The Dollar Index can rise towards 109.0-109.5 in the near term while Euro, EURINR, USDJPY and GBPUSD can trade sideways between 1.0350/1.03-1.0450, 89.5-88.5/88, 158-156 and 1.26/1.2650-1.2500 respectively for the near term. EURJPY and Aussie look bearish towards 162 and 0.6150-0.6100 respectively. USDCNY continues to hover below 7.30 but as long as it holds above 7.28/25 the view remains biased for a rise towards 7.35. USDINR needs to decline from 85.65/75 to fall towards 85.50 else can extend further towards 85.80 and higher on a stronger Dollar.

Dollar Index (108.48) has risen sharply due to the higher-than-expected US Case Schiller released yesterday. It can continue to incline towards 109-109.50 in the near term while above 107.50.

EURUSD (1.0355) fell sharply to 1.035 in line with our expectations and on a stronger Dollar. A broader range of 1.5-1.03 can hold for the medium term, extending the downside to 1.03 on a break below immediate support near 1.0350.

EURINR (88.5781) fell sharply to 88.57 from 89.26 seen yesterday. It can trade within a range of 89.5-88.5 for a few more sessions while above 88.50, a break below which can make it vulnerable to test 88.

Dollar-Yen (157.312) tested a low of 156.01 yesterday before closing higher above 157.31. While below 158 it can trade sideways between 158-156 for the near term.

EURJPY (162.73) has dipped and can test immediate support at 162 in the near term before bouncing back to 164-165 levels. Only, a sustained break below 162 if seen, can make the outlook bearish for a while. Watch price action around 162 closely.

USDCNY (7.2991) has traded flat below 7.30. While the immediate support at 7.28 holds we retain our view of seeing a rise towards 7.35 in the near term.

Aussie (0.6188) has broken slightly below 0.62. If the fall sustains then it can target 0.6150 or even 0.6100 in the near term.

Pound (1.2511) has fallen to 1.25 in line with our expectations. A bounce from 1.25 can keep it ranged within 1.26/1.2650-1.2500 for some time.

USDINR (85.62) tested a high of 85.64 before closing at 85.62 yesterday but quotes lower at 85.5330 on the NDF just now. But the pair might open near 85.60/65 today and move up towards 85.75/80 or higher on a stronger Dollar and a weaker Euro. A dip to 85.50 can be possible if it faces selling near the 85.65/75 region but we have to wait and see if it can extend to our downside targets of 85.40/35 in the coming days.

The US Treasury yields have risen back. The bullish view is intact and there is room to rise more. German yields were closed yesterday on account of the New Year’s Eve holiday. The Indian 10Yr GoI has declined below the immediate support as expected. The downtrend has resumed, and the yield can fall further from here.

The US 10Yr (4.57%) and 30Yr (4.78%) yields have risen back. While above the 4.5%-4.45% (10Yr) and 4.7%-4.65% (30Yr) support, the outlook is bullish for rise to 4.8% (10Yr) and 5% (30Yr).

The German 10Yr (2.36%) and the 30Yr (2.59%) yields were closed yesterday on account of the New Year’s Eve.

The 10Yr GoI (6.7903%) has declined below 6.8% as expected. This confirms the resumption of the broader downtrend. While below 6.8%, the yield can fall to 6.7%-6.65% in the coming days.

The Dow Jones and DAX remained flat and closed lower with a continued bearish outlook. The Dow is expected to target 42000-41800 while the DAX shows potential for further declines toward 19,500. The Nifty experienced initial weakness, falling to a low of 23460, before closing flat. Further, it looks vulnerable to see a fall towards 23200-23000. The Nikkei remained below the critical 40000 level, signaling potential consolidation within the 38000-40000 range as long as it remains under this threshold. Meanwhile, the Shanghai Composite struggled to maintain levels above 3400, retreating to 3351. Should the downward trend persist, the index may test the support at 3300.

The Dow (42544.22, -0.07%) remains lower. Bearish view is intact to see a fall to 42000-41800.

DAX (19909.14) was closed yesterday due to the New Year’s Eve holiday.

Nifty ((23644.80, 0%) rose back from the low of 23460 to close flat. But, the bias is negative to see 23200-23000 on the downside. Resistance will now be at 23700-23800.

Nikkei (39894.32, -0.96%) is expected to remain range-bound between 38000 and 40000 for the very near term. A decisive break above 40000 is necessary to invalidate this view and open the doors for a potential rise toward 41000.

Shanghai (3351.7630, -1.63%) has fallen towards the support of 3350. Continued fall from here can take the index lower to the support of 3300.

Crude prices can sustain within the range of 75-73 (Brent) and 72-69 (WTI) for a few more sessions. Gold is holding above 2600 but needs to break above 2650 to be bullish towards 2700-2750, else a fall to 2550-2500 cannot be negated. Silver and Copper can range between 29.0-30.5 and 4.0-4.15 respectively, while above 29 and 4. Natural Gas could trade within 3.5-4.0. A break past 4 will be needed to turn bullish for the medium term.

Brent ($ 74.83) has climbed up to its immediate resistance as expected. While the resistance holds, a fall to 74-73 can be seen in the near term. Overall, a narrow range of 75-73 can hold for the upcoming sessions.

WTI ($ 71.87) has tested the immediate resistance at 72 yesterday and while this level holds, a fall to 70-69 can take place in the upcoming sessions, giving a range of 72-69 for some time.

Gold ($ 2639.30) is holding well above the support at 2600. As long as this level holds, we may see a break on the higher side above 2650 and a rise towards 2700-2750 in the medium term. Failure to sustain above 2600 could turn out bearish towards 2550-2500. It seems better to stay off the market until a breakout on either side of the range is seen for more clarity.

Silver (29.29) fell towards its immediate support as anticipated. It can bounce back to 30.0-30.5 while above 29.

Copper (4.0235) has broken slightly below 4.05 to test 4.0 on the downside. While above 4 it can still bounce back to the 4.10-4.15 region, which will then give us a range of 4.0-4.15 for the upcoming weeks. Alternatively, a sustained break below 4 would confirm bearishness towards 3.9-3.8, but that looks less likely for now.

Natural Gas (3.6330) plunged to a low of 3.57 after testing a high of 4.01 yesterday. Only a sustained break above 4 could revive our earlier bullish outlook towards 4.6-4.8. Else, while the immediate support at 3.5 holds it can trade between 3.5-4.0 for some time.

No major data release today.

DATA YESTERDAY:
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14:00 19:30 US Case Schiller
… Exp – … Expected 4.1% … Previous 4.6% …Actual 4.2%