expected 13 … Previous 13 …Actual 14

0:01 05:31 UK Cons Conf
… Exp -21 … Expected -18 … Previous -18 …Actual -17

7:00 12:30 UK Trade Bal
… Exp -16.1 … Expected -16.1 … Previous -16.3 …Actual -19

10:00 15:30 EU Ind Prodn (MoM)
… Exp -1.6 … Expected 0.0 … Previous -1.5 Actual 0.0