The Fed kept rates unchanged as widely expected, but hawkish statements led to a stronger Dollar, taking it above 99. A rise to 100 can be possible in the near term with an immediate range of 100-98 to hold. US markets are closed due to the Juneteenth holiday today. Euro has declined sharply to levels of 1.1450-1.14 but needs to hold to avoid further decline to 1.13 or lower. EURINR has dipped too and could target 99-98.50. EURJPY can test 166-165.50 before attempting to rise back to 167 while USDJPY is mixed and can trade within 144-146 region. USDCNY can hold between 7.17-7.20 unless an upside-break is seen. The Aussie and Pound trade lower on a stronger Dollar. They can test 0.6550-0.64 and 1.33 respectively in the near term. USDINR has important resistance at 86.60 below which a pullback towards 86.25-86.00 can be seen in the near term. Failure to decline from 86.60 can be bullish towards 87 (less likely at the moment).
Dollar Index (99.055) has risen after hawkish comments from Powell following an unchanged key policy rate by the FED. A sustained trade above 99 will take it towards 100 in the near term. But the chances of a fall back towards 98 stay intact for the near term. Today the US markets are closed for the Juneteenth holiday.
EURUSD (1.1453) has fallen to test its immediate support near 1.1450-1.1400 which, if holds can produce a bounce back towards 1.15-1.16 in the coming sessions. Failure to hold above 1.1450/1.14 can drag it lower towards 1.13. Watch price action while above 1.14.
EURINR (99.1919) has declined as anticipated and may extend the fall further towards 99.00–98.50 in the near term.
EURJPY (166.23) has fallen on a weaker Euro and a mixed Yen. While below 167, a test of 166.00-165.50 looks possible.
Dollar-Yen (145.12) is mixed but slightly tilted to the upside. A test of 145.50-146 is possible before a dip back to 145-144 is seen. A ranged movement can be expected for the next few sessions between 144 and 146.
USDCNY (7.1899) has moved up within the mentioned range of 7.17–7.20. A break above 7.20, if seen, would negate the possibility of a fall towards 7.15. For now, the range is likely to remain intact in the near term.
Aussie (0.6483) bounced back to close above 0.6500 yesterday but has dipped now. The unemployment rate released today remains steady at 4.1%. We maintain our view of seeing a range between 0.6550-0.6400 for the near term.
Pound (1.3392) fell sharply on a stronger Dollar and could extend its fall towards the immediate support at 1.3300. Thereafter, while the support holds, a bounce back towards 1.3500–1.3600 is possible eventually. A broad range of 1.3600–1.3300 could hold for some time.
USDINR (86.3910) is trading below the crucial resistance in the offshore market after closing at 86.4825 yesterday. While this resistance at 86.60 holds, a pullback towards 86.20–86.00 on the downside is possible. However, a sustained break above 86.60, if seen would turn the outlook bullish, targeting 87 or higher in the medium term.
The US Treasury Yields have closed on a mixed note after the US Federal meeting outcome on Wednesday. The range is intact now on the yields. The bias remains bearish to break the range on the downside and fall. The US Fed kept the rates unchanged at 4.25%-4.5% and retained its forecast for another 50-bps rate cut this year. However, it has revised its inflation forecast higher for this year citing the uncertainty prevailing over the impact of tariffs. The German yields have come down failing to rise above their resistance. They now look vulnerable to fall more. The 10Yr GoI sustains above its support. A near-term consolidation is possible before an eventual rise happens.
The US 10Yr (4.39%) and 30Yr (4.89%) Treasury yields have closed on a mixed note. The 4.3%-4.55% (10Yr) and 4.8%-5% (30Yr) range is intact now. We retain our bearish bias to see a downside break of this range going forward.
The German 10Yr (2.49%) and 30Yr (2.94%) yields have come down. The yields now look vulnerable for a fall to 2.4% (10Yr) and 2.85%-2.8% (30Yr) again. Key resistance is at 2.6% (10Yr) and 3.1% (30Yr).
The 10Yr GoI (6.3203%) sustains above 6.3% as expected. A consolidation between 6.3% and 6.4% is possible before the yield goes up to 6.5% eventually.
