STOCKS
Almost all the below mentioned stock indices are bullish for the near to medium term. A short bull run in global equities is expected in the coming sessions.
Dow (24776.59, +1.31%) has moved up sharply and could continue to move up towards 25250 in the next few sessions where it would face its immediate resistance as seen on the daily candles. Break above 25250, if seen could take it higher towards 25600; else a fall back towards 24500 is possible.
Dax (12543.89, +0.38%) has also moved up sharply and looks bullish in the near to medium term towards 13000. The support near 12200, seen on the weekly candles is holding well for now.
Nikkei (22278.51, +1.03%) has also moved up and was unable to stay below 22200 for long. Clearly, the bulls could take the index higher towards 22800-23000 levels in the coming sessions. 22800-23000 could act as crucial resistance, a make or break on either side would be the trigger for long term direction of the index.
Shanghai (2817.44, +0.083%) has also bounced back in the last 2-sessions but a sustained break above 2850 is needed to prevent another fall below 2800 in the near to medium term. While below 2850, chances of re-testing 2750-2700 remains. Near term could be bullish.
Nifty (10852.90, +0.74%) having broken above 10800, if sustains for a couple of more sessions could indicate upcoming bullishness towards 10950.
COMMODITIES
Brent (78.37) is almost stable and unable to decide which direction to take just now. Upside is limited to 80-81 which is an important medium term resistance and is expected to hold for now. A test of 79-80 levels in the near term looks possible followed by a fall towards 77-76 in the medium term.
Nymex WTI (74.01) is trading just below immediate resistance near 75.0-75.50 and while that holds, the price could come off towards 72 and lower again in the medium term.
Gold (1260.40, +0.06%) is trying to slowly move up. Upside could be limited to 1270/80 in the near term. Price looks bullish towards 1280 while above 1240.
Copper (2.8695) has risen from 2.8610 seen yesterday. Immediate resistance is seen near 2.90. While that holds, chance of seeing another dip is possible. Watch price action near current levels. In case the price manages to rise above 2.90/95, a medium term upmove could begin.
FOREX
Euro (1.1752): Euro rose to 1.179 yesterday but dipped from there back to levels near 1.175. There is support on daily candles near 1.173-1.174 which might be tested today, after which the Euro might again rise from there towards 1.18. There is crucial resistance near 1.181-1.182 whose breach would be very bullish for the Euro.
Dollar Index (94.09): Dollar Index tested support on daily candles near 93.7 yesterday and has risen again from there. The 34 days MA near 94.3 could provide some resistance on the upside. Current preference is for a downmove towards the 13 weeks MA near 93.44 in the sessions ahead.
Dollar Yen (111.02): In line with yesterday’s forecast, Dollar Yen has moved up from levels near 110.5 and might have this upmove restricted till 111.0-111.5 by long term resistance. A break below 110 would be necessary for bearishness and might take place by next week.
Euro Yen (130.49): As per our expectation, Euro Yen has gone up to levels near 130-131 on the back of bullishness in Dollar Yen. Although this has led to a break of resistance on daily line chart, it might turn out to be a false break and Euro Yen might again dip from next week. If Dollar Yen breaches above 111.5, we would have to revisit the medium term bearish view on Euro Yen.
Pound (1.3250): Pound saw a high of 1.3363 yesterday (breaching resistance on daily candles) and has now dipped back into the downward channel from there. While above 1.3250, it could again breach 1.33. A break of 1.3250 could take it lower towards 1.31-1.30. Political instability in Britain could further add to Pound’s weakness.
Dollar Rupee (68.72): Dollar-Rupee likely to come down – either on immediate break below 68.60-40 or after a rally to 69.10-20.
INTEREST RATES
US yields have risen slightly as the Treasury Department gears up to hold bond auctions for $ 69 bn worth of bonds.
US 10 year yield (2.86%), 30 Year (2.97%), 5 Year (2.76%), 2 Year (2.56%):
The US 30 Year yield has tested support on medium term chart near 2.95% (yesterday mentioned as 2.9%) and might have its downside restricted till that level. There might be some pause in the US-China trade war developments after last week’s tariffs. That, coupled with a surge in equity markets and also greater supply of bonds, could help decrease bond prices and raise yields.
However, we would have to be aware that there is still some room for the US 10 Year to dip to 2.75%.
