Initial advances seen in the Dollar after the FOMC rate cut were limited as the index fell back to 100.50. It could test 100.50-99.50 before bouncing back. Euro could trade within 1.1060-1.12 for now and delay our expected fall to 1.10-1.0950. USDJPY and EURJPY could not break above 144 and 160 respectively and have dipped from there. Aussie is headed towards immediate resistance near 0.6850 while Pound could remain ranged between 1.31-1.33/34 for the near term. USDCNY has fallen sharply after the PBoC kept rates unchanged. Breaking below the crucial 7.08, it is now headed towards 7.02/7.00. EURINR could trade within 92-94 region for a few sessions. USDINR may have some room to test 83.60/50 before bouncing back to 83.70/80 soon. The fall below 83.70 could be short lived.

The Dollar Index (100.645) limited its rise to 101.50 and fell back sharply contrary to our expectation of rising to 102. Currently trading near the lower end of the 100.50-102 range, it is quite likely that the index may break below 100.5 to head towards 99.50 in the near term. Note that 100.5 and 99.5 are crucial supports below current levels.

EURUSD (1.1157) limited its fall to 1.1068 contrary to our expectation of a fall to 1.10-1.0950. Very near term could see a trade between 1.1060-1.12. Later, a sustained break on either side can give some directional clarity.

The Dollar-Yen (142.47) and the EURJPY (158.97) could not extend their rise above 144 and 160 and have dipped back along with the fall in the Dollar Index, ahead of the BoJ policy statement today where the central bank is expected to keep rates unchanged. In the medium term, there could be some chances of a break above 144 and 160 to attempt a rise to 146 and 162 respectively.

USDCNY (7.0535) has broken below 7.05 and looks bearish for a further dip towards 7.02/7.00 from where a bounce back can be expected.

Aussie (0.6813) has risen sharply on Dollar weakness and could test immediate resistance near 0.6850. A break above this level is required for the Aussie to turn bullish towards 0.69/70, or else it can decline back towards 0.67/66.

Pound (1.3285) broke above 1.33 to test 1.3314 before coming off from there. There could be scope to rise to 1.34 if it attempts to break above 1.33 again in the near term. Downside could be limited to 1.31 for now.

USDINR (83.6850) sustained trade below 83.70 yesterday to test 83.56, contrary to our expectation of seeing a rise back to 83.80+ levels mentioned in yesterday’s edition. Looking at the momentum and a stronger Euro and Yuan, there could be some chances of USDINR testing lower support near 83.60/50 before bouncing back to higher levels of 83.70/80 again in the medium term.

EURINR (93.3383) is likely to trade within 92-94 region for the near term.

The US Treasury yields have come down again. The resistances have capped the upside as expected. That keeps intact the broader bearish view. More fall is on the cards. The German yields have room to rise further from here before resuming their broader downtrend. Resistances ahead are likely to hold and restrict the upside. The 10Yr GoI has come down again. The downtrend is intact, and the expected corrective rise is not happening.

The US 10Yr (3.71%) and the 30Yr (4.04%) yields have come-off from the highs of 3.77% and 4.09% respectively. The resistance at 3.8% (10Yr) and 4.1% (30Yr) are holding well as expected. That keeps the broader bearish view intact to see 3.5% (10Yr) and 3.8% (30Yr) on the downside.

The German 10Yr (2.19%) remains stable while the 30Yr (2.50%) yield has risen further. Resistances at 2.3%-2.4% (10Yr) and 2.5%-2.6% (30Yr) are likely to cap the upside and keep the downtrend intact for a fall to 2% (10Yr) and 2.2% (30Yr).

The 10Yr GoI (6.7577%) has come down. The corrective rise to 6.8%-6.83% seems not to be happening. The bearish view is intact to see 6.7%. Thereafter a bounce is possible.

Strong rise is seen in Dow Jones, DAX and Nikkei but all have key resistance overhead, a break above which, if seen, could be further bullish. Else they could witness a fallback. Nifty tested an all time high yesterday but has come-off a bit from there. View will remain bullish as long as Nifty stays above 25200. Shanghai is facing rejections from 2750 but as long as it holds above 2700, chances are high for it to break above 2750 and rise towards 2775-2800.

Dow (42025.19, +1.26%) has risen sharply and has closed above 42000. Resistance is around 42250 which if broken can take the index further up to 42700-42800.

DAX (19002.38, +1.55%) has surged to 19000 much faster than expected. A further rise above 19100 will clear the way for a rally to 19800-19900. Support is in the 18650-18600 region.

Nifty (25415.80, +0.15%) has come-off from its intraday high of 25611.95. The bias remains bullish to get a sustained break above 25450 and a rise to 25800.

As expected, Nikkei (37934.50, +2.19%) has risen towards 38000. A break above the resistance of 38000, if seen, can open doors towards 39000. Else could fall back towards 37500-37000. It is a wait and watch now.

Shanghai (2736.07, 0.00%) rose to 2748 yesterday and has fallen back a bit from there. As long as it holds above 2700, chances are high for it to break above 2750 and rise towards 2775-2800.

Crude prices have bounced back and are heading up towards their key resistance zone. A break above their resistance, if seen, could lead to an extended rise. Gold, Silver and Natural Gas have recovered sharply as their support level held well. Copper too has risen sharply. Metals and Natural Gas look bullish for the near term.

Brent ($ 74.54) has bounced back towards its key resistance at $ 75. A break above it, if seen, can lead to a rise towards $ 77. That will negate the danger of falling towards $ 71-70.

WTI ($ 70.80) has recovered well above $ 70. A rise past $ 71.50-72, if seen, can lead to a rise towards $ 74-75. That will negate the chances of seeing a fall towards $ 68-67.

Gold (2613.10) has bounced back well above 2600 from a low of 2575. A rise towards 2620-2650 looks possible while above 2550.

Silver (31.13) has risen back sharply above 31 as the support at 30 held well. A rise towards 32.00-32.50 looks possible in the near term.

Copper (4.3540) has moved up sharply towards 4.4 in line with expectations. A further rise towards 4.5 or higher could be seen from here.

Natural Gas (2.3490) fell to a low of 2.2230 in line with expectations for a fall towards 2.20 before bouncing back above 2.30. It may rise towards 2.4-2.5 while above 2.20.

23:05 04:35 UK Cons Conf
Expn -10 …Expected -13 …Previous -13

23:30 05:00 JP CPI
Expn 2.9 …Expected 2.8 …Previous 2.7

3:00 08:30 BOJ Meeting
Expn – …Expected 0.25% …Previous 0.25%

DATA YESTERDAY:-
————–
1:30 07:00 Australia Labour Force
Expn – …Expected 26.4K …Previous 48.9K …Actual 47.5K

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

11:00 16:30 UK BOE Minutes
Expn – …Expected 0-2-7 …Previous 0-5-4 …Actual 0-1-8

12:30 18:00 US Philifed Index
Expn – …Expected -0.6 …Previous -7.0 …Actual 1.7

12:30 18:00 US Current Account Balance
Expn – …Expected -260.0 …Previous -241.0 …Actual -266.8

14:00 19:30 US Existing Home Sales
Expn 3770K …Expected 3890K …Previous 3960K …Actual 3860