The Dow and Dax trade weak with possible chances to test 41500-41000 and 23000-22500 in the near term from where a bounce can be seen eventually. Nifty has scope to test 24600-24400 before rebounding towards 25000-25200. Nikkei tested 38870 before coming down from there. Trade between 38500-39000 can be seen in the near term. Shanghai has dipped and can see trade within 3400-3350 in the next few sessions.
The Dow (42171.66, -0.10%) continued to dip lower after the FED kept rates unchanged. While above 41500-42000, there can be some scope for a bounce in the near term towards 43000. A broad range of 41000-43000 can hold for the next few weeks.
DAX (23317.81, -0.50%) also declined yesterday, testing a low of 23262.64, breaking below our mentioned 23500. A test of 23000-22500 is possible in the near term from where a bounce, if seen, can take it back towards 23500-24000 in the coming weeks.
Nifty (24812.05, -0.17%) has scope to dip to 24600-24400 from where a bounce back towards 25000-25200 can be possible in the medium term. A broad range of 24400-25200 can hold for the next few weeks. risen well within the mentioned 24400-25200 range, testing a high of 24967 yesterday.
Nikkei (38605.31, -0.72%) tested a high of 38870.55 before declining from there. While above 38500, there is scope for a rise to 39000. A near-term range of 38500-39000 can hold with an eventual break above 39000 in the medium term.
Shanghai (3376.41, -0.37%) faced decline again as 3400 holds well as a near-term resistance. A test of 3350 could be on the cards with a near-term possible range of 3350-3400.
Crude prices remain bullish amid escalating Middle East tensions, with Brent likely to rise toward $ 78–$ 80 and WTI aiming for $ 74–$ 78. Gold is testing key support at $ 3,400, and a break could lead to $ 3,300, while holding above may push it to $ 3,500. Silver remains strong with a target of $ 38–$ 40. Copper continues to rise within a $ 4.70–$ 5.00 range, and Natural Gas is moving up toward $ 4.00–$ 4.20 as expected.
Brent ($ 76.26) closed lower at $ 76.70 after testing a high of $ 77.44 yesterday. A rise towards $ 78–$ 80 looks likely in the near term due to escalating Middle East tensions between Iran and Israel. The US is reportedly close to joining Israel’s attacks on Iran after President Trump called for Iran’s “unconditional surrender.” So far, Iran has not impeded ship movement through the vital Strait of Hormuz, which handles about 20% of the world’s daily crude shipments. However, if this changes, a surge in crude prices may follow.
WTI ($ 72.90) rose to a high of $ 74.27 but closed lower at $ 73.00 yesterday. Our view remains unchanged for a rise towards $ 74–$ 76–$ 78 in the near term.
Gold ($ 3,394.80) is attempting to break below $ 3,400. A sustained drop below this level could drag the price down to $ 3,300. Otherwise, if $ 3,400 holds, a rise towards $ 3,450–$ 3,500 is possible in the near term.
Silver ($ 36.73) rose to a high of $ 37.41 but closed slightly lower. Our view remains unchanged for a rise towards $ 38–$ 40 in the coming weeks.
Copper ($ 4.8505) has risen and may target $ 4.90–$ 5.00 in the near term, within the broader range of $ 4.70–$ 5.00.
Natural Gas ($ 3.97) is moving up in line with our expectations and can target $ 4.00–$ 4.20 in the coming weeks.
1:30 07:00 Australia Labour Force
…Expectations 20.6k …Previous 87.6k … Actual -2.5k
8:30 14:00 SNB Mtg
…Expectations 0.00% …Previous 0.25%
11:00 16:30 BOE Mtg
…Expectations 4.25% …Previous 4.25%
6:00 11:30 UK CPI Y/Y
4.1% …Expectation 3.3% …Previous 3.5% …Actual 3.4%
9:00 14:30 EU Final CPI (YoY)
2.1% …Expectation 1.9% …Previous 1.9% …Actual 1.9%
12:30 18:00 US Housing Starts
1282k …Expectation 1360k …Previous 1361k …Actual
13:00 01:30 US TICS (Net foreign purch of long-term Sec)
…Expectation 147.4 …Previous 161.8 …Actual
{18:00 23:30 US FOMC Meeting
…Expectation <4.50 ...Previous <4.50 ...Actual