The Dollar Index is holding well above the support at 100.50, which if holds can take it higher towards 101.50 in the near term. A better directional clarity could be expected post the FOMC meeting scheduled today. Euro has resistance between 1.1150-1.12 which suggests a limited upside for the pair. USDJPY and EURJPY needs a strong break past 142 and 158 respectively to become bullish further, else both look bearish towards 139-138.40 and 154-152 respectively. Aussie and Pound if sustained above current levels, may head towards 0.68/6850 and 1.33-1.3350 respectively. USDCNY for now can hold the immediate range of 7.12-7.08. Bearishness would only strike in on a break below 7.08 if seen. EURINR has risen past 93 but needs to sustain to rise towards 93.50/94 else can fall back towards 92.40-92.00. USDINR has broken below 83.80 but we expect the pair to rise back towards 83.90 in the coming sessions.

The Dollar Index (100.83) saw some relief yesterday as the US Retail Sales came out stronger than expected at 0.1% (-0.2%). FOMC meeting is scheduled today. For now, while the support near 100.50 holds, the index can bounce back towards 101.5 in the near term. A decisive break below 100.5, if seen this week can extend the downside target towards 99.50.

EURUSD (1.1126) is holding well below the expected resistance levels near 1.1150-1.12 region. Either from current levels or upon testing the higher resistance, the pair may fall back towards 1.10 soon.

The Dollar-Yen (141.43) contrary to our expectations of seeing a fall towards 139-138.40, rose sharply to the high of 142.46 before coming down. Only a sustained rise past 142 can take it higher towards 144. We are not ruling out the expected fall to 139-138.40 for now.

EURJPY (157.36) indeed tested 158.33 but could not sustain and started coming off from there. Unless a decisive break past 158 is seen, it is likely to fall back towards 154 or lower levels of 152-150 before pausing there.

USDCNY (7.0966) was closed yesterday. For now, it is holding well above its interim support around 7.08, which if sustains then a range of 7.12-7.08 can persist for a while. Else can extend the fall down to 7.05/02 on a confirmed break below 7.08.

Aussie (0.6761) has risen well and Pound (1.3163) tested 1.3229 before it began to fall. Both the pairs need to sustain above current levels to head towards 0.68/0.6850 and 1.33-1.3350 in the coming sessions. Bearishness for the Pound towards 1.30/29 is negated while above 1.31.

USDINR (83.7550) was expected to remain stable above 83.80, but instead it tested 83.70 on the downside before closing higher at 83.7550. A better directional clarity could be expected post the FOMC scheduled today. For now, we anticipate a rise back to 83.80/95 in the coming sessions. At the same time, any break below 83.70, if seen can trigger a further decline towards the weekly support near 83.60/50 before pausing for a reversal.

EURINR (93.22) needs to see a break past 93.50 to head towards 94. The immediate downside is likely to be limited to 92.40-92.00. The next 1-2 weeks may trade between the broad range of 92-94.

The US Treasury yields remain stable ahead of the US Fed meeting outcome tonight. The trend is down and there is room to fall more from here. A 25-bps rate cut is already factored in the market. A higher rate cut today or if the dot plot shows a revised forecast for more rate cuts for the rest of the year/next year will be more bearish for the yields. The German yields have bounced but are unlikely to sustain. The downtrend is likely to resume, and the yields can fall more. The 10Yr GoI witnessed a corrective bounce as expected. The resistance ahead can cap the upside and keep the broader downtrend intact.

The US 10Yr (3.64%) and the 30Yr (3.95%) yields remain stable and lower. Our bearish view remains intact to see 3.5% (10Yr) and 3.8% (30Yr) on the downside while below 3.8%-4% (10Yr) and 4.1%-4.3% (30Yr).

The German 10Yr (2.14%) and the 30Yr (2.39%) yields have inched up slightly. The bounce is unlikely to sustain. The yields can reverse lower and resume the downtrend targeting 2% (10Yr) and 2.2% (30Yr) on the downside. Resistances at 2.3%-2.4% (10Yr) and 2.5%-2.6% (30Yr) can cap the upside.

The 10Yr GoI (6.7808%) has bounced as expected after testing 6.75%. The upside can be capped at 6.8%-6.83%. The yield is likely to resume the downtrend towards 6.7% eventually.

