Dear Reader,

Global Markets:

The Dollar was trading with soften note on weaker US data with December Conference Board Consumer confidence slumping to 52.5 vs. 54.3 previously. Looking Ahead, Weekly Jobless Claims are forecast at 415k vs. 420k previously and Crude Oil Inventories at -2.8m vs. -5.3m previously. The Euro rose to above 1.3200 levels. The Yen hitting a seven-week low to below 82 levels and traded at 81.43, despite protests from Japanese officials about the recent strength in the Yen. The Sterling bounced with the rest of the majors. The AUD traded with a 28-year high of 1.0186 with weak USD to push the commodity currency higher. The Chinese central bank set Yuan on Thursday at a record high of 6.6229 and a rise in the Chinese Yuan after China's rate hike last Saturday is supporting Asian currencies, including the yen.

Technical Highlights:

EUR/USD: The Euro is currently trading at 1.3233 levels and it had touched low of 1.3108 levels and high of 1.3259 levels yesterday. German Prelim CPI m/m came at 1.0% vs. 0.1% previously. Immediate support comes at 1.3055 levels (21days Daily lower Bollinger) and next 1.2970, while resistance comes at 1.3335 levels (200 Daily EMA) and next 1.3370 levels (100 Daily EMA). EURINR (59.41) exporters hold for covers and importers cover for Jan at around 59.25 or below levels. EUR/INR is likely to trade in the range of 59.30 - 59.55 today. Short term and Medium term: Bearish.

GBP/USD: The Pound is currently trading at 1.5505 levels and it had touched low of 1.5361 yesterday. Immediate resistance comes near 1.5565(21 Daily EMA) and next 1.5620 levels (200 Daily EMA), while support comes at 1.5280. GBPINR (69.64) Exporters hold for covers and importers cover for Jan at 69.50 levels or below. GBPINR is likely to trade in the range of 69.50 - 69.80 levels today. Short Term and Medium Term: Neutral to slight Bearish.

USD/JPY: USD/JPY is currently trading at 81.46 levels. It fell yesterday despite protests from Japanese officials about the recent strength in the Yen. Immediate strong resistance is at 82.30 levels (21 H4 EMA) followed by 82.85 (55 H4 EMA). Overall it had traded with a low of 81.29 (7 week low) and a high of 81.52 yesterday. Yen Exporters are suggested to book Jan and Feb month's exposure around 81 levels and Yen Importers can cover their exposure near 84 levels. Medium Term: Maintain Bearishness for the pair.

AUD/USD: The Aussie is currently trading at 1.0167 levels. Overall it had made a low of 1.0102 and a high of 1.0198(28 year high) yesterday. It is making fresh highs above 1.0180, supported by gains in commodity prices and Australian 10-years yields rose. Immediate support comes at 0.9973 levels (21 Daily EMA) followed by 0.9868 levels (55 Daily EMA) while immediate resistance is at 1.0198 levels (High of 29.12.2010). 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 1413.15 levels after breaking its resistance of 1410 levels as the demand for safe heaven assets increased. Overall the yellow metal had made a low of 140.70 and a high of 1414.06. 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 79.69 levels after the U.S. treasury yields tumbled. Looking ahead today, Unemployment Claims expected better at 416K vs. 420K previous, Pending Home Sales m/m and Crude Oil Inventories at -2.8m vs. -5.3m previously. There is a support at 78.83 levels followed by 79.20 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.