U.S. President Donald Trump imposed new tariffs on Canada, Mexico, and China effective from Tuesday, levy 25% on Canadian and Mexican imports, with a 10% rate on Canadian energy products and Chinese goods. This led to Dollar Index strengthening past 109 and Euro to break below 1.03. Now, if the index rises further, can test 110-111 on the upside before getting peaked out and if so, Euro would be vulnerable to test 1.01 or even 1.00 on the downside. EURINR can trade within broad range of 91-89 region, until a decisive break is seen. USDJPY needs to rise past 156 to turn bullish again. EURJPY, AUDUSD and Pound have broken below the lower ends of their ranges of 164-160, 0.63-0.62 and 1.26-1.24 and can soon test our targets of 157-156, 0.60 and 1.22 respectively. USDCNY is closed today. USDINR on the NDF is currently trading higher and if the spot opens higher in the onshore markets, a test to 87 can happen much sooner than expected.

U.S. President Donald Trump imposed new tariffs on Canada, Mexico, and China. This led Dollar Index (109.755) to surge significantly, even past our mentioned target of 109. Further if the rise sustains, can get extended to 110 or even 111 before getting peaked out.

EURUSD (1.0226) has slipped below 1.03 on Dolar strength. A decisive break below 1.02 if seen can make it vulnerable to test 1.10 or even 1.00 on the downside, the pair will have to sustain above current levels and rise past it to negate the expected fall.

EURINR (88.8757) is trading lower within its broad range of 91-88 and unless a decisive break is seen on the either side, the range can persist in the near term.

for EURJPY (159.01) has broken below 160 and while the fall continues, can get extended to 157-156 in the near term. Dollar-Yen (155.51) has risen past 155 again but still a strong rise past 156 will be needed to make the outlook further bullish. Watch price action closely around current levels to see whether the rise happens or not.

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 (0.6096) and Pound (1.2261) are also coming off sharply and can soon test our target of 0.60 and 1.22 respectively on the downside. Thereafter, whether the fall extends further or not will have to be seen.

USDINR (86.90) closed at 86.61 on Friday. On the NDF it is currently trading at 86.90. In our weekly edition we had mentioned a caution for rise to 87 and it seems to be working well for now. Further if the Dollar Index continues to rise, our targets of 87 and even higher levels can get tested soon.

The US 10Yr and 30Yr yields have declined slightly. Key support levels are at 4.5%–4.4% for the 10Yr and 4.37%–4.6% for the 30Yr. As long as these supports hold, the 10Yr yield could rise toward 5.0%, while the 30Yr yield may target 5.2% in the medium term.The German yields have fallen as expected and remains bearish for the near term. The 10Yr GoI looks ranged for some time before a rise takes place.

The US 10Yr (4.5280%) and 30Yr (4.7620%) has limited room for downside to 4.5-4.4% for US 10Yr and 4.7-4.6% for US 30Yr. While the supports hold, US 10Yr and US 30Yr are expected to exhibit an upmove towards US 10Yr 5.0% and 5.2%, respectively.

The German 10Yr (2.46%) and the 30Yr (2.71%) continue to decline as expected, with potential for further decreases towards our previously mentioned targets of 2.4% (10Yr) and 2.6% (30Yr).

The 10Yr GoI (6.70%) has risen slightly but the upside looks capped within 6.7250%. While below this a range of 6.7250%-6.6% can hold for some time before rising towards 6.8%-6.85% eventually over the medium term.

The Dow Jones has turned lower, holding the range of 41850-45100. Further, while above 44500, it could rise to 45250. DAX reached a high of 21800.52 and above 21700 and could extend the rise towards 21900 before seeing a turnaround. Nifty attempted a rise to 23700 but failed to sustain it and closed above 23400. If it stays above 23400, a rise towards 23700-23800 looks possible. Nikkei has plummeted by 2.5%, falling to 38600. Further, it could come down to test the support of 38000-37800.

