Euro plunged after the ECB raised rates by 25bps and have hinted at a possible pause in further rate hikes while reducing their growth projections for 2023-2024. Euro can test 1.06, taking Dollar Index towards 106 while Aussie and Pound have scope to reverse from 0.65 and 1.24 respectively. USDJPY can rise to 148 while EURJPY can bounce back from 156. USDCNY can test 7.22/20 while below 7.27. USDRUB can rise to upper end of 92.50-98 range but if it would break higher would be interesting to see. EURINR trades above 88 and could remain within 88-89.50 for the near term. USDINR can trade within 83.10-82.90/80 for now but can eventually move up to 83.25/30 next week.

EURUSD (1.0645) fell sharply below 1.07 as expected, after the ECB raised rates by 25bps and hinted at a possible pause hereafter. Growth projections have been revised lower for this year and the next. A fall to support at 1.06 is possible for Euro before a bounce is seen in the medium term.

Dollar Index (105.318) has moved above 105 as expected and has scope to rise to 106 on the upside before coming off from there in the longer run.

EURJPY (156.93) has fallen sharply to almost test the lower end of the 159-156 range. A bounce back from 156 can be seen soon.

Dollar-Yen (147.45) can rise within 146-148 range and a break above 148 is needed to turn further bullish towards 149. Watch price action near 148.

USDCNY (7.2568) has fallen sharply, breaking the trend support at 7.27. Now sustained trade below 7.27 can trigger a fall to 7.24/20.

Aussie (0.6460) has scope for a rise towards 0.65 which needs to break to head towards 0.66. Else a fall from 0.65 may take it back towards 0.64/63.

Pound (1.2420) has immediate support at 1.24 from where if the spot fails to bounce back, could be vulnerable to a sharp fall towards 1.22/20.

USDRUB (96.99) is rising well towards 97/98. A break above 98 is needed to be seen and sustained for the pair to move up further towards 99/100. Else a fall from 98 would keep the pair within 98-92.50 region for the medium term.

USDINR (83.0350) may hold within 83.10-82.90/80 for a few more sessions before moving up to 83.25/30.

EURINR (88.3647) has scope to eventually fall to 88 where it can pause for a while and trade within 88-89.50 region for some time. Failure to hold above 88 would trigger a sharper fall for the medium term.

The US Treasury yields have bounced back well again. Looks like the expected dip to test the support may/may not happen. However, the big picture remains bullish to see more rise going forward. The German yields have declined sharply after the ECB meeting outcome yesterday. Supports can limit the downside and keep the overall uptrend intact in the yields. The ECB raised the rates by 25 bps but indicated that the rate hike cycle has reached a peak for now. So, the ECB may pause for some time going forward. The 10Yr and 5Yr GoI have declined sharply below their intermediate supports contrary to our expectation. A crucial support is there which should hold to keep our bullish view intact. The price action today will be very important.

The US 10Yr (4.28%) and the 30Yr (4.38%) yields have bounced back again. The broader outlook is bullish 4.4% (10Yr) and 4.4%-4.5% (30Yr) first and then 4.5%-4.6% (10Yr) and 4.6%-4.7% (30Yr) eventually. But will a dip to 4.1%-4% (10Yr) and 4.2%-4.1% (30Yr) happen before that is not clear.

The German 10Yr (2.59%) and the 30Yr (2.72%) yields have come down sharply. But support at 2.5% (10Yr) and 2.6% (30Yr) can hold and keep the broader uptrend intact to see 3%-3.1% on the upside.

The 10Yr GoI (7.1297%) and the 5Yr GOI (7.1198%) have declined sharply below 7.15% – an intermediate support. Both has a crucial support at 7.1% which has to hold to keep ouu bullish view intact of seeing a rise to 7.35% (10Yr) and 7.3% and 7.45% (5Yr). Else both can fall to 7% and lower. The price action today is very crucial.

