Dear Reader,

Global Markets:

The Dollar was slightly higher with some good economic data underpinning investor sentiment. December Manufacturing PMI jumped to 57.0 as expected. Looking Ahead, FOMC Minutes released from December Meeting. The Euro was managed to bounce back some losses against the dollar on news that China will support Spanish debt going into the future also helped. Looking ahead, German Unemployment Change forecast at -12k vs. -9 previously. The Yen was fell 0.2 percent to 81.93, having pulled up from an eight-week low of 80.93. The Sterling was found at 1.5490 but the bounce was limited. The Australian dollar fell 0.2 percent to $1.0146, retreating from a 28-year peak around $1.0257 set on Friday.

Technical Highlights:

EUR/USD: The Euro is currently trading around 100 Daily EMA levels of 1.3355 levels after it had crossed the 200 Daily EMA levels of 1.3335 yesterday. Looking ahead today, German Unemployment Change expected at -12K vs. -9K previous. Immediate support comes at 1.3255 levels (21 daily EMA) followed by 1.3045 levels (lower Bollinger) and next 1.2970, while resistance comes at 1.3405 levels (Upper Bollinger). EURINR (59.69) exporters hold for covers and importers cover for Jan at around 59.20 or below levels. EUR/INR is likely to trade in the range of 59.55 - 59.85 today. Short term and Medium term: Bearish.

GBP/USD: The Pound is currently trading at 1.5499 levels and it had touched low of 1.5432 and a high of 1.5562 yesterday. Looking ahead due today, Manufacturing PMI forecasted 57.3 vs. 58 previous and Net Lending to Individuals m/m expected lower at 0.9B vs. 1.3B previous. Immediate resistance comes near 1.5550 levels (21 Daily EMA) followed by 1.5615 (200 Daily EMA) while support comes at 1.5280(lower Bollinger). GBPINR (69.26) Exporters hold for covers and importers cover for Jan near 69.10 levels or below. GBPINR is likely to trade in the range of 69.15 - 69.45 levels today. Short Term and Medium Term: Neutral to slight Bearish.

USD/JPY: USD/JPY is currently trading at 81.88 levels. Overall it had traded with a low of 81.21 and a high of 81.95 yesterday. Immediate strong resistance is at 82.55 levels (21 Daily EMA) followed by 82.90 (55 Daily EMA). Yen Exporters are suggested to book Jan and Feb month's exposure around 81 levels and Yen Importers had already been advised to cover their exposures near 84 levels. Medium Term: Maintain Bearishness for the pair Target 80 and below.

AUD/USD: The Aussie is currently trading at 1.0140 levels. Overall it had made a low of 1.0122 and a high of 1.0212. AIG Manufacturing Index came at 46.3 vs. 47.6 previous and Commodity Prices y/y due today. Immediate support comes at 1.0040 levels (21 Daily EMA) followed by 0.9910 levels (55 Daily EMA) while immediate resistance is at 1.0256 levels (High of 31.12.2010). Exporters are suggested to book Jan and Feb month's exposure at around 1.0200 levels, and Importers can cover their exposure on dips. Medium term: Bullish.

Gold: Gold is currently trading at 1416.40 levels. Overall the yellow metal had made a low of 1412.20 and a high of 1423.95. Immediate resistance is at $1,431 levels while immediate support comes near $1400 followed by $1370 levels. Buying on dips is recommended. Medium term: Maintain bullishness.

DOLLAR INDEX: Dollar Index is currently trading at 79.14 levels after breaching the 79.20 support levels. ISM manufacturing PMI came in as expected at 57, up from previous 56.6. This was the highest level in 7-months. Construction spending m/m also rose to 0.4%, better than expected at 0.2%. Looking ahead due today, Factory Orders m/m and Total Vehicle Sales. There is a support at 78.83 levels and resistance is at 80.52 and next 81.50 levels. Holding above 80.50 would be quite bullish.

DISCLAIMER
These views/ forecasts/ suggestions, though proffered with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice. Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.