The BOE and FED both went ahead with the 25 bps rate cuts each which were widely expected. The Dollar Index is trading lower within its range of 150.50/60-103. Euro, if sustained above current levels, can head towards 1.0850 or higher in the near term. EURINR has bounced well from the support around 90 and the revised range of 90-92 can hold for some time. USDJPY has declined within its range of 150-155, while EURJPY is trading near the lower end of its range of 167-165 region. USDCNY fell sharply and if the Stimulus measures policy meeting favors the Yuan, then it can appreciate further to 7.10 or even higher. Aussie and Pound can trade within broad range of 0.65-0.67 and 1.2900-1.3150 in the near term respectively. USDINR made an all-time high of 84.3775. On the NDF the pair is trading lower which gives us a hope of seeing a dip while below 84.40 to 84.30/20, else it can extend the rise to 84.50.

The FED, in its yesterday’s meeting, went ahead with 25 bps rate cuts which was widely expected. As a result, Dollar Index (104.515) moved lower within its range of 105.50/60-103.00 as expected. We expect the range to hold in the near term until further directional clarity.

EURUSD (1.0782) rose past 1.08 to the high of 1.0825 as expected before coming down a bit. The pair has immediate support coming around 1.0770 region above which it is likely to bounce higher towards 1.0850+. The downside is expected to be limited to 1.06.

Dollar-Yen (153.06) started coming off on Dollar weakness while EURJPY (165.03) is trading near the lower end of the range of 167-165 region. USDJPY needs a sharp rise past 155 for further bullishness else, the range of 155-150 can persist in the near term. Similarly, EURJPY needs a break on either side of the mentioned range for further directional clarity. Overall, the downside is expected to be limited to 150-148 (USDJPY) and 164-162 (EURJPY) respectively.

USDCNY (7.1462) has come down significantly. It could be that markets are preparing for the announcement on stimulus measures meeting today. For now, we are retaining our view of the Yuan strengthening towards 7.10 or even lower if the meeting strikes in favour of it.

Aussie (0.6657) observed a high of 0.6688 in line with our view of seeing a rise towards 0.67. Overall, a broad range of 0.65-0.67 can hold in the near term.

BOE as expected also went ahead with the 25 bps rate cut, thereby bringing the interest rate down to 4.75% (5.00%). Pound (1.2965) continues to trade within the range of 1.2900-1.3150 which can persist for a while. A break on the either side will be needed for medium-term directional clarity.

USDINR (84.3775) closed at an all-time high of 84.3775, breaking above our mentioned resistance at 84.35. However, we saw a fall to 84.2650 in the NDF rates yesterday which could give some hope of a possible dip in the pair today while below 84.40. Else a rally to 84.50 could be witnessed today. Support is seen near 84.30 and further down near 84.10. An immediate dip today is needed to fall towards the mentioned supports. Watch if the RBI intervenes to see near 84.40, preventing a further rally.

EURINR (90.9027) has bounced well from the support near 90, and tested the high of 91.20 before cooling down a bit. Our revised range of 90-92 can hold for some time.

The US Treasury yields have come down sharply. The resistances are holding well now. That keeps intact our view seeing a fall going forwards. Need to see if the yields are falling further from here to confirm the same. The US Federal Reserve cut the interest rates by 25-bps as expected yesterday. The Fed Fund Rate now stands at 4.5%-4.75%. The German yields continue to move up and are keeping intact our bullish view. The yields can rise more from here. The 10Yr GoI can now move up within this narrow range. Bias is positive to see a bullish breakout of this range eventually.

The US 10Yr (4.35%) and 30Yr (4.55%) yields have come down sharply. The resistances at 4.45% (10Yr) and 4.6% (30Yr) are holding well for now. A further fall from here will keep intact our view of the yields falling back to 4.2%-4% (10Yr) and 4%-4.2% (30Yr) going forward. A sustained rise above 4.4% (10Yr) and 4.6% (30Yr) is needed for the yields to go up to 4.6%-4.8% (10Yr) and 4.8% (30Yr). We will have to wait and watch.

The German 10Yr (2.44%) and the 30Yr (2.70%) yields continue to move up. The bullish view is intact to see 2.6% (10Yr) and 2.8% (30Yr) on the upside. Thereafter the chance of a reversal has to be seen.

The 10Yr GoI (6.8238%) remained stable around the lower end of the 6.8%-6.88% range. Within this the chances are high to move up within the range now. Eventually a bullish breakout above 6.88% can take the 10Yr yields up to 6.9% and 7% over the medium term.

