STOCKS
Dow (25199.29, +0.32%) has almost moved up to test immediate resistance at 25250. Dow looks bullish just now with 4-sessions of upmove. If the index manages to break above 25250, it could continue to rally towards 25600 in the medium term.
Dax (12765.94, +0.82%) is also moving up and could target 13000 in the coming sessions. Note that 13000 is an important resistance and may hold in the medium term pushing the index back towards 12400-12200 levels.
Nikkei (22870.47, +0.33%) did not further rise after breaking above 22800 but is stable in the past 2-sessions. There is enough scope on the upside while above 22800 and the index may soon move up towards 23000-23200 in the near term. View remains bullish above 22800.
Shanghai (2791.21, +0.14%) seems to be stuck in the 2850-2750 region and has been trading narrow in the last few sessions. A re-test if 2750 seems likely before rising back to 2850. Some sessions of sideways trade also looks possible just now.
Nifty (10980.45, -0.25%) has immediate support near 10950 (risen from earlier 10900-10850 levels). While 10950 holds, Nifty may see an immediate bounce back from current levels towards 11100-11200 in the next few sessions. A break below 10950, if seen would make it vulnerable to a fall towards 10850-10800 again in the medium term. Watch price action near 10950.
COMMODITIES
Nymex WTI (68.81) has risen from 67 and while the price trades higher, it could attempt a test of 72 on the upside. A fall from levels near 70, if seen could open up chances of further fall towards 66-65 in the medium term. For now while above 67, price is likely to move up.
Brent (72.83, -0.10%) has also held immediate support near 71. Lower support is visible at 69-70 region. We would be cautious to see if Brent moves up immediately towards 75+ levels or comes back to test 70-69 before resuming uptrend in the longer run.
Gold (1224.40, -0.29%) does not look as if it may pause near current levels. While the bears looks string, there could be chances of a fall towards 1200 in the medium term before the price could see a corrective rise. Near to medium term looks bearish.
Copper (2.7585, -0.0505%) is trading in a sideways narrow range of 2.80-2.70 and could continue this week. While 2.70 holds as decent support, Copper could eventually move up in the longer run.
FOREX
Euro (1.1644): In line with our expectation, Euro almost tested the support on 3 day candles by seeing a low of 1.1602. The support has held and the Euro might now try to move up towards 1.1715, which is a crucial resistance. A break above 1.1715 could suggest that a medium term bottom is in place, suggesting a rise to 1.18+. Failure to break above 1.1715 by middle of next week can create chances of fall towards 1.15 and lower.
Dollar Index (95.08): Dollar Index tested resistance (earlier support) on daily candles near 95.41 yesterday and has then dipped from there. It could now move lower towards the 21 days MA (94.67) which would also correspond well with a rise in the Euro towards 1.1715.
Dollar Yen (112.74): Dollar Yen might be facing some resistance near 113. We currently prefer further bullishness towards 114 (resistance on 3 day line chart) which might be tested in the next week. A break below 112.2-112.3 could however be bearish and the upside target of 114 would have to be re-examined.
Euro Yen (131.29): Euro Yen is continuing to respect the 55 weeks MA near 131.58. Dollar Yen’s pause below 113 is delaying the break of 131.58 by Euro Yen. A rise towards 1.17 on the Euro could however help Euro Yen rise above 131.58 in the early part of next week.
Pound (1.3071): Pound saw a low near 1.3010 yesterday and might be on course to break crucial horizontal support near 1.305 on weekly candles. A downmove to 1.295-1.290 in the next week is possible. This break is likely to make Pound bearish in the weeks ahead.
Dollar Rupee (68.615): Dollar Rupee moved up to close at higher levels yesterday. Further Rupee weakness beyond 68.70 is not envisaged just now but could be triggered if Yuan moves beyond 6.74 and Dollar Index breaks above 95.5 (less preferred).
INTEREST RATES
US yields have risen after a series of events which have reaffirmed the growing inflationary pressures in the US economy and the Fed’s inclination to hike rates at regular intervals. At first, US Retail Sales rose decently; then, the Fed Chairman appeared optimistic about US growth and inflation in front of different US government committees; after that, the Fed’s Beige book also highlighted the tightening labour market.
Consequently the US 10 year yield has risen to 2.89%. It could get some resistance near 2.9% now. If it breaches 2.9%, then it could attempt a test of 2.95% as well. We would have to revisit our view of a dip towards 2.7% in the next couple of months if the 10 year yield does manage to break above 2.9%.
US 10 year yield (2.89%), 30 Year (3.00%), 5 Year (2.78%), 2 Year (2.62%)
The German 10 year yield (0.34%) could see a rise towards resistance near 0.4% on short term chart in the next 2-3 sessions.