The Dow (44544.66, -0.75%) has declined toward 44500, maintaining the broader range of 41850–45100. If it sustains above 44500, a rise toward 45250 is possible. However, a failure to hold above this level could extend the downside to 44000.

DAX (21732.05, +0.02%) peaked at 21800.2 before closing slightly lower but remains above 21700. A further rise toward 21900 is likely, though a reversal from that level could drag the index down to 21400 or lower.

Nifty (23482.15., -0.11%) touched a high of 23632.45 before closing slightly lower. If it sustains above 23400, further upside toward 23700–23800 is possible. Also, Nifty needs to overcome 24000 to become convincingly bullish.

Nikkei (38612.91, -2.42%) dropped to 38600. While remaining within the 38000–40000 range, it could decline further to test the 38000 support level.

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 are holding above key support levels, with potential for a rise towards $ 78-79 (Brent) and $ 75-76 (WTI). However, a break below support could lead to further declines. Gold has faced resistance near $ 2850, with a possible short-term drop to $ 2800-2750 before a rebound towards $ 2900 takes place. Silver has dropped slightly, with support around $ 31.5, the bullish outlook towards $ 33.0-33.5 looks likely for the near term. Copper and Natural Gas remains bearish towards $ 4.1 and $ 3.0-2.8 respectively for the coming weeks.

Brent ($ 76.25) and WTI ($ 73.95) support levels have held for now. While prices remain above these levels, there is a possibility of a rise towards our previously mentioned targets of $ 78-79 for Brent and $ 75-76 for WTI. On the other hand, a break below these support levels could push prices further down towards $ 73-72 for Brent and $ 70-69 for WTI.

Gold ($ 2833.59) as expected, has tested the long-term resistance near $ 2850, causing a pullback in price. While below this level, a decline towards $ 2800-2750 is likely in the near term, before a potential bounce back to $ 2900.

Silver ($ 32.22) has seen a slight decline. The immediate resistance-turned-support is near $ 31.5. As long as prices stay above this level, we maintain our bullish outlook, targeting $ 33.0-33.5 in the near term.

Copper ($ 4.2275) has fallen as anticipated and may target $ 4.1 on the downside.

Natural Gas ($ 3.2950) has risen above $ 3.25, but our overall outlook remains bearish, with a targets of $ 3.0-2.8 for the coming weeks.

0:30 06:00 JP PMI
… Exp 48.9 … Expected 48.8 … Previous 49.6

1:45 07:15 CN PMI
… Exp 49.7 … Expected 50.6 … Previous 50.5

5:00 10:30 IN Manufacturing PMI
… Exp 56.9 … Expected 58.0 … Previous 56.4

8:30 14:00 CH PMI
… Exp 47.9 … Expected 49.0 … Previous 48.4

9:00 14:30 EU PMI
… Exp -0.1 … Expected – … Previous 45.1

9:30 15:00 UK PMI
… Exp 49.7 … Expected 48.2 … Previous 47.0

10:00 15:30 EU Core CPI Flash Estimate (YoY)
… Exp 2.3% … Expected 2.4% … Previous 2.4%

13:30 19:00 CA PMI
… Exp – … Expected – … Previous 52.2

14:00 19:30 US Manufacturing ISM
… Exp 49.2 … Expected 49.3 … Previous 49.3

DATA FRIDAY
—————
23:30 05:00 JP Unemp
… Exp 2.4% … Expected 2.5% … Previous 2.5% …Actual 2.4%

1:30 07:00 AU PPI
… Exp – … Expected 1.0% … Previous 0.9% …Actual 0.8%

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

13:30 19:00 US PCE Price Index M/M
… Exp 0.2% … Expected 0.2% … Previous 0.1% …Actual 0.3%

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

13:30 19:00 CA GDP
… Exp – … Expected -0.1% … Previous 0.3% …Actual -0.2%