The Dollar Index gained strength post the ECB rate cut, but whether it extends further towards 109 or not can be determined after the US PCE & Personal income scheduled today. Euro has slipped below 1.04 and failure to rise back above it can make the pair vulnerable to test 1.0350-1.0300 on the downside. EURINR can trade within 91-90 region until a decisive break is seen. USDJPY contineus to trade 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 is trading above 86.60 on the offshore and if the rise continues, a test to 86.80 looks likely to happen.

ECB as widely expected went ahead with the 25-bps rate cuts. As a resukt Dollar Index (108.116) gained strength from yesterday’s low of 107.50. Currently the index looks stable above 108 but US PCE & Personal income scheduled today can give us further clarity on whether the rise extends towards 109 or not. Only a break below 107 can turn index bearish for a while.

EURUSD (1.0392) witnessed the high of 1.0467 but eventually faded the gains and slipped below 1.04. The pair will have to rise past 1.04 and break above 1.0450 to turn bullish again, else it will be vulnerable to test 1.0350-1.0300 on the downside. Watch price action closely around current levels.

EURINR (90.0508) is trading just near the lower end of its range of 91-90. Only a strong break below 90 can make it vulnerable to test 89 again on the downside.

A strong break below 160 can open the doors for 157-156 for EURJPY (160.87) , until then the range of 164-160 can hold. Dollar-Yen (154.05) had initially risen to the high of 155.23 but could not sustain and started coming off. While below 155, 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 (0.6220) and Pound (1.2425) 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.

USDINR (86.6250) yesterday closed above 86.60 in the onshore markets and currently on the offshore as well it is trading higher. If the rise continues further, can get extended to 86.70/80 in the near term. watch price action closely to see whether the range of 86.60-86.20 holds or not.

The US Treasury yields remain stable. There is little room to fall from current levels before resuming the broader uptrend. The US PCE data release today will need a close watch. The German yields have come down as expected from near their resistance. That keeps intact our bearish view. The ECB cut the rates by 25-bps yesterday. The 10Yr GoI remains lower. It may consolidate sideways for some time and then rise eventually.

The US 10Yr (4.53%) and 30Yr (4.78%) yields remain stable. There is limited room on the downside to test 4.5%-4.4% (10Yr) and 4.7%-4.6% (30Yr). Thereafter the broader uptrend can resume, and the yields can target 5% (10Yr) and 5.2% (30Yr) over the medium-term.

The German 10Yr (2.52%) and the 30Yr (2.76%) yields have reversed lower as expected from near their resistance. That keeps intact our bearish view of seeing a fall to 2.4% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.6803%) remains stable. Looks like it can consolidate between 6.6%-6.7% for some time before rising towards 6.8%-6.85% eventually over the medium term.

The Dow Jones rebounded after opening lower at 44548. While holding above 44500, it could advance towards 45100–45250. DAX has moved higher, approaching 21900, after which a potential reversal may be seen. Nifty needs to break above 23400 to confirm a move towards 23700–23800 and negate the downside risk to 22800–22500. Nikkei remains stable around 39500. A sustained move above this level could push it towards 40000; otherwise, a decline towards 39000–38000 remains possible.

The Dow (44882.13, +0.38%) is stuck in between 44500 and 45000 within its 41850-45100 range. There is room to see an extended rise to 45250 while it sustains above 44500.

DAX (21727.20, +0.41%) is heading up towards 21900 as expected. A reversal from 21900 can drag it down to 21400 and lower. Be cautious.

Nifty (23249.50, +0.37%) continues to move up ahead of the budget tomorrow. A strong break above 23400 is needed to negate the fall to 22800-22500 and rise towards 23700-23800. Also, Nifty has to surpass 24000 to become convincingly bullish.

Nikkei (39540.32, +0.07%) is trading around 39500. A sustained hold above this level could drive a rise towards 40000. However, failure to hold above 39,500 may lead to a decline towards 39000–38000. Monitor price action around 39500 for further direction.

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 oil prices are testing their immediate support levels, and a decisive break below this could drive prices down toward $ 73-72 and $ 72-69, respectively. Gold and Silver have both broken to the upside. Gold is encountering significant long-term resistance near the $ 2850/2870, which may limit further upward movement in the near term. Meanwhile, Silver appears poised for bullish momentum, potentially targeting $ 33.5-34.5. Copper and Natural Gas remains bearish, with potential downside targets at $ 4.1 and $ 3.0-2.8, respectively, over the coming weeks.

Brent ($ 76.18) and WTI ($ 73.17) are on the verge of breaking below their immediate support levels. A sustained breach could drag prices further down toward $ 73-72 and $ 70-69, thereby invalidating our previously bullish outlook.

Gold ($ 2849.30) surged to a high of $ 2853 yesterday, as anticipated. The primary long-term resistance lies near the $ 2850/2870 zone, which must be surpassed for a continuation of the bullish trend toward $ 2900-3000. Otherwise, prices may remain confined to a broad range of $ 2850-2700 for the time being.

Silver ($ 32.73) has broken above its immediate resistance and surged to a high of $ 32.83. It is now positioned for further bullish movement toward $ 33.5-34.0.

Copper ($ 4.3135) continues to exhibit a bearish outlook, with a target at $ 4.1 for the near term, as long as it remains below the $ 4.35/37 resistance.

Natural Gas ($ 3.1020) has retraced as expected, and the bearish outlook persists, with targets of $ 3.0-2.8 for the upcoming weeks.

23:30 05:00 JP Unemp
… Exp 2.5% … Expected 2.5% … Previous 2.5%

1:30 07:00 AU PPI
… Exp – … Expected – Previous 0.9%

13:30 19:00 US Personal Income
… Exp 0.1% … Expected 0.4% … Previous 0.3%

13:30 19:00 US PCE Price Index M/M
… Exp 0.2% … Expected 0.2% … Previous 0.1%

13:30 19:00 US Core PCE
… Exp 0.2% … Expected 0.2% … Previous 0.1%

13:30 19:00 CA GDP
… Exp – … Expected -0.1% … Previous 0.3%

DATA YESTERDAY
—————
10:00 15:30 EU Unemp
… Exp 6.3% … Expected 6.3% … Previous 6.2% … Actual 6.3%

10:00 15:30 EU Biz Climate
… Exp 97.2 … Expected 94.1 … Previous 93.7 …Actual 95.2

13:15 18:45 ECB Mtg
… Exp 3.00% … Expected 2.90% … Previous 3.15% … Actual 2.90%

13:30 19:00 US GDP
… Exp – … Expected 2.7% … Previous 3.0%