The FED held rates in yesterday’s policy meeting and iterated that they are not thinking or even discussing of any rate reductions now which could suggest that there could be a possibility of rate hikes but with the economy now signaling balance and moderately better performance, we will have to wait and watch. Markets have been volatile as expected. Dollar Index and Euro may trade within 107-106 and 1.05-1.07 region for some time. EURJPY can fall to 158 before pausing while USDJPY can fall to 149 before bouncing back again. Pound can rise to 1.22-1.2250 while immediate support holds at 1.21. USDCNY may remain stuck around 7.30. Aussie is bullish towards 0.6450. USDRUB can fall to 90 on a break below 92. USDINR can attempt to break past 83.30 to move up towards 83.50/60. Failure to sustain above 83.30 will drag it back into the broad 83.30-83.00 region. EURINR can remain ranged within 89-87.50.

Dollar Index (106.342) rose to 107.113 post the FOMC overnight but has managed to fall back from there. While below 107, we may expect an initial decline towards 106. An immediate range of 107-106 may hold well for now. Later, if a break past 107 is seen again, we may allow for further bullishness.

EURUSD (1.0596) fell to 1.0517 before bouncing back. While above 1.05, we may expect trade within 1.05-1.07 region.

EURJPY (159.15) continues to extend the corrective fall seen from levels just below 161. A fall to 158 can be possible before pausing and turning around.

Dollar-Yen (150.20) has also fallen sharply from 152 and could extend to a maximum of 149 before bouncing back to higher levels again.

USDCNY (7.3173) remains stuck above 7.30 with no volatility seen over the past 14-15 sessions. Unless a sharp move is seen it may remain stable at current rates.

Aussie (0.6435) has risen sharply extending towards 0.6450 as mentioned yesterday. It would be important to see if it can break past 0.6450 and extend higher or falls back towards 0.64-0.63 again.

Pound (1.2193) can test 1.22-1.2250 before falling back to 1.21. Immediate support at 1.21 seems to be holding well for now.

USDRUB (92.3633) ha dipped slightly and could have fair scope of falling below 92 towards 90 before a reversal is seen.

USDINR (83.2950) has been slowly moving up paise by paise over the last few sessions almost close to testing the crucial resistance at 83.30 which if breaks past can trigger a sharp rise to 83.50/60 initially.

EURINR (88.1859) has bounced well from 87.50 and could be headed towards 89 in the near term.

The US Treasury yields have declined sharply as the US Federal Reserve left the rates unchanged in line with market expectation. The yields can now fall further to test their range supports and then bounce back again to keep the range intact. The German yields have also dipped further. There is room to test their supports before resuming their overall uptrend. The 5Yr and 10Yr GoI remain stable within their range.

The US 10Yr (4.72%) and the 30Yr (4.91%) yields have declined sharply. The 10Yr is below 4.8%, so the 4.6%-5% range can be in play now. The 5Yr can be in the range of 4.8%-5.1%. The yields can test the lower end of their range.

The German 10Yr (2.76%) and the 30Yr (3.07%) have dipped further. Supports are at 2.7% (10Yr) and 3% (30Yr) which can be tested. While they hold, the view remains bullish to 3% (10Yr) and 3.2%-3.25% (30Yr) on the upside.

The 10Yr GoI (7.3599%) and the 5Yr GOI (7.3531%) yields remain stable within their 7.3%-7.4% and 7.3%-7.4%/7.45% range respectively. While the 5Yr looks mixed, the bias on the 10Yr is bullish to break 7.4% and rise to 7.45% and higher.

Dow Jones is coming close to its resistance, which if holds, can produce a reversal from there. Nikkei has risen sharply above its resistance and may look to target further upside. DAX has scope to test its resistance at 15000-15200. Nifty outlook is bearish while below the resistance at 19200. Shanghai is hovering below its resistance at 3050 and might fall if its stays 3050.

Dow (33274.58, +0.67%) coming close to its resistance at 33400. A reversal from the 33400-33500 region can drag it down to 33000-32500 again.

