The FED cut rates by 50bps in line with market expectations taking the key interest rate down from 5.50% to 5.00%. The markets expect another 50bps rate cut by the end of the year. The risks of balancing inflation and unemployment seem to be in place as indicated by the FED statement. As the markets had already priced in a rate cut earlier, the Dollar Index moved up after briefly testing 100.215 while the Euro dipped from 1.1189 itself and could be headed towards 1.10/1.0950 soon. USDJPY and EURJPY have started a corrective rise that could extend towards 146-148 and 162-164 respectively in the near term. Aussie may face rejection from 0.6850 while Pound could remain ranged between 1.31-1.33 for a while. USDCNY may continue within the immediate range of 7.12-7.08. Bearishness would only strike in on a break below 7.08, if seen. EURINR has dipped below 93 and while that holds, could attempt to test 92.50-92.00 soon. USDINR is likely to bounce back towards 83.80-84.00 while above 83.70. BOE policy meeting is due today where markets expect the central bank to keep rates unchanged.

The Dollar Index (101.259) tested 100.215 after the FED cut rates by 50bps but has moved up to currently trade well above 101. The bounce could continue to test 102 in the near term.

EURUSD (1.1097) has dipped from 1.1189 and has just dipped below 1.11. While the fall sustains, we may expect a test of 1.10-1.0950 in the next few sessions.

The Dollar-Yen (143.34) and the EURJPY (159.12) have risen as expected. Both pairs could now continue on a corrective rise that could extend towards 146-148 and 162-164 in the coming weeks within an overall long term downtrend still intact.

USDCNY (7.0970) has risen too but continues to trade within 7.08-7.12 region. Either a break above 7.12/14 or below 7.08 is needed for further directional clarity. If 7.08 manages to hold well, the pair may attempt to slowly move higher in the coming weeks.

Aussie (0.6777) has risen well over the last few days but could face resistance near 0.6850 from where a dip to 0.67/0.6650 could again come into the picture. A sustained break above 0.6850 is needed for Aussie to continue rising towards 0.69/70 in the longer run which looks less likely for now.

Pound (1.3191) is likely to range between 1.31-1.33 for some time.

USDINR (83.7550) may hold above 83.70 and start to rise slowly towards 83.80-84.00 again. Below 83.70, important supports are seen near 83.60 and 83.50 but looks less likely that the pair would break below 83.70 just now. Preference is to see a rise today back into the earlier 83.80-84.00 range.

EURINR (92.8811) has dipped below 93 as 93.50 seems to be holding well as immediate resistance. While below 93, it could test 92.50-92.00 in the coming days.

The US Treasury yields have risen after falling immediately after the Fed meeting outcome. Though there is room to rise further from here, resistances can cap the upside and keep the broader downtrend intact. The Fed cut the rates by 50-bps yesterday and have kept the doors open for another 50-bps rate cut for the rest of the year. The forecast for a larger rate cuts this year could keep the yields under pressure. The German yields have also risen sharply but have resistances ahead. We can expect the downtrend to resume after testing the resistance in the coming days. The 10Yr GoI has limited to rise from here. The downtrend is likely to resume after some more rise from here.

The US 10Yr (3.72%) and the 30Yr (4.03%) yields have risen well. But resistance at 3.8% (10Yr) and 4.1% (30Yr) is likely to cap the upside. A reversal thereafter will keep the downtrend intact for a fall to 3.5% (10Yr) and 3.8% (30Yr).

The German 10Yr (2.19%) and the 30Yr (2.45%) yields have risen further sharply. The broader trend is down. Resistances at 2.3%-2.4% (10Yr) and 2.5%-2.6% (30Yr) can cap the upside and keep the broader downtrend intact for a fall to 2% (10Yr) and 2.2% (30Yr).

The 10Yr GoI (6.7808%) was closed yesterday. A corrective rise to 6.8%-6.83% from here cannot be ruled out before the downtrend resumes towards 6.7%.

