FED kept rates unchanged at 5.5% as per market expectations but has signaled one more rate hike this year. Dollar Index is headed towards 106 while Euro is headed to test 1.06. Both levels on the Dollar Index and Euro are crucial and needs a reversal soon. Aussie and Pound look bearish and could show strong downside momentum on a break below 0.64 and 1.23 respectively. Else a bounce if seen from these levels could give some stability for a few sessions. EURJPY and USDJPY have supports near 157 and 148 which need to hold to produce a bounce else can trigger a sharp fall going forward. USDCNY can test 7.30/35 while USDRUB can trade within 94-98 range. EURINR can test support at 88 from where a bounce is expected. USDINR can rise back to 83.20/30 while support near 82.90-83.00 holds well.

Dollar Index (105.662) has resumed upmove targeting 106 with support holding well at 104.50.

EURUSD (1.0621) has broken below 1.0650 and could be headed towards 1.06 which is a crucial near term support. Failure to bounce from 1.06 could be an initial signal of a crucial downside breakout which we will have to keep a close watch on. See price action near 1.06 for the next 2-sessions. A bounce from 1.06 would be preferred.

EURJPY (157.50) has fallen from 158.45 and could test support at 157 from where a bounce is needed for the range of 157-158.50 to remain intact for the near term. A breakout on either side of the mentioned range will also be seen soon.

Dollar-Yen (148.22) is has dipped slightly but has immediate support at 148 which if holds can produce a bounce towards 149, given the rise in Dollar Index and the positive directional correlation it has with USDJPY.

USDCNY (7.2999) needs to sustain break above 7.30 to head towards 7.35/38 soon. View is bullish.

Aussie (0.6406) has plunged over the last 2-sessions, falling from 0.6511 to current levels. Failure to bounce from 0.64 will drag it lower to 0.6350 in the next few sessions.

Pound (1.2310) looks bearish and a break below 1.23 will trigger further fall towards 1.22 in the coming 1-2 weeks. Trend looks strong to the downside.

USDRUB (96.0075) could hold within the immediate range of 98-94 unless a break on either side is seen.

USDINR (83.0775) fell sharply to close at 83.0775 but tested 82.90 on the NDF yesterday before the FED rate announcement. Thereafter, the NDF rates have again risen to quote at 83.1760 just now as the Dollar shows strength overnight post the FED policy statement. The Rupee may depreciate again today to target 83.20/30 while support near 82.90-83.00 may hold well for the near term.

EURINR (88.3987) can test support at 88 and could bounce back in the next few sessions. Failure to hold above 88 would be bearish in the longer run.

The US Treasury yields have surged especially at the near end after the US Fed meeting last night. The yields are likely to see an extended rise from here before the expected correction sets in. The Fed left the rates unchanged at 5.25-5.5 per cent and also kept the median fund rate forecast at 5.6% for this year. This means one more rate hike is possible for the rest of the year. However, for 2024, the Fed has left room only for a 50-bps rate cut, down from the 100-bps cut projected in its earlier forecast in June indicating that the rates can remain higher for long time. The German yields have dipped but can bounce back and keep the broader uptrend intact. The 10Yr and 5Yr GoI can oscillate inside a range for some time before resuming their upmove.

The US 10Yr (4.44%) and the 30Yr (4.47%) yields have risen well above 4.4%. While this sustains, the rise to 4.5%-4.6% (10Yr) and 4.6% (30Yr) can happen straight away and then the expected correction could happen.

The German 10Yr (2.70%) and the 30Yr (2.83%) yields have dipped slightly but are likely to be short-lived. The broader picture remains bullish to see 3%-3.1% on the upside. Support at 2.5% (10Yr) and 2.6% (30Yr) can limit the downside.

The 10Yr GoI (7.1733%) and the 5Yr GOI (7.1649%) have dipped further. Both the yields can oscillate between 7.1% and 7.25% for some time before resuming the uptrend targeting 7.35% (10Yr) and 7.3% and 7.45% (5Yr) eventually.

Dow Jones has come down sharply and can revisit the 34300-34200 support zone. Nikkei and Nifty have declined, breaking below their support at 33000 and 20000 and have scope to come down further in the near term. DAX remains well inside the 15500-16100. Shanghai has broken below the lower end of the 3100-3150 range and has room to come down more from here.

Dow (34440.88, -0.22%) has come down sharply from the high of 34776. The 34300-34200 support zone can be revisited. Need to wait and watch if the Dow is bouncing back from there or extending the fall to 34000-33800.

DAX (15781.59, +0.75%) remains well inside the 15500-16100 range and is now attempting to rise within it. We will have to wait for the range breakout to get clarity.

Nifty (19901.40, -1.15%) has declined, breaking the support at 20000. There is room to test 19800-19759 after which it will have to be seen if the Nifty is reversing higher again and resuming the uptrend or extending the fall up to 19500.

Nikkei (32587, -1.32%) has fallen sharply below 33000. While below 33000, view is bearish to see a fall to 32500-32300 before a bounce back can happen.

Shanghai (3094.55, -0.45%) has broken below the lower end of the 3100-3150 range. View remains bearish for a fall towards towards 3075/3050.

Brent and WTI continues to dip and is likely to remain bearish for the near term. Gold and Silver tested their resistance zone yesterday and has fallen back sharply from there on Fed hawkish tone in its monetary policy meeting. Fed expects one more rate hike in 2023. Copper has scope to test immediate support at 3.70 before a bounce back can happen. Natural gas downside seems limited to 2.6/2.5.

Brent ($ 92.82) has come down below $ 93. A further fall towards $ 91-90 can be seen.

WTI ($ 88.92) has declined below $ 89. View remains bearish for a fall towards $ 88-86.

Gold (1946.80) tested the resistance at 1965-1970 zone yesterday and has fallen back sharply below 1950 today. It can fall towards 1940-1935 before a pause can be seen. A further break below 1935, if seen, can lead to a fall to 1920.

Silver (23.41) rose sharply to 23.88 yesterday before coming off from there to trade below 23.50. The level of 23.90-24 is a decent resistance. While below which, a fall towards 23-22.80 can be seen.

Copper (3.7380) remains subdued and has scope to test the support at 3.70. If 3.70 holds, we can expect a range of 3.70-3.85/90 to persist for some time.

Natural Gas (2.73) is coming down towards 2.70. However, downside seems to be limited to 2.6-2.5. While above 2.6/2.5, view is bullish for a rise towards 3.0. Overall a range of 3.0-2.5 could persist over the medium term.

8:30 14:00 SNB Mtg
Expn – …Expected 2.00% …Previous 1.75%

11:00 16:30 BOE Mtg
Expn – …Expected 5.50% …Previous 5.25%

11:00 16:30 UK BOE Minutes
Expn – …Expected 8-0-1 …Previous 8-0-1

12:30 18:00 US Philifed Index
Expn – …Expected -0.4 …Previous 12.0

12:30 18:00 US Current Account Balance
Expn -201 …Expected -220 …Previous -219

14:00 19:30 US Existing Home Sales
Expn 3891K …Expected 4100K …Previous 4070K

DATA Yesterday:
————-
6:00 11:30 UK CPI Y/Y
Expn 7.6% …Expected 7.1% …Previous 6.9% …Actual 6.7%

18:00 23:30 US FOMC Meeting
Expn – …Expected 5.50% …Previous 5.50% …Actual 5.5%