Sharp decline in the Dollar Index after the FOMC meeting where the FED kept rates unchanged but has indicated an end of rate hike cycle and three rate cuts in 2024. Dollar index has plunged to levels below 103, support levels of 102.50-102-101.50 come into the picture again. Euro is headed towards 1.0950-1.0975 from where a rejection can be possible. EURJPY and USDJPY have declined along with Dollar Index while Aussie, Chinese Yuan and Pound have strengthened against the Dollar. But we need to watch if this movement would sustain for long. USDRUB looks bearish. EURINR has risen well from 89.50 itself and could be headed towards 91.50 while the USDINR could fall within the 83.40-83.25 range as the RBI may not allow much appreciation of the Rupee beyond 83.25/20. Volatility in the FX markets could continue as we have the BOE and ECB policy meetings due today.

Dollar Index (102.562) has fallen sharply below 103 and could be bearish towards 102-101.50 if it breaks below 102.50. However, 101.50-102 is likely to be a decent support that could push the index back up within a week’s time.

EURUSD (1.0905) has risen well from trend support on the daily chart and could be headed towards near term resistance at 1.0950-1.0975 before a reversal is seen from there. A sustained break above 1.10 is needed for it to turn bullish in the longer run. Else a fall back from mentioned resistance can be seen back towards 1.07 or lower.

EURJPY (154.66) has fallen exactly as expected and mentioned yesterday, triggered by the FOMC meeting as resistance at 158 holds well. Below 154, next target could be 152.

Dollar-Yen (141.85) has also fallen below our expected levels of 144/143 mentioned yesterday along with the weak Dollar. The pair can take some support near 140/138 and produce a corrective rise in the near term. Overall long term trend is down.

USDCNY (7.1272) could not move above 7.19 and has declined sharply with a gap down opening today at 7.1321. Immediate support is seen at 7.10 and then lower at 7.05.

Aussie (0.6716) has shot up above resistance near 0.6650-0.67. An extension to 0.68 can be possible before a fall is seen.

Pound (1.2649) has moved up as well and can test 1.27. A sustained rise above 1.27 is needed for the Pound to turn bullish for the medium term. Else we may see a fall back towards 1.26/25 in the next few sessions.

USDRUB (89.0896) is falling towards support at 88.50 which needs to hold to produce a bounce back towards 92-94 soon.

Dollar weakness and Euro strength ought to show some strength in the Rupee but will the RBI allow USDINR (83.41) to fall? Possibly within the 83.40-83.25 range.

EURINR (90.9640) has bounced back from 89.50, contrary to our expectation of seeing a fall to 89. While the rise sustains, it can rise to 91.30-91.50 soon.

The US Treasury yields have declined sharply after the US Fed meeting outcome last night. The Fed left the rates unchanged at 5.25%-5.5% and had hinted at three rate cuts next year. The Treasury yields have declined, breaking below their key supports. While this break sustains, more fall is on the cards. The German yields have broken their supports as expected and are coming down in line with our expectations. They have room to fall more going forward. The 10Yr and the 5Yr GoI are coming down within their sideways range. The range remains intact for now and we will have to wait for a breakout on either side.

The US 10Yr (3.99%) and the 30Yr (4.16%) yields have declined sharply below their respective supports at 4.1% and 4.2%. Outlook is bearish now. The 10Yr can fall to 3.6% while below 4.2%. The 30Yr can touch 3.8% while below 4.4%.

The German 10Yr (2.17%) and the 30Yr (2.34%) yields have declined below 2.2% and 2.4% as expected. They can now touch 2% (10Yr) and 2.2% (30Yr) on the downside in line with our expectation.

The 10Yr GoI (7.2581%) and 5Yr GOI (7.2284%) are coming down within their 7.2%-7.3% range. The outlook continues to remain unclear, and we will have to wait for the range breakout.

