The Major currencies remained stable due to the thinner volumes. Dollar Index can rise towards 109-109.50 while above 107.50-108.00. Euro, EURINR and Aussie have limited upside and are likely to trade within 1.0450/0550-1.0350/0300, 89.50/90.00-88.00 and 0.6350/06300-0.6200 respectively until a decisive break is seen on either side. The pound has sustained above 1.25 but needs a strong break past 1.26 to rise higher within the 1.25-1.28 range. Else any break below 1.2500-1.2450, if seen, can be bearish. USDJPY tested 158 before coming down. A strong rise past 158 will be needed to extend the ongoing rise to 160 or higher. EURJPY has indeed risen past 164 and now if sustained, can test 166-167 on the upside. At the same time any fall below 164 can make it vulnerable to test 162 in the coming sessions. USDCNY is oscillating below the target of 7.30. While it trades above 7.25, the overall view is bullish towards 7.35. USDINR can extend the ongoing rise to 85.40/50 in the near term.
Dollar Index (108.168) remained stable above 108. While it trades above Immediate support region around 108.00-107.50, it can gradually ascend towards 109-109.50 in the near term.
EURUSD (1.0408) can trade within its immediate range of 1.0450-1.0350 and broad range of 1.0550-1.0300 region until a decisive break can be seen on the either side. A fall below 1.03 is not anticipated for now.
EURINR (88.7944) continues to oscillate below the interim resistance at 89.00. Unless a break past 90 is seen, the immediate range of 90.00/89.50-88.00 can hold for some time with upside capped at 89.50-90.00.
Dollar-Yen (157.58) tested our mentioned target of 158 before coming down. Only a decisive rise past 158 can extend the rise to 160 and higher. Else, it can fall back towards the previous levels. In either case, the downside can be limited to 155-154 for now.
EURJPY (164.13) surpassed 164 to the high of 164.762 before declining a bit from there. Now, the cross needs to sustain above 164 to head towards 166-167 in the near term. Else, any break below 164 can bring it lower to 162 in the coming sessions.
USDCNY (7.2985) is hovering near 7.30. While the immediate support around current levels and lower at 7.25 holds, the rise can extend to 7.35 in the near term.
Aussie (0.6219) is trading near the crucial support at 0.62. The outlook remains uncertain for now. Immediate support is coming at 0.62 and resistance at 0.6300-0.6350. A break on either side will be needed for further directional clarity. Any decisive break below 0.62 if seen, can make the pair bearish in the medium term.
Pound (1.2521) continues to remain stable above 1.25 for now. A rise past 1.26 will be needed to take it higher within its broad range of 1.25-1.28. Only a break below 1.2500/2450, if seen, can be strongly bearish in the medium term.
USDINR (85.2870) is rising in line with our bullish view and can target 84.40/50 in the near term.
The US Treasury and the German yields continue to remain higher but stable. The bullish view is intact for both the yields to move higher in the coming days. The 10Yr GoI has risen slightly. Resistance ahead can cap the upside. Outlook is bearish to see more fall from here.
The US 10Yr (4.58%) and 30Yr (4.77%) yields remain higher but stable. While above 4.5% (10Yr) and 4.7% (30Yr), the outlook is bullish to see a rise to 4.8% (10Yr) and 5% (30Yr).
The German 10Yr (2.32%) and the 30Yr (2.54%) yields remain flat. Bullish view is intact to see a rise to 2.4%-2.45% (10Yr) and 2.6% (30Yr).
The 10Yr GoI (6.8167%) has bounced. But resistance at 6.83%-6,84% can cap the upside. We retain our view of the yield falling to 6.7%-6.65%.
The Dow Jones sustained above 43,000 and edged higher. However, we anticipate a reversal from 43,400 or from higher levels of 44,000, potentially targeting a decline toward 42,000-41800. The DAX remains below 20,000, with the likelihood of falling further to 19,500. The Nifty continues to struggle to breach 23,900 and may consolidate within the 23,500-24,100 range. The Nikkei closed above 39,500 yesterday and has now risen past 40,000. A follow-through rally is needed to confirm further upside toward 41,000-42,000. The Shanghai attempted to climb above 3,400 but failed to sustain it and currently trades below this level. Any upside is expected to be capped at the 3,450 resistance.
The Dow (43325.80, +0.07%) sustains higher. We expect it to resume the downtrend either from around 43400 itself or after an extended rise to 44000. It can target 42000-41800 on the downside. A sustained rise above 44000 will only negate the bearish view.
DAX (19848.77) was closed yesterday. The market will open today after the three-day Christmas holidays. A dip to 19500 can be possible while below 20000.
Nifty (23750.20, +0.10%) continues to remain stable and range-bound between 23500 and 24100. We will have to wait for a breakout on either side of this range.
Nikkei (40074.51, +1.28%) has broken out of its sideways range of 38,000-40,000. A sustained rise above 40,000 is essential to confirm further upside momentum toward 41,000-42,000. Failure to maintain this breakout could see the index retreat into the prior range.
Shanghai (3,396.3920, -0.08%) is trading just below 3,400 and attempting to breach this level. A decisive move above 3,400 could drive the index higher toward the resistance at 3,450. Conversely, failure to rise past 3,400 could lead to a pullback to 3,350 or even lower.
Crude and Metal prices can remain ranged for a few more sessions. Brent and WTI can trade between 72.5/73-75 and 69-72 respectively. Gold, Silver can Copper remain rangebound between 2650/60-2600, 30.5-29.5/29.0 and 4.15/4.20-4.05. Natural Gas looks slightly bearish towards 3.0-2.8.
Brent ($ 73.25) fell due to the heightening concerns about US labor market strength. The mentioned range of 72.5/73-75 can hold for the next few sessions.
WTI ($ 69.59) dipped to 69.33 yesterday. A range of 69-72 can hold for now.
Gold ($ 2650.20) holds below 2650/60 as anticipated. While below this level it can fall back to 2600 and trade within the range of 2600-2650/60 for the upcoming sessions.
Silver (30.37) is holding well below the 21-Day moving average resistance near 30.5. While this holds, it can remain in the range of 30.5-29.5/29.0 for some time.
Copper (4.1290) has risen to the upper end of the mentioned range at 4.1455 yesterday. It may sustain within the range of 4.15/4.20-4.05 for the near term.
Natural Gas (3.3050) fell sharply to a low 3.2560 due to the forecasts for warmer US winter temperatures to continue. If the fall sustains it can target 3.0-2.8 on the downside, else can bounce back to 3.5-3.8 in the near term.
23:30 05:00 JP Unemp
Expn 2.4% …Expected 2.5% …Previous 2.5%
DATA YESTERDAY:
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No major data released Yesterday