FED raised rates by 25bps, in line with the market expectation. It has hinted at a 50-50 chance of either keeping the rate stable or going with another 25bps hike in its Sep-23 meeting after looking at the data releases. The FED officials are no more looking at a recession and state a “moderate pace” of expansion in the economy. The Dollar Index has fallen sharply breaking below 101 again and probably indicating a resumption of fall while Euro trades above 1.11. USDCNY has fallen but needs to remain above 7.10 to prevent a fall to 7.05/00. USDRUB trades within the 89-92 range. Aussie and Pound are moving up towards 0.6850 and 1.30-1.31 respectively. EURJPY and USDJPY ae falling sharply and failure to sustain above 155 and 139 can drag them lower in the next 1-week. EURINR has moved up slightly while above 90 and can rise further towards 91.50. USDINR could inch lower again towards 81.70 or remain stable below 82.
Dollar Index (100.79) has fallen back below 101 and could have fair scope to fall towards 100-99.50 over this week and the next. Downtrend could remain while below 102.
EURUSD (1.1104) has risen well on weakness in the US Dollar and while above 1.10, there could be fair chances of seeing a rise towards 1.12.
EURJPY (155.05) trades at the lower end of the 155-158 range mentioned over the last few days. If the pair falls below 155, view would be bearish for a further decline towards 154-152.
Dollar-Yen (139.65) is falling towards the lower end of the 42-139 range mentioned yesterday. A bounce from 139 is needed to prevent a further dip to 138/137.
USDCNY (7.1271) has fallen sharply and if it breaks below 7.10, lower target of 7.05/00 would come into focus. The pair will have to sustain above 7.10 to prevent such a fall but that would be difficult while the Dollar remains weak.
Pound (1.2960) is moving up towards 1.30/31
Aussie (0.68) has risen back to 0.68 and can move up further on continued Dollar weakness in the next few sessions.
USDRUB (89.9937) is falling towards the lower end of the 89-92 range which is likely to continue for a few more days.
USDINR (82.00) continued to move up yesterday to close at 82 but may inch lower today on Dollar weakness. A range of 82.00-81.80/70 could hold for the day.
EURINR (90.9699) is slowly moving up and while above support near 90-90.50, view could be bullish for an initial target of 91.50.
The US Treasury yields are mixed after the US Fed meeting outcome. The Fed raised the interest rates by 25-bps in line with the market expectation. With no surprise from the Fed, the yields can fall if they fail to gain momentum from current levels. The German yields have risen sharply contrary to our expectation to fall within their range. We will have to wait and see if this bounce is sustaining or not. The 10Yr and 5Yr have dipped but have supports coming up. While the supports hold, the yields have good chances to rise back again.
The US 10Yr (3.87%) Treasury yield has dipped while the 30Yr (3.97%) has moved up further. The 30Yr is heading up towards 4%-4.1% as expected. The 30Yr has to rise back immediately to keep alive the chances of seeing 4% and avoid falling below 3.8%.
The German 10Yr (2.48%) and the 30Yr (2.51%) have risen back contrary to our expectation to fall. The 10Yr is just below the upper end of its 2.1%-2.5% range. Need to see if it can break the range on the upside. The 30Yr has room to rise within its 2.1%-2.65% range.
The 10Yr GoI (7.0965%) has dipped below 7.1%. While above 7.08%, it can break 7.1% and rise to 7.2%. Resistance above 7.1% is at 7.14%.
The 5Yr GOI (7.0780%) has come down but has support at 7.07% and 7.05%. While above these supports the bias is positive to break 7.1% and rise to 7.15%-7.2%.
Dow continues to move up and has scope to break above the resistance at 35550. DAX remains stuck between 16000-16250. Nifty has rebounded and while above 19700 it can rise further on the upside. Nikkei is to be range bound for some time. Shanghai has risen sharply towards it resistance at 3250. Need to see if it breaks above 3250 or not.
Dow (35520.12, +0.23%) continues to move up. The chances are looking high for it to breach 35550 and rise to 34800-34600.
DAX (16131.46, -0.49%) tested 16000 but has risen back sharply. For now, the 16000-16250 range is intact. Bias is positive to see a break above 16250 and a rise to 16400-16500.
Nifty (19778.30, +0.5%) has risen back. While it sustains above 19700, it can break 19800 and rise to 20000 again. In that case the fall to 19500 will get negated.
Nikkei (32716.48, +0.15%) continues to hover above 32500. View is mixed for now. We expect it to trade sideways between 33000-32000 for some time.
Shanghai (3239.52, +0.51%) has rebounded towards the resistance at 3250. A break above it is needed to open doors toward 3275-3300. Else it may continue to trade sideways within a broad range of 3250-3150.
Brent and WTI have scope to test their key resistance before a reversal can be seen. Gold and Silver have broken above their resistances at 1970/1980 and 25 respectively and can now move up further on the upside. Copper can see a test of key resistance at 4.00 in the near term. Natural Gas may remain range bound within 2.65-2.80 for a few more sessions.
Brent ($ 83.68) is hovering below $ 83.90. Bias is positive for a test of $ 85 before a reversal sets in.
WTI ($ 79.61) is consolidating below $ 80. We retain our bullish view for a rise towards $ 82-83. Thereafter we might witness a corrective dip from there.
Gold (1980.70) has broken above the resistance at 1970-1980. It can now move up towards 2000 or even higher to 2025.
Silver (25.25) has risen sharply, breaking above resistance at 25. While this break sustains, a rise towards 25.50-26 is possible.
Copper (3.9385) has bounced back towards 3.95 from a low of 3.8765. A break above 3.95 could see a target of 4.00. If 4.00 holds, a fall back towards 3.85 might be possible.
Natural Gas (2.6840) has dipped but sustains above the support at 2.65. While above 2.65, view would remain the same to see a sideways trade within 2.65-2.80. Below 2.65, next support comes at 2.60. As long as it holds above 2.65/2.60, there is scope for an eventual break above 2.8 and rise towards 2.9-3.0 over the medium term.
12:15 17:45 ECB Mtg
Expn – …Expected 4.25% …Previous 4.00%
12:30 18:00 US Durable Goods Orders
Expn 1.2% …Expected 0.9% …Previous 1.7%
12:30 18:00 US GDP
Expn – …Expected 1.7% …Previous 2.0%
1:30 7:00 AU CPI
Expn 6.6% …Expected 6.2% …Previous 7.0% …Actual 6.0%
14:00 19:30 US New Home Sales
Expn 717K …Expected 722K …Previous 763K …Actual 697K
18:00 23:30 US FOMC Meeting
Expn – …Expected 5.50% …Previous 5.25%