The FED cut the rate but 25 bps thereby bringing the FFR at 4%. Dollar Index, Euro & EURINR continues to trade within 99.50-98.50, 1.1550-1.1700 & 102-103 region respectively for now. EURJPY & USDJPY have bounced a bit and if sustained above current levels, can attempt to test our earlier mentioned targets of 178-179 & 153.50-154.00. Watch out for the BOJ policy meeting scheduled today wherein the market expects the central bank to keep the rate unchanged at 0.50%. USDCNY has moved below 7.10 and can now head towards 7.075 in the near term. The Aussie can extend the gains towards 0.665-0.670 as long as it stays above 0.655. The Pound has recovered well from the low of 1.3140 and if sustained, can test 1.33 in the near term. USDINR can trade within 88.00-88.50 region for sometime.

FED went ahead with the 25-bps rate cut as widely expected. Dollar Index (99.05) surged from 98.63 to 99.34, driven by Jerome Powell’s hawkish stance on future rate cuts. The 99.50–98.50 range remains intact, with a breakout on either side required for clearer directional signals.

EURUSD (1.1646) had initially slipped to the low of 1.1577 but it soon recovered as well. For now, the pair is likely to trade within the 1.1570–1.1700 range for some time until a breakout occurs.

EURINR (102.6246) faces immediate resistance near 103 and while it holds, the EURINR can consolidate between 102-103 region in the near term.

EURJPY (177.12) & Dollar-Yen (152.486) have bounced slightly from 176.63 and 151.53 levels. Immediate support just below current levels needs to hold to push them higher toward 178-179 and 153.50-154 respectively. Else, a break below if seen 176 and 151 would confirm a downtrend, potentially dragging the pairs toward 170 and 150–148 in the medium term. Watch price action closely around current levels.

USDCNY (7.0955) as mentioned has slipped below 7.10 and if sustained, it can extend the fall toward deeper support at 7.075 in the coming sessions before a rebound occurs.

Aussie (0.6590) had initially risen to the level of 0.6617 but could not sustain and started to decline. Still, while the pair trades above 0.655, the target of 0.665 and 0.67 is kept open for now.

Pound (1.3205) extended the fall to the support near 1.3140 but has currently recovered well and is now attempting to rise back toward resistance at 1.33. A sustained move above 1.33 would confirm strength. Else, any break below 1.3140 if seen would turn the outlook bearish, targeting 1.28 in the medium term.

USDINR (88.32) had declined to the low of 88.14675 yesterday before closing a bit higher. Overall, the USDINR can trade within the 88.00–88.50 range for the next few sessions before a breakout occurs on either side.

The US Treasury yields have risen sharply after the Fed meeting outcome. A 25-bps rate cut came in from the Fed as expected. However, Powell sounding a little doubtful about delivering another 25-bps rate cut in December has aided the yields to rise. A strong follow-through rise breaking above the immediate resistance can take the yields much higher going forward. It will also negate the last leg of fall that we had expected. The German Yields remain stable. They have to rise from here immediately in order to avoid a fall. The 10Yr GoI remains stable in a narrow range.

The US 10Yr (4.07%) and 30Yr (4.63%) Treasury yields have risen sharply. A strong follow-through rise above 4.1% (10Yr) and 4.65% (30Yr) will negate the fall to 3.9%-3.85% (10Yr) and 4. 5%-4.45% (30Yr). It will then take the yields up to 4.2%-4.3% (10Yr) and 4.8%-4.85% (30Yr).

The German 10Yr (2.62%) and 30Yr (3.19%) yields continue to remain stable. We repeat that a strong rise from here is needed to negate the fall to 2.5% (10Yr) and 3.07% (30Yr) and rise to 2.7% (10Yr) and 3.3% (30Yr) straight away.

The 10Yr GoI (6.5282%) remains stable between 6.5% and 6.55%. A decisive break above 6.55% is needed to go up to 6.6%. Else, the yield can remain in the 6.5%-6.55% (narrow) or 6.45%-6.55% (broad) range for some more time.

