The downside targets of 106.00-105.50 are kept alive in Dollar Index but that will require Euro to bounce back from 1.04 after the expected rate cut by ECB. We will have to watch out on that today. EURINR can trade within 91-90 region for a while. USDJPY has broken below 155 and if sustained, can get dragged towards 150 soon. EURJPY, AUDUSD and Pound are trading near the lower end of their respective ranges of 164-160, 0.63-0.62 and 1.26-1.24. USDCNY is closed today. USDINR can continue to trade within its range of 86.20-86.60 region for now.

FED kept the rates unchanged at 4.50%. Dollar Index (107.816) yesterday rose to the high of 108.295 before coming down. Our downside targets of 106.00-105.50 are kept alive until a strong rise is seen above current levels. Wait and watch for now.

EURUSD (1.0422) had slipped below 1.04 to the low of 1.0382 but soon recovered from there. While the immediate support around 1.04 holds, pair can again attempt to rise back towards 1.05 and higher again. ECB in its meeting today is expected to cut the rates by 25 bps. If so, pair could be vulnerable to break below 1.04 and head towards the lower levels of 1.0350-1.0300.

EURINR (90.2411) yesterday observed the low of 89.8974 bur is currently back within its earlier range of 91-90. Only a strong break below 90 can make it vulnerable to test 89 again on the downside.

EURJPY (160.87) is coming off sharply and is trading near the lower end of its 164-160. On the other hand Dollar-Yen (154.35) has broken below its 157-155 range. A strong break below 160 can open the doors for 157-156 on the downside for EURJPY. USDJPY will have to rise past 155, else it can get dragged towards 150 in the near term.

USDCNY (7.2502) is closed today. While above 7.250-2.225, a rise back towards 7.28/29 can be seen in the near term.

Aussie (0.6236) and Pound (1.2448) continues to trade lower within their respective ranges of 0.63-0.62 and 1.26-1.24. Any break below 0.62 and 1.24 if seen, can make them vulnerable to test 0.61-0.60 and 1.22 respectively on the downside.

The range of 86.60-86.20 remains intact in USDINR (86.5520) for now. Only a decisive break past 86.60 if seen, can indicate further bullishness. Our view of pair falling towards 86.00-85.90 is kept on hold until further clarity.

The US Treasury yields have inched up. But resistance ahead can cap the upside and drag them down to test their support. After this fall, we can expect the uptrend to resume. The US Fed meeting turned out to be a non-event for the market. The central bank kept the rates unchanged at 4.25%-4.5%. The German yields are coming close to their resistance. We expect the resistance to hold and the yields to fall back again. The ECB meeting outcome today will be important to watch. The Indian 10Yr GoI manages to sustain higher. The yields can rise going forward while they sustain above their supports.

The US 10Yr (4.54%) and 30Yr (4.78%) have bounced slightly. The yields can test 4.5%-4.4% (10Yr) and 4.7%-4.6% (30Yr) on the downside and then resume their broader uptrend. That rise can take them up to 5% (10Yr) and 5.2% (30Yr) over the medium-term.

The German 10Yr (2.58%) and the 30Yr (2.80%) yields have come up to their resistance. We expect them to reverse lower again and keep intact our bearish view of seeing a fall to 2.4% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.6860%) yield is managing to hold higher. Support at 6.65%-6.6% can limit the downside from here. We expect the yields to reverse higher breaking above 6.7% and target 6.8%-6.85% in the coming weeks.

The Dow Jones has turned lower from a high of 44962.58 and could test the upper end of its sideways range of 45100-41850. DAX and Nifty have risen well. DAX is approaching 21900, from where a reversal could be expected. Nifty has climbed above 23100, with further potential to test resistance at 23400. A decisive break above 23400 would negate the downside risk towards 22800-22500. Nikkei has moved towards 39500. A sustained rise past 39500 could push the index higher towards 40000.

The Dow (44713.52, -0.31%) has dipped slightly. There is no sign of a reversal yet. The upside is still open to test the upper end of the 41850-45100 range.

DAX (21637.53, +0.97%) has risen above 21500. An extended rise to 21900 looks likely to happen now before a reversal happens.

Nifty (23163.10, +0.90%) has risen above 23000 again. If it manages to sustain above 23000, a rise to 23400 is possible. But a strong rise above 23400 is needed to negate the chances of the fall to 22800-22500. We will have to wait and watch.

Nikkei (39498.52, +0.21%) extended its rise towards 39500. A rise past 39500 would take the index higher towards 40000.

Shanghai (3250.6007, -0.06%) will remain closed until February 4, 2025, due to the Chinese New Year holidays. Trading activity is expected to resume thereafter.

Crude prices have dropped as weekly EIA data showed a larger-than-expected increase in crude and gasoline inventories. While the support levels are holding, prices may bounce back towards $ 79-81 (Brent) and $ 75-77 (WTI). Gold needs a sustained break above $ 2800 to turn bullish towards $ 2850. Silver seems to be ranging between $ 31.8-30.0 for the time being. Copper and Natural Gas remain bearish, with targets around $ 3.0-2.8 and $ 4.1, respectively.

Brent ($ 76.77) and WTI ($ 72.87) have dropped to their immediate support levels after the weekly EIA report showed a higher-than-expected increase in crude and gasoline inventories. The support is holding for now, and as long as this level is maintained, we expect a potential rally towards $ 79-81 for Brent and $ 75-77 for WTI.

Gold ($ 2797.20) has slightly risen towards $ 2800. A sustained break above this level could push prices higher towards $ 2850 in the coming weeks.

Silver ($ 31.67) reached a high of $ 31.77 yesterday. While it’s still below the immediate resistance, a range between $ 31.8-30.0 could hold for some time.

Copper (4.2865) saw a sharp rise to $ 4.31 yesterday. As long as the immediate resistance near $ 4.35/37 holds, our outlook remains bearish towards $ 4.1 in the coming weeks.

Natural Gas (3.1780) experienced a slight bounce yesterday, but our overall view remains bearish, with targets around $ 3.0-2.8 for the upcoming weeks.

1:30 07:00 AU CPI
… Exp 3.5% … Expected 2.5% … Previous 2.8%

14:00 19:30 BOC Meeting
… Exp – … Expected 3.0% … Previous 3.3%

18:00 23:30 US FOMC Meeting
… Exp <4.50% ... Expected <4.50% ... Previous <4.50% DATA YESTERDAY
—————
13:30 19:00 US Durable Goods Order
… Exp -0.8% … Expected 0.1% … Previous -2.0% …Actual -2.2%

14:00 19:30 US Case Schiller
… Exp – … Expected 4.2% … Previous 4.2% …Actual 4.3%

15:00 20:30 US Cons Conf
.. Exp 101 … Expected 106 … Previous 105