Dow Jones and Nikkei have risen sharply above the resistance at 34700 and 33000 respectively and looks bullish to move up further from here. DAX has started to rise within the 15500-16100 range. Nifty is heading up towards 20200-20400 in line with our expectations. Shanghai appears range bound within 3100-3150.

Dow (34907.11, +0.96%) has risen sharply above 34700. It can now breach 35000 and rise to 35300-35500 first and then 36000 eventually. The chances of the fall to 34400-34200 stands reduced.

DAX (15805.29, +0.97%) has started to rise within the 15500-16100 range. While this rise sustains, it can rise towards the upper end of the range.

Nifty (20103.10, +0.16%) is heading up towards 20200-20400 in line with our expectation. The price action thereafter will need a close watch.

Nikkei (33617, +1.22%) has risen sharply, breaking above 33000-33500. While above 33000, the view is bullish to rise towards 34000 or even higher towards 35000.

Shanghai (3130.28, +0.12%) appears range bound within 3100-3150. While it remains below 3150, a fall towards 3075/3050 cannot be negated.

Brent and WTI is on their way to test key resistance at $ 95 and $ 92 respectively. Gold and Silver fell to 1921.70 and 22.56 yesterday after the ECB raised the interest rate by 25bps and signals that this could be the end of rate hike cycle. However, the support at 1920 (Gold) and 22.50 (Silver) have held well and produce a bounce back from there. Copper has scope to test its immediate resistance at 3.86-3.90. Natural gas is facing rejections from 2.80 but outlook will remain bullish while above the support at 2.5.

Brent ($ 94.31) continues to rise and has scope to test $ 95 before a corrective dip can be seen from there. A break above $ 95, if seen, can extend it rise to $ 96.

WTI ($ 90.92) has risen further $ 90. View is bullish to see a test of $ 92 before a fall back can be seen from there. If it happens to break above $ 92, it could see an extended rise to $ 93-94.

Gold (1936.70) has bounced back above 1930 as the support at 1920 has held well as expected. While above 1920, a test of interim resistance at 1945 looks possible. A further break above it is needed to open doors towards 1970-1975.

Silver (23.15) tested 22.56 yesterday and has risen back from there. The support mentioned at 22.50 seems to have held well. While it remains above 22.50, a rise towards 23.50-24 can be seen.

Copper (3.8385) has risen well above 3.80. A test of immediate resistance at 3.86-3.90 looks likely. Thereafter we have to see if it falls back towards 3.75-3.70 or move up further towards 3.95.

Natural Gas (2.6960) is lacking strength to rise past 2.8. But while above the support at 2.5, bias is positive for a break above 2.8 and rise towards 3.0.

9:00 14:30 EU Trade Bal
Expn – …Expected 13.5 …Previous 12.5

9:00 14:30 IN Trade bal
Expn -22.8 …Expected -21.0 …Previous -20.7

13:15 18:45 US Industrial Production
Expn 0.3% …Expected 0.2% …Previous 1.0%

13:15 18:45 US Capacity Utilization
Expn 79.3% …Expected 79.3% …Previous 79.3%

DATA YESTERDAY:
————-
1:30 7:00 Australia Labour Force
Expn 33.3K …Expected 25.9K …Previous -14.6K …Actual 64.9K

6:30 12:00 IN WPI
Expn -1.3% …Expected -0.6% …Previous -1.36% …Actual -0.52%

11:45 17:15 ECB Mtg
Expn – …Expected 4.25% …Previous 4.25% …Actual 4.50%

12:30 18:00 US PPI
Expn 0.2% …Expected 0.4% …Previous 0.4% …Actual 0.7%

12:30 18:00 US PPI ex Food & Energy (MoM)
Expn 0.2 …Expected 0.2 …Previous 0.4 …Actual 0.2

12:30 18:00 US Retail Sales (MoM)
Expn 1.1% …Expected 0.2% …Previous 0.4% …Actual 0.6%