Dow Jones has risen well, breaking above its resistance and looks bullish to target further highs. DAX has dipped slightly but has supports coming up at 16600-16500. Nifty can open with a wide gap-up taking cues from the global markets. Shanghai can trade within 3000-2925 range for a while. Nikkei looks mixed.

Dow (37090.24, +1.4%) has risen well, breaking above 36800. Charts are looking strong. While above 36000, the Dow has potential to target 39000-39200 in the coming months.

DAX (16766.05, -0.15%) has dipped slightly. While above the 16600-16500 support, the outlook remains bullish to target 17000-17400.

Nifty (20926.35, +0.1%) can open with a wide gap-up taking cues from the global markets. The path for the rise to 21500-21700 will get cleared now.

Nikkei (32801.15, -0.38%) is oscillating around 33000. A decisive break above 33200-33500 is needed to move up towards 33800-34000 and to negate a fall towards 31500.

Shanghai (2978.70, +0.34%) is trading lower below 3000. But downside seems limited to 2930-2925. A range of 3000-2925 can hold for some time with a scope to break above 3000 and rise towards 3040-3050.

Commodities have recovered. Crude prices have bounced back on EIA weekly report that shows crude inventories have fallen more than expected. Gold and Copper have risen back sharply above 2040 and 3.80 whereas Silver has bounced back sharply from its support at 22.80 after Fed kept its interest rate unchanged at 5.5% and indicated that it could cut rate by 75bps for next year. Natural Gas has recovered and can rise further on the uspide.

Brent ($ 74.54) has recovered as the support is at $ 72 has held well. While above $ 72-70, there is scope for a rise towards $ 77.

WTI ($ 69.67) has bounced back after testing a low of $ 67.72. As long as it holds above the support at $ 66-65, a rise towards $ 72 is possible. A further break above $ 72 is needed to open doors towards $ 75-76.

Gold (2046.30) bounced back sharply towards 2050 from a low of 1988 contrary to our view for a fall towards 1950. It can now rise further towards 2060-2075.

Silver (24.18) has bounced back sharply above 24 as the support at 22.80 has held well. A further rise towards 24.50-25 can be seen.

Copper (3.8280) has risen back above 3.80 contrary to our view for a fall towards 3.72-3.70. It has scope to rise towards 3.88-3.90. A broad range of 3.90-3.70 can hold for some time.

Natural Gas (2.35) has rebounded after testing a low of 2.2350. If the bounce sustains, a rise towards 2.50-2.60 can be seen. Else it can come down to 2.00 before moving up from there.

0:30 06:00 Australia Labour Force
Expn – …Expected 10.0K …Previous 55.0K

6:30 12:00 IN WPI
Expn -0.47% …Expected – …Previous -0.52%

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

9:00 14:30 IN Trade bal
Expn – …Expected – …Previous -31.46$ Bln

12:00 17:30 BOE Mtg
Expn – …Expected 5.25% …Previous 5.25%

12:00 17:30 UK BOE Minutes
Expn – …Expected 2-0-7 …Previous 3-0-6

13:15 18:45 ECB Mtg
Expn – …Expected 4.50% …Previous 4.50%

13:30 19:00 US Retail Sales (MoM)
Expn -0.4% …Expected -0.1% …Previous -0.2%

DATA YESTERDAY
—————
23:50 05:20 JP Tankan Large Manufacturers Index
Expn – …Expected 10.0 …Previous 9.0 …Actual 12.0

7:00 12:30 UK Trade Bal
Expn -15.0 …Expected -14.1 …Previous -14.3 …Actual -17.0

10:00 15:30 EU Ind Prodn (MoM)
Expn 0.3% …Expected -0.3% …Previous -1.1% …Actual -0.7%

13:30 19:00 US PPI
Expn 0.2% …Expected 0.1% …Previous -0.4% …Actual 0.0%

13:30 19:00 US PPI ex Food & Energy (MoM)
Expn 0.5 …Expected 0.2 …Previous 0.0 …Actual 0.0%

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