The Dollar Index is hovering near the support around 106.75, a decisive break below which can take it to 106.00 or even lower. 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 can have a limited downside to 0.6350-0.6300 for now. The Pound has bounced well from the level of 1.26 and, if sustained can extend the rise towards 1.28 in the coming sessions. USDCNY continues to rise further and remains bullish towards 7.30-7.35. USDJPY and EURJPY can have the upside limited to 155 and 163 respectively for now below which a corrective fall can be witnessed in the near term. USDINR has risen past 84.85 contrary to our expectations. On the NDF it is currently trading higher. If it fails to see an immediate dip in the onshore markets below 84.90, then it could be vulnerable to head towards 84.95-85.00 soon. US Retail Sales, US Industrial production, US Capacity Utilization, and German IFO data releases are scheduled today.

Dollar Index (106.735) continues to oscillate near the support around 106.75, a break below which can drag it further to 106.00-105.50 in the coming sessions. The upside is capped at 108 and the overall view remains bearish. Watch out for US Industrial Production and Capacity Utilization data release scheduled today.

EURUSD (1.0522) is rising gradually and if sustained, can extend its ongoing rise to 1.0550-1.0600 in the near term. Thereafter, a strong break past 1.06 will be needed to become bullish in the medium term.

EURINR (89.3196) has risen well within its range of 88-90 but a decisive break on either side 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) tested 154.48 yesterday in line with our view of seeing a rise towards 155, before declining a bit from there. While the resistance around 155 region holds, the preferred view is to see a fall back towards 152 in the near term. Watch price action closely around 155 for now. Its range of 150-155 can hold for some time.

EURJPY (161.92) tested 162.477 before it started coming off. While below 163, it is likely to fall back to 160 or even lower in the coming sessions.

USDCNY (7.2812) continues to remain stable above 7.28 for now. Repeating from the previous reading, 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 (0.6366) can have the downside limited to 0.6350-0.6300. Upon testing either level, it can attempt to bounce back higher and a strong break past 0.6450 can pave the way for bullishness in the medium term.

Pound (1.2688) was expected to fall towards 1.25 on a confirmed break below 1.26 but instead, it bounced well from the level of 1.2608 itself. Further, if the rise sustains, it can attempt to rise to 1.28 in the coming sessions. BOE policy meeting is scheduled on Thursday which might give better clarity on where the pair is headed. For now, its range of 1.25-1.28 can persist in the near term.

USDINR (84.88) rose to the high of 84.8725 yesterday, contrary to our expectations of it trading below 84.85 for the current week. On the NDF as well it continues to trade higher. If an immediate dip is not seen below 84.90, then it could be vulnerable to test 84.95-85.00 much sooner than anticipated.

Market seems to be waiting for the Federal Reserve meeting outcome tomorrow as the US Treasury and the German yields remain stable. The Treasury yields have room to rise from here to test their resistance. The US Fed meeting will determine whether there can be an extended rise or a reversal thereafter. German yields remain bullish and can rise more. The 10Yr GoI remains stable. They can rise in the near-term before reversing lower again.

The US 10Yr (4.39%) and 30Yr (4.60%) yields remain stable. Our view of seeing a rise to 4.45%-4.5% (10Yr) and 4.65%-4.7% (30Yr) remains intact. Price action thereafter will need a close watch.

The German 10Yr (2.24%) and the 30Yr (2.47%) yields remain stable. Outlook is bullish to see 2.4%-2.45% (10Yr) and 2.6% (30Yr) on the upside.

The 10Yr GoI (6.7856%) is hovering around 6.78%. While above 6.75%, a rise to 6.8%-6.83% can happen first before reversing lower again.

The Dow Jones continues to decline, maintaining our bearish outlook with a target range of 43,000-42,000. The DAX has dropped to 20,300, with interim support at 20,200. A bounce to 20,500-20,700 can soon be possible while above 20200. The Nifty failed to sustain above 24,800 and has slipped lower. However, as long as it remains above the support zone of 24600-24500, the view remains bullish towards 25,000. The Nikkei initially rose to 39,778 but was unable to sustain at higher levels and is currently trading near 39,500. A follow-through rise is needed to achieve our target of 40,000-41,000. Meanwhile, the Shanghai remains under pressure, trading below 3,400. As long as it stays below this level, the risk of a decline toward 3,350-3,300 persists.

