The Trump’s statement on not imposing tariffs immediately led the Dollar to weaken against major currencies. The Dollar Index has broken below 108.75 but could find deeper support around 108.00-107.75 region. Our target of 111 is kept on hold for now. The Euro has risen well but could face rejection from 1.04. EURINR continues to remain volatile within the 90-88 region. USDJPY has slipped again to support around 155, but while it holds; there could be scope to see a rise back towards 158 in the near term. AUDUSD and Pound appear bearish towards 0.61-0.60 and 1.20 respectively while below 0.630 and 1.24/26. EURJPY has an upside caped at 164 and a break below 160 if seen, can drag it lower to 157-156. USDCNY has been coming off sharply but could find support near 7.25 region. USDINR on the NDF is also trading lower and we can witness a lower opening in our markets as well. Later, as the buying pressure strikes in, the spot is likely to move higher. Our view remains intact for it to head towards 86.80 by the end of Jan’25.

Dollar Index (108.304) came down significantly after the announcement that President Trump will not impose trade tariffs immediately. The index has broken below the support of 108.75 and we need to see whether the fall extends further or halts at 108.00-107.75 region. The upside target of 111 is kept on hold until further clarity.

EURUSD (1.0384) has surged well on Dollar weakness but a strong resistance is coming around 1.0350-1.0400 region below which still it has a scope to fall back towards previous levels. Only a sustained rise past 1.04 if seen can negate the bearish view.

EURINR (89.6897) is unable to see a rise past the level of 90 which will be needed to rise further. Until then a broad range of 88-90 can persist.

Dollar-Yen (155.09) is back near its support around 155. While the support at 155 holds; we retain our view of seeing a rise back towards 158. Only a strong break below 155 if seen, can be bearish for the pair. Watch price action around 155 closely.

EURJPY (161.15) witnessed a high of 162.315 before coming down. The upside is capped at 164 for now and on the downside a break below 160 will be needed to bring 157-156 into the picture.

The yuan strengthened to the level of 7.2716 after Trump’s statement on Tariffs delay. USDCNY (7.2758) still has deeper support around 7.25, above which it can bounce back again. The target of 7.35 can get delayed.

Aussie (0.6247) and Pound (1.2291) have strengthened further but while below 0.6300 and 1.24/26, the outlook appears bearish towards 0.62-0.61 and 1.20 respectively.

USDINR (86.2720) yesterday closed near 86.50. Currently, on the NDF it is trading much lower. We may witness a lower opening in the onshore markets as well but eventually, as the buying strikes in, the spot can move higher again. We retain our view of USDINR heading towards 86.70/80 by the Jan’25 end.

The US Treasury yields have declined sharply in the early Asian session today. The yields are coming down in line with our expectation. There is room to fall more from here before the broader uptrend resumes. The German yields continue to dip gradually. The yields can fall more while they remain below their immediate resistance. The 10Yr GoI remained stable. The yield can fall from here before reversing higher again.

The US 10Yr (4.55%) and 30Yr (4.79%) yields have declined sharply in the early Asian session today. The extended fall to 4.5% (10Yr) and 4.7% (30Yr) is happening as expected. After this fall we can expect the uptrend to resume targeting 5% (10Yr) and 5.2% (30Yr) over the medium-term.

The German 10Yr (2.52%) and the 30Yr (2.75%) yields continue to dip gradually. The yields can fall to 2.4% (10Yr) and 2.6% (30Yr) while below 2.6% (10Yr) and 2.8% (30Yr).

The 10Yr GoI (6.7610%) remained stable. While below 6.8%, a fall to 6.7%-6.65% is possible before a reversal is seen.

The Dow Jones was closed yesterday. The index maintains a bullish outlook towards 44,000, and a break above this level could extend the rally to 45,000. DAX is heading towards 21300-21500. Nifty is holding above 23,000, trading within the 23,000-23,500 range. A breakout on either side is necessary to gain directional clarity. Nikkei is attempting to rise past 39,000, with the potential to move further towards 40,000. Shanghai, unable to sustain a move above 3,250, is trading below it. However, while above the 3,200-3,150, it retains the possibility of rising towards 3,300-3,350.

The Dow (43487.83) was closed yesterday. A rise to 44000 looks possible now. On the monthly candles, 41850-45100 is the range that seems to remain intact. So, a rise above 44000 can take it up to 45000. We will have to wait and watch.

DAX (20990.31, 0.42%) continues to move up. Our bullish view of seeing a rise to 21300-21500 remains intact.

Nifty (23344.75, 0.61%) is in a 23000-23400 range. Need to wait for a breakout of this range to determine the next leg of move. Bias is negative to break 23000 and fall to 22800 and lower. We reiterate that 22500 is a long-term support from where Nifty can reverse again.

Nikkei (38,951.72, +0.13%) is attempting to rise past 39,000 within its broader sideways range of 38,000-40,000, with the potential to test 40,000 on the upside.

Shanghai (3,239.2864, -0.18%) has fallen below 3,250. While it sustains above 3200-3150, it has room to witness a rise towards 3300-3350.

Crude prices have fallen further down due to the Trump’s inaugural uncertainty. The prices are expected to decline further towards 79 (Brent) and 75 (WTI) in the near term. Gold and Silver looks uncertain for now as they have to break above their immediate resistance levels to be bullish towards our earlier mentioned levels of 2800-2850 and 33-34 respectively. Copper and Natural Gas can fall towards 4.2 and 3.6 in the coming sessions.

Brent ($ 79.79) and WTI ($ 76.35) continue to fall in line with our expectations, due to the trump inauguration uncertainty. A further fall towards 79 and 75 looks likely in the near term.

Gold ($ 2732.40) is failing to break past 2750. Only a sustained break above this would take it higher towards 2800-2850 in the coming weeks. Else a fall back to 2700-2650 is possible.

Silver (31.31) has risen as expected. It can test 32 in the next few sessions, thereafter it must break above 32 to see bullishness towards 33-34 in the upcoming months.

Copper (4.3260) has declined further, testing a low of 4.28 yesterday. It can fall further towards 4.2 in the near term.

Natural Gas (3.81) declined slightly, immediate support at 3.6 can be tested in the near term before continuing its rise towards 4.4-4.5 in the coming weeks.

7:00 12:30 UK Unemp
… Exp 4.2% … Expected 4.3% … Previous 4.3%
–
13:30 19:00 CA Inflation Y/Y
… Exp – … Expected 1.9% … Previous 2.0%

DATA YESTERDAY:
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No major data released yesterday.