STOCKS
Dow (24505.22, +0.99%) has seen a sharp bounce from levels near 23500, keeping our earlier mentioned 23500-24500 region intact. Trade region is narrowing for the coming sessions by the trendlines as indicated on the daily candles. A break on either side of the range is likely over the coming week.
After a sharp bounce from 11800 on Wednesday, Dax (12305.19, +2.90%) traded near 12200 yesterday. The daily resistance near 12300 is holding for now and while that holds, Dax is also likely to trade in the broad 12300-11700 region for the coming sessions. A fall back towards 11800-11700 is possible while below 12300. On the alternative, a sustained break above 12300 is needed to initiate a fresh rise for the medium term.
Nikkei (21679.13, +0.16%) has tried to bounce from levels near 20600 and is trading higher but it seems there is lack of upside momentum just now. If the Dollar Yen manages to break above 107.00-107.50 in the coming sessions, it could pull up Nikkei too to levels near 22200 or higher.
Nifty (10325.15, +1.94%) rose sharply to levels above 10260. There could be some upmove while the rise sustains, taking the index towards 10400-10500 in the near term. Also note interim resistance near 10370 which if holds could produce a small dip before the index rises to 10400 and higher. Sensex (33596.80, +1.75%) could attempt a rise towards 34000.
COMMODITIES
Brent (68.00) and Nymex WTI (63.18) have both come off slightly as expected. A fall towards 67-66 and 62-61 respectively looks likely in the coming sessions before the crude prices move higher afresh.
Gold (1334.90) is likely to trade sideways within the broad 1310-1360 region for the coming sessions. A break on either side is needed to get an indication of further directional course for the longer run.
Copper (3.0375) could trade in the 2.95-3.10 region for the next couple of weeks. Support near 2.95 is likely to hold in the longer run but some sideways consolidation in the 2.95-3.10 region is expected before the price rises towards 3.15-3.20 again in the longer run.
FOREX
As per our expectation, Dollar index (90.34, high of 90.59 yesterday), after having breached resistance in the downward channel (daily candles) earlier this week, has moved further up possibly targeting higher resistance (90.75-91.00 – seen on daily line chart, weekly line chart and 3 day candles). 90.75-91.00 is seen as a strong resistance level. If breached, it could lead to medium term bullishness for the Dollar.
As we had been expecting, Euro (1.2256) did test lower support on daily candles (near 1.2225) by dropping to a low of 1.2218 yesterday and is currently trading slightly above support. The 21 weeks moving average line is at 1.2150 currently and if it breaks, it could be termed as a decisive bearish turn for the Euro in the medium term. However, while above 1.2150, Euro could again move back up towards 1.25 – thereby continuing its broad ranging between 1.255-1.215 since Jan end.
Dollar Yen (107.20) has decisively breached resistance near 106.9 in the downward channel on daily, 3 day and weekly candles. Could this be an indicator of medium term bullishness? If Dollar Yen moves beyond its previous high of 107.90 (seen in Feb end), a medium term bullish view could take preference.
Euro Yen (131.37) is respecting resistance in the downward channel on 3 day and weekly candles near 131.4-131.5 and might come down from here towards 130. However, there is possibility for the Euro to rise from current support and Dollar Yen to rise towards 107.90 – if that happens, then the downward channel for Euro Yen would be breached. If we reverse the hypothesis, could resistance on Euro Yen imply that both Euro and Dollar Yen will dip further? We should get to know this in the next week.
Pound (1.4015) has broken interim support trendline on daily candles and as per our expectation has moved lower, possibly targeting important support level near 1.395 on daily and 3 day candles.
Dollar Rupee (64.96) – Dollar-Rupee could lean towards the downside, especially if it closes below 64.90 today.
INTEREST RATES
US long term yields had bounced yesterday from supports on short term charts towards channel resistances and might see a dip from there next week again. The US CPI data release next week (11th April) could be important for yields. We have been saying that US yields could continue moving in a downward channel through Apr-May.
US 10 Yr Yield (2.82%), 30 Yr (3.06%), 5 Yr (2.62%), 2 Yr (2.29%) :
The 10 Year yield had risen from support near 2.75% on the short term chart to 2.80% yesterday and is currently near 2.82%. It could move up further towards 2.85%-2.86%, which could be a resistance level in the downward channel.
The 30 yr yield instead of dipping from resistance near 3.05% has moved up further towards 3.06%. It could see a dip soon, back into the channel, or else it could move up towards 3.10%-3.12% and dip from there.