The Dow (43717.48, -0.25%) has come down to test 43700. Bearish view is intact to see 43000 on the downside. The upside can be capped at 44000-44200 if there is a corrective bounce from here.

DAX (20313.81, -0.45%) has to sustain above 20200 to keep alive the chances of a rise to 20700-21000. Else the fall to 20000 and lower levels can be seen from here itself.

Nifty (24668.25, -0.42%) remained lower but is holding well above the 24600-24500 support zone. While above 24500, the bullish view will remain intact to see 25000 and higher levels.

Nikkei (39545.50, +0.24%) trades near 39,500 but lacks momentum to sustain an upward move. Sustained trade above 39,500 could pave the way for a rise toward 40,000-41,000. However, a break below 39,500 may trigger a decline toward 39,000-38,000.

Shanghai (3381.5443, -0.14%) continues to trade below 3,400, keeping the outlook bearish for a fall toward 3,350-3,300. A sustained move above 3,400 would be required to negate the downside bias.

Crude prices have sustained a fall after disappointing Chinese Retail Sales data. The prices can rise towards 75.5-76.0 (Brent) and 72.5-73.0 (WTI) in the near term. Gold and Copper look bearish towards 2600 and 4.05 respectively while Silver and Natural Gas can bounce back towards 31.5-32.5 and 3.4-3.6.

Brent ($ 73.83) fell slightly after China’s retail sales growth in November fell deeper than expected. While above 73, a rise towards 75.5-76.0 looks likely in the near term.

WTI ($ 70.17) has dipped slightly. While above 69 we retain our view of seeing a rise to 72.5-73.0.

Gold ($ 2673.80) is holding above 2650. Our outlook remains bearish towards 2600 in the near term before seeing a rise towards 2700-2750 later.

Silver (31.05) is holding above the immediate support of 31 and can rise towards 31.5-32.0-32.5 in the near term.

Copper (4.1935) is failing to rise above 4.2. As long as it holds below 4.2 a fall towards 4.10-4.05 can take place in the upcoming weeks.

Natural Gas (3.2140) fell to a low of 3.1450 but could not sustain lower and has closed above 3.2 yesterday. While 3.2 holds, a rise towards 3.4-3.6 can take place in the near term. A broad range of 3.14/3.2-3.6 can hold for some time.

7:00 12:30 UK Unemp
… Exp 4.0% … Expected 4.3% … Previous 4.3%

9:00 14:30 GER IFO Business Climate
… Exp 86.1 … Expected 85.6 … Previous 85.7

9:00 14:30 GER IFO Business Situations
… Exp 83.4 … Expected 84.0 … Previous 84.3

9:00 14:30 GER IFO Business Expectations
… Exp 85.6 … Expected 87.5 … Previous 87.2

10:00 15:30 EU Trade Bal
… Exp – … Expected 11.9 … Previous 13.6

13:30 19:00 US Retail Sales (MoM)
… Exp 0.2% … Expected 0.6% … Previous 0.4%

13:30 19:00 CA Inflation Y/Y
… Exp – … Expected 2.1% … Previous 2.0%

14:15 19:45 US Industrial Production
… Exp 0.0% … Expected 0.2% … Previous -0.2%

14:15 19:45 US Capacity Utilization
… Exp 77.1% … Expected 77.3% … Previous 77.1%

DATA ON YESTERDAY:-
—————
2:00 07:30 CN IIP (YoY)
… Exp – … Expected 5.4 … Previous 5.3 …Actual 5.4

2:00 07:30 CN Retail Sales
… Exp – … Expected 5.0 … Previous 4.8 …Actual 3.0

6:30 12:00 IN WPI
… Exp 2.05% … Expected 2.20% … Previous 2.36% …Actual 1.89%

13:00 18:30 IN Trade bal
… Exp -25.4 … Expected – … Previous -27.1 …Actual -37.8