STOCKS
Dow (22359.23, -0.24%) saw its first dip in the last 9-sessions and this could possibly be limited to 22200 from where the index may again resume its uptrend.
Dax (12600.03, +0.25%) is almost posed to move higher and could crawl up towards 12800 in the near term. Thereafter a sharp corrective dip could be possible.
Nikkei (20298.87, -0.24%) came off from levels near 20500(our mentioned target) and could come down to test 20100 in the coming sessions. The US-Japan 10Yr yield (2.25%) is trading near resistance levels and if that holds could come off sharply towards 2.2% or lower. Also the Dollar Yen has decent resistance above current levels. This could indicate an upcoming fall in Nikkei, the yield spread and Dollar Yen in the near term.
Shanghai (3345.88, -0.36%) could be headed towards 3320 in the coming sessions. 3320 is a medium term support which could hold and push back the price to higher levels. Near term looks bearish for shanghai given the weakness in Copper (2.91) which could head towards 2.85 soon.
Nifty (10121.90, -0.19%) made an intra-day low of 10058 yesterday before rising to close at higher levels. The resistance on the 3-day line chart seems to be working well for now and while that holds, the index could come down towards 10000 or lower in the near term.
COMMODITIES
Gold (1296.48) is almost stable below 1300. Immediate support seen near 1280 which if holds could take the price to higher levels of 1315-1320; else a sharp dip towards 1280 initially is possible followed by some more extension on the downside.
Silver (17.02) is trading slightly higher. May trade within 17.25-16.75 in the next couple of sessions.
Brent (56.36) has moved up from levels near 56.20. As mentioned yesterday, 56.55-57.20 is an important resistance zone to keep an eye on. On the other hand, unlike Brent, WTI (50.59) has dipped slightly and doesn’t look very strong just now. There is some scope of coming off to 50.00-49.50 in the near term.
Copper (2.9120) has broken the immediate support levels. It could now be headed towards 2.85 in the coming week. Near term looks bearish.
FOREX
A slight uptick in the German-US 10Yr Spread (-1.81%, see Interest Rates below) has helped the Euro (1.1952) move up since yesterday. As such, the overall uptrend still remains intact and unless there is a sharp decline today, we have to be open to chances of further rise.
In line with yesterday’s warning, the Aussie (0.7922), however, has broken rank with the Euro and has broken below 0.7950 as well, on dovishness from the RBA Governor. A clear top is in place now and the uptrend since 0.7329 (May ’17) is broken. A slow dip to 0.7850 is possible now.
The Pound (1.3584) has moved back up a bit yesterday, consolidating between 1.3450-3600+. Maybe the upmove will exhaust itself near 1.38.
Dollar-Yen (111.72) remains in an overall uptrend that can still move up to 113.50-60 before it exhausts itself. In case of a break above 113.50, look for 115.00. The Euro-Yen (133.52) too remains in an uptrend and might move up to 136 before any profit-taking sets in.
The Dollar Index (91.99), has come down again, heavily influenced by the rise in the Euro. Thus, the overall downtrend still remains in force, but we are not sure whether the earlier Low of 91.01 (8th Sep) will be broken or not.
Dollar-Yuan (6.5855) is attempting to rise past 6.60 and might see success if and while it remains above 6.5750. Dollar-Rupee (64.81) rose sharply to a high of 64.8425 yesterday and may rise some more while above 64.50 now.
INTEREST RATES
US yields have dipped a bit, a day after the FOMC. The US 10Yr (2.26%) is down from 2.28%, the 5Yr (1.87%) is down marginally from 1.88%.
At the same time, the German-US 10Yr has moved up 3 bp, from -1.84% to -1.81%, as the German 10Yr (0.45%) has also moved up by 1 bp. Still, as mentioned yesterday, the uptrend in the German-US 10Yr Spread since -2.16% (April 2017) is clearly broken now. Upside may be limited to -1.77%, while the downside may be open to -1.85% and even -1.90%. We have to see how this impacts the Euro in the medium-term.
Coming back to US yields, the Curve has flattened further, as the 30Yr (2.79%) has dipped a bit from 2.81% seen after the FOMC. Yesterday, the flattening was due to an uptick in the 5Yr and 10Yr rates. Today, the flattening is due to a dip in the 30Yr.
The Indian 10Yr GOI (6.6749%) saw large jump yesterday as FIIs probably sold Indian after the FOMC. However, there is strong/ crucial Resistance coming up near 6.7000-7250% overhead, which could hold. That could limit the upside in Dollar-Rupee to 65.00-25.