Dow Jones continues to rise but has crucial resistance overhead, which if holds, can lead to fall from there. Key focus is on the FOMC meeting today where the central bank is expected to cut interest rate by 25bps or 50bps. DAX has broken above its resistance and while this break sustains, a further rise can be seen. Nifty is stuck in a very narrow range but is positive to see a break on the upside of the range. Nikkei appears range bound. Shanghai hovers above it support, which if holds, can produces a bounce back.

Dow (41606.18, -0.04%) has come-off from a high of 41835. A strong rise above 42000 in the next few days after the Fed meeting will be bullish to see 42700 and higher. Alternatively, a fall below 41400 can drag it to 41000. We will have to wait and watch.

DAX (18726.08, +0.50%) has risen and closed above 18700. While above 18700 there is room to see 19000 and higher levels.

Nifty (25418.55, +0.14%) has been stable and range bound between 25300 and 25450 so far this week. We retain our bullish bias to breach 25450 and rise to 25700-25800. Support is in the 25200-25000 region.

Nikkei (36476.00, +0.75%) looks range bound between 37000-35000. A decisive break on either side of the range will bring further clarity.

Shanghai (2706.15, +0.08%) hovers above the support at 2700. While that holds, a rise towards 2750 could be seen. A decisive break below 2700, if seen, can extend the fall towards 2680-2650.

Brent and WTI have entered into the key resistance zone. Need to see if Crude prices able to break above the resistance or not. Gold has fallen back as the mentioned resistance held well. Silver, Copper and Natural Gas have too declined. Gold, Silver and Copper may come down to test 2550, 30 and 4.2/4.1 before a bounce back might take place. Natural Gas can fall towards 2.20. Today’s FOMC meeting would be crucial to watch as it could bring volatility in the market and set the tone for future direction.

Brent ($ 73.38) and WTI ($ 69.65) have entered into the key resistance zone of $ 74-75 and $ 71.50-72. A decisive break above these could pave the way towards $ 77 (Brent) and $ 74-75 (WTI). Else they could fall back $ 71-70 (Brent) and $ 68-67 (WTI) respectively.

Gold (2597.60) has declined below 2600 as the resistance at 2620 held well. While below 2620, a fall towards 2550 could be seen. Thereafter, if 2550 holds, a bounce back towards 2620-2650 can be seen. Else it may fall towards 2500.

Silver (30.78) couldn’t sustains above 31 and has fallen to a low of 30.69 so far. It may test 30 on the downside. Thereafter, if 30 holds, it may bounce back from there towards 32.00-32.50. Else it can break lower towards 29.50.

Copper (4.2470) has declined after failing to rise past 4.3. Support is at 4.2-4.1. While that holds, chances of seeing a rise towards 4.4-4.5 remains intact.

Natural Gas (2.3150) rose to 2.44 in line with expectations for a rise towards 2.4-2.5 and has fallen back from there. If the fall sustains, it may come down towards 2.20.

6:00 11:30 UK CPI Y/Y
Expn 2.3% …Expected 2.2% …Previous 2.2%

9:00 14:30 EU CPI (YoY)
Expn 2.0% …Expected 2.2% …Previous 2.2%

12:30 18:00 US Housing Starts
Expn 1171K …Expected 1310K …Previous 1238K

18:00 23:30 US FOMC Meeting
Expn 5.25% …Expected 5.25% …Previous 5.50%

13:00 01:30 US TICS (Net foreign purch of long-term Sec)
Expn – …Expected 54.9 …Previous 96.1

DATA YESTERDAY:-
————–
6:30 12:00 IN WPI
…kshitij Expn 1.95 % …Expected 1.80% …Previous 2.04% …Actual 1.31

12:30 18:00 US Retail Sales (MoM)
Expn 1.2 % …Expected -0.2 % …Previous 1.3 % …Actual 0.1%

12:30 18:00 CA Inflation Y/Y
Expn – …Expected – …Previous 2.5 %

13:00 18:30 IN Trade bal
Expn -24.4 …Expected – …Previous -23.5 …Actual -29.7

13:15 18:45 US Industrial Production
Expn 0.3 % …Expected 0.1 % …Previous -1.0 % …Actual 0.8%

13:15 18:45 US Capacity Utilization
Expn 78.0 % …Expected 77.9 % …Previous 77.4 % …Actual 78.0%