STOCKS
Asia-Pac looks bullish with Nikkei and Nifty targeting higher levels and Shanghai may remain stable. Dax is also headed to the upside while Dow could see a corrective dip just now followed by a rise next week.
Dow (25733.60, -0.34%) dipped a bit yesterday. If it fails to rise back above 25750 just now, the index could come back into the 25750-25250 zone for the coming sessions; else a rise towards 26000+ is possible.
Dax (12385.70, +0.0098%) has continued to move up. While above 12300, the index could move up towards 12500-12600 in the near term. View looks bullish.
Nikkei (22404.12, +0.19%) has risen from levels near 22000 this week and is moving up to target levels near 22800 again by next week. A break above 22800 in the current rally could validate the possible bullish shoulder-head-shoulder formation on the charts. Near term looks bullish.
Shanghai (2710.98, -0.13%) is trading stable. On the whole the downside scope still persists in the longer run but 2650 could hold just now and keep prices stable. A break above 2750-2800 is needed to indicate afresh move and negate a fall below 2650 in the medium term.
Nifty (11570.90, +0.17%) has scope of bullishness while above 11500. A rise towards 11600-11800 is on the cards in the medium term. We could see an attempt to move beyond 11600 this week.
COMMODITIES
Gold and Copper looks weak while crude prices could move up further in the near term.
Nymex WTI (67.97) and Brent (74.74) have both risen sharply after EIA data showed a sharp unexpected decline in the US crude inventories. 3-day candle support on Brent is holding well and can take prices towards 78 while WTI if moves beyond 68, could target 72 in the near term. View is bullish for now.
Gold (1197.70) has dipped back to 1197 from resistance on the daily candles. While the support at 1175 holds, Gold may trade in the 1175-1210 region. Note that 1210 is an immediate resistance and is likely to hold in the near term.
Copper (2.6385) is also coming off from immediate resistance near 2.70. While the resistance holds, the price could fall towards 2.55 or even lower in the near term.
FOREX
Dollar Index (95.40) has bounced after testing support on daily candles near 94.9 yesterday. There could be some resistance in the 95.5-96.0 zone – only on a breach of that can we look at higher levels of 97 in the next 1-2 weeks.
Euro (1.1556) is dipping after testing levels near 1.162 yesterday. There is support near 1.1550-1.1525, whose break would be required for further weakness towards 1.14. Keep a watch on the release of ECB minutes today.
Dollar Yen (110.85) is trading close to resistance near 110.75-111.00 on daily candles. Upon a breach above 111, we could again start looking at higher levels near 112-113. Till then, there still remain chances for another dip towards 110.
Euro Yen (128.11) has risen above the 21 days MA near 128.05, which indicates that it could stay bullish towards 130 (resistance on daily line chart) in the next 3-4 sessions.
Pound (1.2872) : After testing crucial resistance on weekly candles near 1.293 yesterday, it looks like Pound’s upward correction might be over and it might again dip towards 1.27-1.26 in the next week.
Dollar Rupee (69.815) could be capped in the broad 69.40-70.10 region in the near term. Strength in Euro above 1.155 could possibly impart some strength to Rupee as well.
INTEREST RATES
The US FOMC Minutes revealed that although the Fed is confident about US growth remaining strong in the months ahead, it still sees some downside risks to growth. This element of uncertainty in the minutes seems to have prevented any rise in US yields. The US 10yr (2.82%) tested 2.81% on the downside – a dip to 2.80% would compel us to then look at 2.75% or even lower. The 30Yr (2.98%) is at important Support (2.99%-2.97%) near current level – if this support breaks, it could be bearish for US long term yields.
German 10 year yield (0.34%) could rise towards resistance near 0.4% on medium term chart and while that happens, the German-US 10Yr Spread (-2.48%) could rise towards -2.45% – this is a crucial resistance level for the spread, which if breached, could make the spread bullish in the medium term.
The Japanese 30Yr (0.84%) continues to stay below crucial Resistance for now. A break above this level would be bullish for Japanese long term yields.