The FED cut rates by 25bps as expected but has signalled no more rate cuts this year. Dow have up its initial gains and fell sharply. Unless an immediate rebound is seen, it can fall further to 46500. Dax, Nikkei and Shanghai have also dipped but could limit its downside to 24000, 50000 and 3900. The ECB is expected to keep rates unchanged today. Nifty has moved up. View is bullish to 26500 while above 25750.

The Dow (47632, -0.16%) tested 48040.64 before giving up the gains after Powell signalled off no more rate cuts this year. If an immediate rebound is not seen , we may have to allow for a fall to 46500 initially before eventually moving higher towards 48000 again.

DAX (24124.21, -0.64%) has been trading in a narrow range of 24000-24400/24500 and needs to see a decisive break on either side to indicate a stronger direction for the medium term. For the next few sessions the mentioned range can continue to hold.

Nifty (26053.90, +0.45%) needs to sustain above 25750 to continue its rise towards 26250-26500 eventually. There can be some short lived dips but the index can move up gradually.

Nikkei (51187.23, -0.23%) tested 51548 before coming off from there to current level. The dip can be temporary and limited to 50000 from where an eventual rise towards 52000 is possible.

Shanghai (4005.45, -0.27%) has moved above 4000 but needs to sustain the rise in the coming sessions to slowly move up. Else failure to sustain the rise can take it down towards 3900 or lower.

Crude prices have seen a slight recovery yesterday but can remain weak and decline towards $ 63 (Brent) and $ 59 (WTI) respectively in the near term. Gold tested a high of $ 4046.20 and Silver rose to $ 48.51, but both remain vulnerable to declines towards $ 3850-3800 and $ 45-44 respectively. Copper is showing strength, attempting to break higher above $ 5.20/25 with potential to reach $ 5.30-5.40. Natural Gas continues to drift lower and may extend its fall towards $ 3.70-3.60.

Brent ($ 64.61) rose slightly yesterday on expectations of tighter global oil supplies, but the overall outlook remains bearish towards $ 63 in the near term.

WTI ($ 60.19) continues to trade with a bearish bias and can decline towards $ 59 in the near term.

Gold ($ 3949.90) bounced back to a high of $ 4046.20 yesterday, but while it stays below $ 4100, the near-term bias remains weak for a fall towards $ 3850-3800.

Silver ($ 47.26) saw an unexpected rise to $ 48.51 yesterday, but as long as it remains below $ 49-50, we maintain our view of a decline towards $ 45-44 in the coming weeks.

Copper ($ 5.1840) as expected, is attempting to break higher after rising sharply to $ 5.2790 yesterday. A sustained move above $ 5.20-5.25 is needed to open the way for $ 5.30-5.40.

Natural Gas ($ 3.7940) continues to decline in line with expectations and can extend its fall towards $ 3.70-3.60 in the near term.

GMT 3:00 IST 08:30 BOJ Meeting
…Expectations 0.50 …Previous 0.50

GMT 9:00 IST 14:30 EU Flash GDP
…Expectations 0.1 …Previous 0.1

GMT 9:00 IST 14:30 EU Unemp
6.5 …Expectations 6.3 …Previous 6.3

GMT 9:00 IST 14:30 EU Biz Climate
94.5 …Expectations 95.7 …Previous 95.7

GMT 12:30 IST 18:00 US GDP
…Expectations 3.0 …Previous 3.8

GMT 13:15 IST 18:45 ECB Mtg
…Expectations 2.15 …Previous 2.15

DATA YESTERDAY
================
GMT 0:30 IST 06:00 AU CPI
1.7 …Expectations 3.0 …Previous 2.1 …Actual 3.2

GMT 13:45 IST 19:15 BOC Meeting
…Expectations 2.25 …Previous 2.50 …Actual 2.25

GMT 18:00 IST 23:30 US FOMC Meeting
…Expectations <4.00 ...Previous <4.25 ...Actual <4.00