STOCKS
Global equities are mixed. Dow and Shanghai looks weak while Dax, Nikkei and Nifty have scope of rising in the near term.
Dow (25656.98, -0.30%) continued to dip yesterday also and seems to have come back to the 25750-25250 region trade. While below 25750, Dow could again come off to test 25250-25300 on the downside by early next week before another rise is seen.
Dax (12365.58, -0.16%) is stable. Trading in the middle of the 12200-12700 region, there is equal chances of moving on either direction. Looking at the longer term charts, Dax looks bullish towards 12600-12700 in the near term.
Nikkei (22488.68, +0.35%) is moving up in small movements on the daily candles. It is headed towards resistance near 22850 on the upside and while that holds, a dip again to current levels is possible in the medium term. Movement seems to be contracting within the 22850-22500 region.
Shanghai (2720.63, -0.15%) could be limited to 2750 on the upside just now. 3-day charts looks weak for Shanghai in the near term. A break above 2750 if seen and sustained would bring in some upmove towards 2800 or beyond. For now a fall back towards 2650 looks likely. Overall some sideways ranged-trade is possible within 2800-2650 region.
Nifty (11582.75, +0.10%) may move up to levels above 11600 again today. While the index trades above 11500, there is scope of eventual rise towards 11800. Near term looks bullish on a sustained rise above 11600.
COMMODITIES
Nymex WTI (68.21) has resistance at immediate levels and needs to break on the upside to continue rising towards 70. Note above 68.50, resistance is visible near 70.
Brent (75.05) could have resistance at 76 and then at 78 on the upside. Both are decent resistances and may hold in the near term. If 76 holds, we could see a dip back to 74-72 in the medium term.
Gold (1192.70) has some scope of re-testing 1180-1175 in the near term while below 1200. Some stable trade could be seen below 1200 for some more sessions.
Copper (2.65) faced rejection from the immediate resistance on the daily candles and while that holds, Copper could come off towards 2.55-2.50 region in the near term. View looks bearish just now.
FOREX
Crucial juncture in most currencies. There is a faint chance that the current Dollar strength could see a correction/ reversal next month. This current faint chance will suddenly become bigger if certain Support/ Resistances hold. For instance Support at 1.14 on Euro and Resistance at 6.8935 on USDCNY.
Dollar Index (95.59) is trading in the 95.5-96.0 resistance zone – a breach of the 13 days MA near 95.98 could take it higher towards 97 (in the coming week) and then, even higher towards 97.5 (maybe in the next to next week). The 97 to 98 zone is a crucial resistance zone, which could lead to a reversal in the medium term.
Euro (1.1553) is trading close to the mentioned Support range of 1.1550-25. A further dip below 1.1500 (if seen), might get us down to 1.1400 which might be a decent medium-term Support.
Dollar Yen (111.40): Has been unable to sustain below 110 and has risen above resistance on daily candles (110.75-111.00). As such, there may now be chances of seeing a rise to 112-113, as we have been suggesting.
Euro Yen (128.70): As mentioned yesterday, Euro Yen’s rise above the 21 days MA indicates that it could stay bullish towards 130 (resistance on daily line chart) – with a test of 130 happening some time in the next week.
Pound (1.2813) : In line with yesterday’s prediction, Pound has indeed moved down from resistance on 3 day candles near 1.294 to 1.28. A fall towards 1.27-1.26 is now likely next week.
Dollar Yuan (6.8861): Weakness in Yen and Aussie is being reflected in weakness in Chinese Yuan (6.8876) as well. Watch Resistance at 6.8935-50 over today-Monday. If that holds, there could be some chances of USDCNY topping out for some time.
Dollar Rupee (70.1175) : Strength in Dollar and Brent (if it continues today) would be crucial to take up USDINR to levels near 70.30/40. Else a dip back to 70 or lower is preferred in the near term.
INTEREST RATES
After the US FOMC Minutes revealed that the Fed is wary of some downside risks to growth from global trade tensions, ECB also in its minutes (released yesterday) expressed the same worries. This acknowledgement by major Central Banks and possible turmoil in the US Presidency could all add to the ‘risk off’ sentiment amongst investors.
Crucial levels to watch out are:
US 10 Year Yield (2.83%) : A break below 2.81%-2.80% would lead to a further decline towards 2.75%-2.74%
US 30 year (2.98%): A break below support near 2.98%-2.97% would be quite bearish.
German 10 year yield (0.34%): Could rise towards resistance near 0.4% on medium term chart (current preference is for 0.4% to not be breached – probably a gradual downtrend towards 0.18% could happen)
German-US 10Yr Spread (-2.49%) 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 – current preference is for the resistance to not be breached.
The Japanese 30Yr (0.83%) : Crucial Resistance near 0.85% – should hold for now.
