STOCKS
Globally, the Bulls are putting up a bit of a fight and could move up a little more in the next week or two. Unsure of movement after that. Movement is choppy in most markets.
Good bounce back in the Dow (24022.36, +389.17, +1.65%) yesterday, recouping the losses seen on Monday. This is in line with our view of near-term range trade between 23500-24500.
The DAX (12002.45) is trading in a narrow range of 11900-12200 within a broader downward channel of 11700-12300. A rise towards 12300 is a possibility we are looking at.
Contrary to expectation of a fall to 21000-20800, the Nikkei (21273) closed at 21292.29 yesterday and has seen a high near 21415 today. This could be due to a relatively higher Dollar-Yen (106.50). A further rise to 107 (if seen) on Dollar-Yen could take Nikkei up to 21900.
As mentioned yesterday, the Shanghai (3157.98) is ranged between 3100-3200 in the near term. Medium term Support seen at 3100, near-term Resistance seen at 3200. A break of either of these is needed to set the trend for the coming weeks.
The Nifty (10245) has tested the 10260 Resistance mentioned yesterday. We need to see if it falls back today, as expected yesterday, or rises to break above 10260.
COMMODITIES
Brent (67.91) as mentioned yesterday, is looking bearish in the near term and could come down towards 66 in the next 1-2 weeks (seen as support on weekly and 3 day candles).
FOREX
The Dollar index (90.077) saw a high of 90.28 yesterday thereby breaching resistance near 90.10 in the downward channel on daily candles. It is currently trading slightly lower near 90.10 (near the resistance level). It might now move towards higher resistance (seen on weekly line chart and 3 day candles) near 91.
Euro (1.2281) saw a low of 1.2254 yesterday, thereby testing support on 3 day candles. On the daily candles, there is still some scope for a downmove towards lower support near 1.2225. A break of the same would imply medium term bearishness.
We had predicted yesterday that Dollar Yen (106.47) might be paused in its downmove by the 13 days moving average line on the daily line chart ; however, the Dollar Yen hasn’t only paused, but has bounced from there back towards resistance on daily candles. It could again test this resistance near 106.9 in the next 1-2 sessions, after which a dip could be expected.
Euro Yen (130.76) contrary to expectation hasn’t continued its dip towards support near 129.5-129.0 on daily candles due to the Yen’s sudden strength yesterday. However, there is immediate resistance on daily candles now at 131 which should lead to a dip. There is resistance on Dollar Yen near 106.9 too (as mentioned above) and scope for Euro to move lower to 1.2225, which should both combine to make Euro Yen possibly stay below 131.
Pound (1.4088) seems to have found some temporary support (provided by the 21 days moving average on the daily line chart) but is still likely to move down in the short term towards support near 1.395-1.390 (seen on daily candles, 3 day candles, 3 day line chart).
Dollar Rupee (65.015) – Can dip to 64.90-85.
INTEREST RATES
US long term yields as per our expectation yesterday have found some support after the continuous dip for the last few days. However, we might still see a slow and gradual decline in yields through Apr-May.
US 10 Yr Yield (2.7771%), 30 Yr (3.0142%), 5 Yr (2.5974%), 2 Yr (2.274%) :
The 10 Year yield seems to have indeed found support near 2.75% on the medium term chart (we had predicted yesterday that the support might be lower near 2.7%). It might now rise back towards 2.8% over the next 2-3 sessions.
The 30 yr yield as per expectation has seen a bounce from levels near 2.97% (seen as support in the downward channel on short term chart). It might now rise towards resistance near 3.05% in the channel and dip from there.