Dow Jones remained flat and sustained above 43500 but watch for a possible decline from the crucial resistance zone of 44000-44500. DAX sustained above 19000 and rose above 19300. The view is bullish towards 19800-20000. The Nifty failed to break above 24600, retracting to 24200. A drop below the 24000–23700 support zone could lead to a further decline to 23500. The Nikkei, while holding above 39000, has come off from an intra-day peak of 39818.41; however, a re-test of 40000 remains on the table if it sustains above 39000. The Shanghai Index has risen above 3400, reaching a recent high of 3509 and now trades below 3500. Monitoring price action around 3500 will be key to determining the next directional move.

The Dow (43729.34) sustained higher but was stable. There is not much room on the upside as 44000-44500 is a strong resistance zone. A reversal from there may have the potential to drag the Dow down to 43000-42000. So we will have to approach the market from the sell side.
DAX (19362.52, +1.70%) sustains above 19000 and is attempting to bounce. The outlook is bullish while above 19000 to see 19800-20000 on the upside. Only a break below 19000 will negate this bullish view and drag the DAX down to 18700-18500.

Nifty (24,199.35, -1.16%) has come down failing to breach 24500. While below 24500-24600, the view is bearish to see 24000-23800 and even 23500 going forward.

Nikkei (39515.31,+0.34%) has pulled back from a recent high of 39818; however, a re-test of 40000 looks feasible. Failure to achieve this could result in a pullback toward the 38500-38000 range.

Shanghai (3470.57, -0.06%) is currently trading below 3500, after reaching a high of 3509. It remains in a wait-and-see mode for clearer direction. A sustained move above 3500 could open a path to 3700, while a reversal may bring it down toward the 3450-3400 zone.

Crude and Metal prices have recovered significantly from yesterday’s fall. Brent and WTI can range between $ 76-71 and $ 73-67 respectively for some time. Gold, Silver and Copper have recovered sharply. Gold and Copper can continue to rise towards 2750-2800 and 4.5-4.6 respectively in the near term. While Silver needs to surpass 32.5 to see higher levels of 33-34, else can fall back to 29.5. Natural Gas trade between 2.9/3.0-2.6 for some time.

Brent ($ 75.42) saw a high of $ 76.08 as hurricane Rafael affected the production in the Gulf, disrupting as much as 4.9 mln barrels per day. However, as long as the resistance at $ 76 holds, the earlier-mentioned range of $ 76-71 can hold for some time.

WTI ($ 72.12) tested a high of $ 72.88. While below $ 73, it can trade sideways between $ 73-69/67 for some time.

Gold ($ 2707.40) has recovered back sharply from a low of 2650 to close above 2700 yesterday. While 2700 holds, our earlier mentioned rise of 2750-2800 can take place in the upcoming weeks. For now, a broad range of 2800-2650/2600 is expected to hold for some time.

Silver (31.93) has recovered slightly but it needs to break above 32.5 to see a rise towards higher levels of 33-34. While below 32.5, it can fall towards 30.0-29.5 in the upcoming sessions.

Copper (4.4150) has bounced back sharply to close above 4.4. While 4.3 holds, a further rise towards 4.5-4.6 can take place in the short term.

Natural Gas (2.7050) has dipped. While above 2.6 it can rise towards 2.8-2.9 and a range of 2.9-2.6/2.5 can hold for some time.

1:30 07:00 CN CPI (YoY)
… Exp – …Expected 0.3 …Previous 0.4

1:30 07:00 CN PPI
… Exp – …Expected -2.5 …Previous -2.8

13:30 19:00 CA Labour Force
… Exp – …Expected 33.2K …Previous 46.7K

DATA YESTERDAY:-
—————
0:30 06:00 Australia Trade Balance
… Exp – …Expected 5.2A$ Bln …Previous 5.3A$ Bln …Actual 4.6A$ Bln

10:00 15:30 EU Retail Sales
… Exp -0.3% …Expected 0.4% …Previous 1.1% …Actual 0.5%

12:00 17:30 BOE Mtg
… Exp – …Expected 4.75% …Previous 5.00% …Actual 4.75%

12:00 17:30 UK BOE Minutes
… Exp – …Expected 0-1-8 …Previous 0-1-8 …Actual 0-8-1

19:00 00:30 US FOMC Meeting
… Exp <4.75% ...Expected <4.75% ...Previous <5.00%