STOCKS
The US Federal Reserve cited that the rates could either way while the market seems to have weighed more for a “no rate cut” going forward. As a result some profits have been taken-off from the US equities overnight.
Dow (26430.14, -162.77, -0.61%) has declined sharply. Immediate support is at 26410 – the 21-day moving average, a break below which can take it to 26250 and 26210 before we see a rise to 26750-27000.
DAX (12344.08) was closed yesterday. It has to be seen if it holds above 12250 to keep the bullish outlook intact for a rise to 12450-12500. A break below 12250 can drag it to 12200-12180.
Sensex (39031.55, -35.78, -0.09%) remains mixed and range bound between 38500 and 39500. We have to wait for this range to break to give clarity on the next move.
Nifty (11748.15, -6.50, -0.06%) can test the crucial resistance at 11800. A pull-back from there can retain the 11550-11800 sideways rage. A break above 11800 if seen can take it higher to 11900.
Japan’s Nikkei and China’s Shanghai are closed for the rest of the week on account of public holidays.
COMMODITIES
Commodities trade under pressure. Gold has dipped within its sideways consolidation and remains bearish. Silver and Copper have declined below their crucial supports and looks vulnerable for further fall. Oil remains bearish although it has seen some uptick from the recent lows. On one hand the concerns are high on the supply disruption due to Iran sanction and crisis in Venezeula. On the other hand, the US oil inventories are building up. This makes it interesting to watch the oil market.
Gold (1274) can dip to 1268. A bounce from there can take it to 1277-1280 again and keep it range bound for some more time before we see a fresh fall to 1260-1255.
Silver (14.65) is under pressure as it has declined below the crucial support level of 14.75. It can test 14.50 in the near term. The outlook is bearish for a fall to 14 while it trades below 14.80.
As expected, Copper (2.80) has fallen, indeed much beyond our expected level of 2.84. It can test 2.78-2.77 and then see a corrective rally to 2.83-2.84.
WTI (63.60) has cluster of resistances between 63.9 and 64.3. We expect the upside to be restricted to this resistance zone. The outlook remains bearish for a fall to 62 and 61.
Brent (72.10) is getting support near 71 now. But the resistance at 72.7 can cap the upside and keep the bearish view intact for a test of 70-69.8 in the coming days.
FOREX
FED kept interest rates unchanged. US Dollar Index (97.65) tested 97.15 yesterday before moving up to current levels. While the index sustains above 97.15/25, it could rise towards 98 or higher in the near term.
The Euro (1.12) made an intra-day high of 1.1265 yesterday after the FED policy statement, moving closer to our expected 1.13 mentioned on Tuesday. 1.13 is an important resistance on the 3-day candles and while that holds, Euro could continue to dip towards 1.11 again in the next few sessions.
The Euro-Yen (125.08) could rise towards 126.00/50 in the near term which could act as a decent resistance pushing the pair back towards 124 eventually. For now the view is bullish.
Dollar-Yen (111.65) tested 111.04 yesterday in line with the 111 support as seen on the daily candles before bouncing back from there. While support at 111 holds, Dollar-Yen could again rise towards 112.50.
The Aussie (0.7021) trades above support at 0.70 and while that holds, Aussie could attempt to rise towards 0.7100-0.7150 in the near term. While above 0.70, Aussie looks bullish just now.
USDCNY (6.7336) is stable near current levels but has some room on the upside towards 6.75/76 levels from where a fall back to 6.72/70 is possible. In the medium term Yuan could strengthen again towards 6.70.
Dollar-Rupee (69.57) did come down sharply to test 69.50 as expected on Tuesday. While immediate support at 69.50 holds, we could possibly see a bounce from here back towards 69.75/70.00 in the near term. A test of 69 would come into picture if our mentioned support at 69.50 breaks. For now a bounce from 69.50 looks more likely.
INTEREST RATES
The FED kept interest rates unchanged and noted that the inflation is running below the stated target of 2%. FED reiterated that it would be patient and would continue to monitor upcoming data releases.
The US Yields are trading lower. The 10Yr (2.50%) and the 30Yr (2.90%) have fallen as expected from respective resistances near 2.55% and 2.98% as mentioned on Tuesday and while the resistances hold, the 10YR and 30Yr could continue to fall towards 2.48/45% and 2.87/85% in the near term. Overall the US yields look weak.
The UK-US 10Yr (-1.35%) is trading just below trend resistance and could fall from here targeting -1.38% or lower. This could be bearish for Pound (1.3054) in the coming sessions.
The German 30YR (0.655%) and the 10Yr (0.015%) have risen and test immediate resistance near current levels. A fall from here is possible in the next few sessions towards 0.60-0.50% and -0.10% respectively.
The 10Yr GOI (7.5276%) could remain above 7.48% and rise towards 7.60/65% in the near term. View is bullish.
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