The Fed decision, U.K. GDP & India WPI. Can we expect volatility in the market?

The FED Decision UK, GDP & Indian WPI. Can we expect volatility in the market?

The U.S. dollar extended its fall for the third consecutive day. It dropped below the 23 May 2023 low after the China central bank cut its short-term lending rate.  Further, U.S. inflation reading on a yearly basis increased slightly in more than two years, cementing expectations that the Federal Reserve may pause interest rate hikes at its two-day meeting ending on Wednesday.

The U.S. consumer price index (CPI) edged up 0.1% last month as gasoline prices fell, after increasing 0.4% in April. After increasing by 4.9% in April, the CPI increased by 4.0% in the 12 months to May, which is the smallest year-over-year gain since March 2021.

So-called core CPI increased 0.4% in May, however, the same percentage rise for the third straight month.

Precious metals took a steep fall yesterday. Gold prices fell by 0.71% and settled at 59218. Silver plunged nearly1.50% at 72094.00.

Today, Gold futures breached their immediate support of 59225 yesterday. Now prices may test next support 58850-58750.00. On the upside, immediate resistance is seen at 59650-59980.00

Silver Future has support at 71750.00-70950.00 and resistance at 72820-73350.00

 Base metals enjoyed after the Rate cut by the People’s Bank of China. It was a seven-day reverse repo rate by 10 basis points to 1.90% from 2.00%, its first such rate cut since the bank trimmed its Loan Prime Rate in August 2022.

Copper futures settled at 728.45, up 1.31%. Zinc prices are up by 1.54% at 214.90. Aluminum and Lead trade up by 0.25%.

Technical Levels – Copper prices now have immediate resistance at 731.50 above it 735.50-745.25. On the downside, support is seen at 725.50-718.50.

Crude oil witnessed more than 3.50% a speculative jump, recovering from steep losses the previous session after China’s central bank lowered a short-term lending rate for the first time in 10 months.

The rate drop, intended to boost the sluggish post-pandemic recovery in the second-largest economy in the world and the biggest consumer of petroleum, is anticipated to boost oil demand.

Brent Crude climbed 3.5%, to $74.50 a barrel. U.S. West Texas Intermediate (WTI) crude was up  3.4%, at $69.61 a barrel.MCX Crude settled at 5729, up 2.87%.

Technical Levels – Crude oil has immediate resistance 5825-5930.00. On the downside, crucial support is seen at 5600-5540.00.

Economic data and events to watch


At 11.30am – GDP m/m. Data is foreseen at 0.2%, higher than the contraction of 0.3%.  

Construction Output m/m.  Data is foreseen at 0.0%, a decrease from the previous 0.2%. 

Goods Trade Balance. Data is foreseen -16.5B against the previous -16.4B.

Industrial Production m/m. Data has foreseen a contraction of 0.1%, previous was at 0.7%.

Manufacturing Production m/m. Data is foreseen at the contraction of 0.1% against 0.7%.

All of the above data expect to have a negative impact on the pound.
Technical Levels –GBPINR has resistance at 103.85-104.15. Support is at 103.25-102.85.


Tentative – German WPI m/m to be released.  Data expected to come at -0.1%, from the previous -0.4%.

At 2.30 pm – Industrial Production m/m. Expect to come at 0.8%, against a contraction of 4.1%.

The Euro may benefit from both of the aforementioned pieces of information.

Technical Levels – EURINR has immediate resistance at 89.10-89.55 and support at 88.75-88.55.


At 6.00 pm – Core PPI m/m is to be released with a forecast to stay unchanged at 0.2% from the previous. Meanwhile, PPI m/m expects to reduce by -0.1% from the previous 0.2%.

At 6.00 pm – Core CPI m/m, data is foreseen at 0.4%, unchanged from the previous 0.4%.

At 8.00 pm – Crude Oil Inventories. Foreseen at the contraction of 0.8M against contraction of 0.5M.

At 11.30 pm – FOMC Economic Projections, FOMC Statement and Federal Funds Rate. The forecast is to remain unchanged at 5.25%.

All the above numbers will have a volatile impact on the dollar.

Technical Levels – The dollar index has crucial support at 102.95 below it will expect to extend losses and it could test 102.65-102.45. Upside resistance is located between 104.20 and 104.60. Yesterday, it remained above 103.047 levels.


At 12.00 – WPI inflation numbers on a YoY basis. The forecast is to have a contraction of 2.35%, against the previous contraction of 0.92%.

Above data could have a negative impact on the Rupee.Technical Levels- USDINR has immediate support at 82.10 below it pair could drop towards 81.90-81.75 very soon. On the upside, resistance is seen at 82.45-82.76