DAX (14923.27, +0.76%) has risen well. Resistance at 15000-15200 can be tested before revisiting 14800-14700 levels and then 14200-14000 on the downside over the medium-term.

Nifty (18989.15, -0.47%) is coming down towards 18700-18600 in line with our expectation. 19100-19200 can be an immediate resistance.

Nikkei (31934.50, +1.05%) has broken sharply above the resistance at 31800. While this break sustains, a further rise towards 32500 can be seen. This has negated a fall towards 30000.

Shanghai (3024.24, +0.04%) is hovering below the resistance at 3050. A strong break above it is needed to move up towards 3100. Else a fall towards 3000-2975 cannot be negated.

Brent and WTI has bounced back slightly from their key support but needs to rise past their resistance to reduce the downside pressure. Gold and Silver have rise back as the support at 1980 and 22.50 has held well. Fed kept the interest rate unchanged at 5.5% which seems to have lend some support to crude prices and precious metals. Copper has risen back towards its resistance at 3.70. Needs to see if it breaks above 3.70 or not. Natural gas is to be range bound within 3.30-3.70 for a while.

Brent ($ 85.45) has bounced back slightly from the support at $ 84. It has to sustain above $ 84 and rise past $ 87 to reduce the downside pressure and to move towards $ 89-90. Else it will be vulnerable to a dip towards $ 83-82.

WTI ($ 81.27) has bounced back a bit from the support at $ 80. The bounce needs to sustain and rise above $ 83-84 to ease the downside pressure. Else it will be vulnerable to a further fall towards $ 78.

Gold (1994.10) has bounced back slightly from a low of 1978. It has to sustain above 1980 to keep our bullish view intact for a break above 2020 and rise towards 2025-2030. Else a dip towards 1960-1950 can be seen.

Silver (23.07) has rebounded sharply above 23 from a low of 22.65. This keeps the 22.50-24 range trade intact.

Copper (3.6725) has risen back towards the resistance at 3.70. Only a strong break above 3.70, if seen, can trigger a rise towards 3.80. Else a dip towards 3.60 cannot be negated.

Natural Gas (3.4910) lacks a follow through rise above 3.60. A sustained break above 3.60-3.70 is needed to open doors towards 4.0. An immediate range of 3.30-3.70 may hold for a while.

0:30 6:00 Australia Trade Balance
Expn – …Expected 9.6 …Previous 9.6

7:30 13:00 CH CPI
Expn – …Expected 1.7 …Previous 1.6

9:00 14:30 EU PMI
Expn – …Expected 43.0 …Previous 43.4

12:00 17:30 BOE Mtg
Expn – …Expected 5.3% …Previous 5.3%

12:00 17:30 UK BOE Minutes
Expn – …Expected 2-0-7 …Previous 4-0-5

DATA YESTERDAY:
————–
22:30 4:00 AU PMI
Expn – 18.9 …Expected – …Previous -12.8 … Actual – 20.9

0:30 6:00 JP PMI
Expn 48.2 …Expected 49.0 …Previous 48.5 … Actual 48.7

1:45 7:15 CN PMI
Expn 50.5 …Expected 50.8 …Previous 50.6 … Actual 49.5

5:00 10:30 IN Manufacturing PMI
Expn 57.6 …Expected – …Previous 57.5 … Actual 55.5

8:30 14:00 CH PMI
Expn – …Expected 45.0 …Previous 44.9 … Actual 40.6

9:30 15:00 UK PMI
Expn 41.8 …Expected 45.2 …Previous 44.3 … Actual 44.8

12:15 17:45 US ADP Emp
Expn – …Expected 149K …Previous 89K … Actual 113K

13:30 19:00 CA PMI
Expn – …Expected – …Previous 47.5 … Actual 48.6

14:00 19:30 US Manufacturing ISM
Expn 48.9 …Expected 49.0 …Previous 49.0 … Actual 46.7

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