STOCKS
Recovery is seen in global equities and they are likely to move up in the near term before another leg of fall starts.
Dow (25115.76, +0.97%) has broken above the immediate channel resistance on the daily candles and could not head higher to test 25500-26000 levels in the near term from where a rejection could be expected. Immediate view is a rise towards 26000.
Dax (11447.51, +1.42%) is looking bullish just now and could target 11800 in the near to medium term while above 11000-11200.
Nikkei (21794.31, -0.58%) has moved up a bit and is trying to recover back towards 22500 which could be a decent resistance on the weekly candles. A break above 22500 is needed for a fresh medium term rise; else 22500 could produce rejection to push the index back towards 21500.
Shanghai (2628.57, +0.99%) is also slowly moving up and could be headed towards 2700 in the near term which is an immediate resistance on the daily candles.
Nifty (10386.60, +1.85%) also bounced back well yesterday. If the rise sustains, the index could now be headed towards 10600-10800. Else a fall from 10400 could again send it back to 10200-10050 levels in the next few sessions.
COMMODITIES
Potential supply disruption is a worry that still looms till the Iran sanction date of 4th Nov and its impact is seen. Some stability could be seen in the next few sessions before any trigger again initiates some volatile moves next week.
Crude prices have fallen from yesterday’s levels. Although the prices seem to have cooled off just now, we need to keep an eye on the important support levels near 65-64 and 74 on WTI and Brent respectively.
Brent (74.75) has come off from immediate resistance at 77-78 as mentioned in the last few editions. But note long term support near 74 which if holds could bring another leg of bounce in the near term. It on a break below 74 would we review chances of further downside.
WTI (65.11) is also trading above long term support near 65-64 levels.
We need to be cautious at current levels as a bounce back in crude prices could be on the cards for the coming week.
Gold (1219.20) has moved below 1220 and while the US Dollar continues to strengthen, gold could well head towards 1210-1200 again in the coming weeks. Important resistance to watch would be 1240 while downside could be capped at 1200.
14 and lower at 13.5 are important near term supports for Silver (14.32) and could be tested before a bounce back is seen next week towards 14.5 or higher. Near term looks bearish towards 13.5.
Copper 2.6595 has dipped further and trades above crucial near term support at 2.65-2.60 region. This needs to hold to push back the prices towards 2.8-2.9 again in the medium term. A break below 2.60 could make it vulnerable for a fall towards 2.55-2.50 levels.
FOREX
Chances of an interim rise in Euro, Pound and Aussie towards 1.138, 1.29 and 0.7175 respectively. Could that keep the upside for USDINR capped near 74.20 in the next few sessions?
Euro (1.1341) tested a low of 1.1302 yesterday (close to its 2018 low of 1.1301) and has risen from there. It has immediate resistance near 1.135, which if broken could lead to a test of higher resistance near 1.138-1.140 in the next couple of sessions. However, there are good chances of an ultimate break below 1.1301 taking place in the next couple of weeks.
Dollar Index (96.88) tested resistance on daily candles near 97.20 yesterday and has dipped from there. It could come off towards 96.70-50 in the next couple of sessions but ultimately looks headed higher in the medium term.
Dollar Yen (112.84) could dip more to test immediate support near 112.40-50 in the next 1-2 sessions. While it stays above 112.40, the bias is tilted towards a re-test of levels near 114 in the next 1-2 weeks.
Euro-Yen (127.97) has crucial channel resistance near 128.5. It could continue being bearish while below this resistance, targeting support near 127 on weekly candles in the next 1-2 sessions.
Pound (1.2845) has bounced from crucial support at 1.27 on daily line chart and could now move up towards resistance near 1.29-1.30 by next week.
Aussie (0.7115) could move up further to test resistance near 0.7150-0.7175 by next week. Meanwhile, the support at 0.705-0.706 continues to stay strong for the Aussie. However while below 0.7175, the possibility of the support breaking in the weeks ahead cannot be ignored. On weekly line chart, this level is seen as a crucial long term support, whose break could lead to sustained bearishness.#
Dollar Rupee (73.955) – Could stay between 73.70-74.20 in the next 2-3 sessions. After that, a rise to 74.50 is likely in the next week. If 74.50 is then breached, it would open up 75+.
INTEREST RATES
The US 10 Year (3.16%), as forecasted yesterday, has moved up towards 3.16%.. It is now testing channel resistance on near term chart and could come off from here back towards 3.10% by next week. However, in case this resistance breaks, it could target 3.20% next week.
Inspite of the BoJ leaving rates and policy unchanged, Japanese 10 year yield (0.14%) has risen from 0.106% on Monday to 0.14%. The Japanese 5 year yield (-0.064%) has also risen from -0.086% at the beginning of the week. However strong resistance for the 5 year yield near -0.052% suggests that the upside might be capped for both 5 year and 10 year yields in the near term.
