STOCKS
Almost all the major equity indices are marginally up today and look bullish for the near term.
Dow (23590.83, +0.69%) has risen exactly as expected to levels near 23600. While there is more room on the upside towards 24000 and higher on the weekly candles, the 3-day and daily charts suggest little room on the upside with resistances coming up near 23750-23800 region. Note that the earlier resistance mentioned near 23600 has now risen by 150-200points. Near term looks bullish.
Dax (13167.54, +0.83%) has moved up above 13100 contrary to our expectation of a narrow sideways consolidation. While above 13100, index looks bullish towards 13200-13300 or even higher in the coming sessions. The horizontal support on the daily candles and the 21-MA support on the 3-day line charts seem to be holding well for now.
Nikkei (22590.27, +0.78%) is slowly inching up towards 22800 which could act as a decent resistance in the near term. Only a break above 22800, would we focus on testing higher levels of 23200-23400 in the medium term. Important to keep an eye on the US-Japan 10yr yield and Dollar Yen for further directional cues. Although important and long term resistances are hovering not much higher than current levels for Dollar Yen and Nikkei, a sharp rejection to indicate a reversal is not visible yet. Till then immediate view continues to remain bullish.
Shanghai (3435.41, +0.73%) has also been sharply moving up in the past 2 sessions. While the upward momentum continues, the rise could continue towards 3440-3460 in the next few sessions.
Nifty (10326.90, +0.27%) has risen decently yesterday and as mentioned yesterday, could be headed towards 10400-10500 levels with some interim dips.
COMMODITIES
Gold (1279.25) is almost stable with no major movement visible. Price is stuck within 1300-1270 region and could be trapped in the sideways consolidation for some more time before eventually trying to move up.
Brent (63.07) looks bullish and could move up towards 64.00-64.60 again in the coming sessions. WTI (57.65) is also trading higher and could test 58-59 in the next couple of sessions before pausing in the near term. Levels near 59 would be an important resistance for WTI as seen on the 3-day candles. A break above that is needed to turn bullish for the longer term.
The Brent-WTI Spread (5.42) has been coming down sharply from resistance near 7 and could test 5.00-4.50 before again bouncing back towards 6.
Copper (3.1255) has moved above immediate resistance at 3.10 and the price could now well test 3.15-3.20 before pausing again.
FOREX
Dollar Index (93.94) is stuck along the support levels of 93.50 but has not seen a sharp bounce yet. While both Euro and Dollar Index has immediate supports, the one on the Dollar Index looks more likely to hold. Else the index could see some more of sideways consolidation in the near term.
EURO (1.1735) is trading near earlier resistance turned support of 1.17 and while it holds a decent bounce back towards 1.1800-1.1850 is possible. Else a break below 1.17 could turn bearish for Euro in the near term.
Dollar-Yen (112.28) is stuck near 112.30 for the past 3-sessions. Support is visible on the daily candles near 112 which if holds can push back the price towards 113.0-113.5 in the near term; else a break below 112 is needed to see a sharp fall towards 111-110 in the longer run. An immediate bounce if seen could take up Nikkei also in the near term.
The Pound (1.3250) is almost stable near previous levels. Immediate resistance is visible near 1.33 from where a rejection is likely.
The Aussie (0.7565) is trading above the weekly support at 0.75 and while that holds, Aussie could move up towards 0.76-0.77 soon.
It would be crucial to watch if Dollar-Rupee (64.8850) bounces back towards 65.0-65.1 or moves lower to test 64.80. A bounce would be preferred just now while there could be scope of 64.60 if 64.80 breaks on the downside.
The Chinese Yuan (6.6311) is trading slightly weak against the US Dollar and could test 6.64 before again strengthening towards 6.62.
INTEREST RATES
The US yields are trading just near support levels and could possibly see a bounce in the near term. The 5Yr (2.10%), 10Yr (2.35%) and the 30YR (2.75%) are all up by 1bps and may move higher in the coming sessions.
The US yield differentials have all fallen sharply. The 10-5Yr (0.26%) is down from 0.34% within a week’s time while the 30-10Yr (0.40%) and the 30-5Yr (0.66%) are also trading at much lower levels. A faster bounce in the 5Yr and 10Yr compared to the 30Yr could lead to some recovery in the yield differentials.
The US-Japan 10Yr (2.33%) is yet to test resistance near 2.36% which now looks possible by the weekend. A rejection from there would be necessary to see some Yen strength in the near term.
The German-US 10Yr (-2%) is stable could test medium term support near -2.05%.