Dow Jones almost tested its crucial resistance after Fed cut interest rate by 50 bps and has fallen back from there. A break below 41400, if seen, can be further bearish for Dow Jones. DAX has scope to rise towards 19000 or higher while it sustains above 18650/18600. Nifty has declined and might fall to 25200 before a bounce back can be seen. Nikkei has broken above the upper end of the sideways range while Shanghai has bounced back well from it support of 2700. Both Indices looks bullish towards 38000 and 2750-2800.

Dow (41503.10, -0.25%) has come down sharply from a high of 41981.97. As mentioned yesterday, a fall below 41400 will drag it down to 41000. That in turn will delay the expected break above 42000 and the rise to 42700. We will have to wait and watch.

DAX (18711.49, -0.08%) remained stable yesterday. While it sustains above 18650, the bias is bullish to see a rise to 19000 and higher. A fall below 18650-18600 will only bring it under pressure for a fall to 18400 and lower.

Nifty (25377.55, -0.16%) broke 25450 but did not sustain. There are chances to get a dip to 25200 first before the rise to 25700-27800 happens. While above the 25200-25000 support, the bias is bullish.

Nikkei (37393.00, +2.90%) has broken above the upper end of the 37000-35000 range. While this break sustains, a rise towards 38000 could be seen.

Shanghai (2735.48, +0.67%) tested a low of 2689.69 on Wednesday before bouncing back from there. A rise towards 2750-2800 could be seen.

Crude prices have dipped slightly as the resistance seems to be holding well and may come down further from here. Gold, Silver and Copper have fallen after Fed cut rate by 50bps but have support coming up which if holds, can produce a bounce back. Natural Gas continues to dip and can fall towards 2.20.

Brent ($ 73.31) and WTI ($ 69.55) have dipped slightly. A fall towards $ 71-70 (Brent) and $ 68-67 (WTI) could be seen while the resistance at at $ 74-75 (Brent) and $ 71.50-72 (WTI) holds. Only a decisive break above these could pave the way towards $ 77 (Brent) and $ 74-75 (WTI).

Gold (2579) tested a high of 2627 yesterday and has fallen towards 2575. Support is at 2550, which if holds, can produce a bounce back towards 2620-2650. Only a decisive break below 2550 can lead to a fall towards 2500.

Silver (30.34) has fallen sharply towards 30 after testing a high of 31.59. If 30 holds as support, it may bounce back towards 31-31.50. A break lower, if seen, can target 29.50-29.00 on the downside.

Copper (4.2615) rose to test a high of 4.3435 before coming down below 4.3. The fall could be limited to 4.2-4.1. While above 4.1, chances of seeing a rise towards 4.4-4.5 in the near term remains intact.

Natural Gas (2.2920) continues to dip and can fall towards 2.20. Thereafter, we need to see if it bounces back towards 2.4 or extends the fall towards 2.15/2.14.

1:30 07:00 Australia Labour Force
Expn – …Expected 25.8K …Previous 58.2K

11:00 16:30 BOE Mtg
Expn – …Expected 5.00% …Previous 5.00%

11:00 16:30 UK BOE Minutes
Expn – …Expected 0-2-7 …Previous 0-5-4

12:30 18:00 US Philifed Index
Expn – …Expected -0.6 …Previous -7.0

12:30 18:00 US Current Account Balance
Expn – …Expected -260.0 …Previous -237.6

14:00 19:30 US Existing Home Sales
Expn 3770K …Expected 3890K …Previous 3950K

DATA YESTERDAY:-
————–
6:00 11:30 UK CPI Y/Y
Expn 2.3% …Expected 2.2% …Previous 2.2% …Actual 2.75

9:00 14:30 EU CPI (YoY)
Expn 2.0% …Expected 2.2% …Previous 2.6% …Actual 2.2%

12:30 18:00 US Housing Starts
Expn 1171K …Expected 1310K …Previous 1237K …Actual 1356K

18:00 23:30 US FOMC Meeting
Expn 5.25% …Expected 5.25% …Previous 5.50% …Actual 5.00%

13:00 01:30 US TICS (Net foreign purch of long-term Sec)
Expn – …Expected 54.9B …Previous 80.5B …Actual 135.4B