STOCKS
Dow (26627.48, -0.75%) has fallen and tested support just below 26500 before bouncing back to close higher. While the support holds, the index could bounce back to test 27000 on the upside ; else a break below 26500, could make the index vulnerable to a further fall towards 26000.
Dax (12244.14, -0.35%) could trade below 12400 for some more sessions to possibly re-test crucial long term support near 12000. Thereafter an eventual rise towards 12400 and higher is on the cards as medium to long term looks bullish on the weekly candle chart.
Nikkei (23795.82, -0.75%) has come off sharply while resistance near 24400 is holding well. It could test 23400 on the downside before again bouncing back to higher levels.
There is decent support on the weekly candles just below current levels on the Nifty (10599.25, -2.39%). If that holds, the Nifty could rise back towards 10800 or higher in the near term. Failure to bounce back above 10800 just now could open up chances of breaking below 10600 next week.
COMMODITIES
Brent (85.02) and WTI (74.83) are down from immediate resistances near 86 and 77 respectively. Brent could see a short dip to 83 while WTI could come off towards 74 in the near term. Thereafter a rise back towards the previous highs looks likely. Note that we do not prefer a rise above $90 in the medium term and expect a near term top in place at $90 or at slightly lower levels.
Gold-WTI ratio (15.81) is looking bearish in the near term and could possibly head towards 15.0-14.5 in the medium term. Another week of sideways consolidation is possible in the 1210-1190 region before the price breaks on either side of the range.
Copper (2.7730) has dipped again to come back towards 2.75. Resistance at 2.85 looks strong in the near term and could keep the price stable for a few more sessions ranged in the 2.85-2.75 region. A break below 2.75, if seen could take it back to 2.70; else an attempt to rise beyond 2.85-2.90 is likely.
FOREX
The US NFP and employment data could be a crucial determinant of Dollar strength in the near term. A fall to 1.14-1.13 is preferred on the Euro in the next couple of weeks – this could weaken Rupee further.
Dollar Index (95.76) : While above 95.75, the index could move up to test long term resistance near 96.5 by early next week. Watch out for US employment data today – it could even trigger an eventual break above 96.5.
Euro (1.1511) : While below 1.153, Euro is likely to test support near 1.14 by early next week. It could even target the 200 weeks MA near 1.132 after that, in the next couple of weeks.
Dollar Yen (113.94): While above 113.9-113.8, it should test its Nov ’17 high of 115 by next week. Alternatively, a break below 113.8 could take it towards 113 next week. However, preference remains for a rise to 115.
Euro-Yen (131.16) : Support at 131 is holding for now. If Dollar Yen breaks below 113.8, Euro Yen could break the 131 support. However, given our preferred views on Euro and Dollar Yen, Euro Yen could be expected to stay stable above 131 in the next couple of sessions. In the medium term, a rise towards resistance near 133-134 is looking possible.
Pound (1.3019) had broken support near 1.2975 yesterday, but has again risen slightly above it currently. It has resistance near 1.315 which should cap the upside in the near term. A fall towards lower support (1.280-1.275) is still the preferred view for next week.
Aussie (0.7068) has broken below its previous low of 0.7085 and could now target support near 0.7050. If it closes today below the long term support on weekly line chart (0.710-0.705), it’s a bearish indicator for the medium term.
Dollar Rupee (73.58): While above 73.20, chances of a rise to 74.20-50 by early next week stays intact. Watch out for the US employment data release and the RBI policy decision today.
INTEREST RATES
The US employment and NFP data today would be very crucial for US yields. Another positive show might lead to yields continuing their upmove – while any dip in the data could pause the rise in yields. US yields have crossed above crucial resistances in this week. The rise in Japanese long term yields is also bullish for yields globally.
The US 10 Year (3.19%) and 30 year (3.35%) could target 3.25% and 3.40% in the near term if the employment figures come out to be strong. Otherwise, a fall back towards 3.10% and 3.25% could take place.
The 10 Year German-US spread (-2.66%) has risen a bit after testing -2.71%, but it does look bearish towards -2.80% on long term chart.
The German 10 year yield (0.53%) meanwhile is continuing to stay below resistance near 0.50-0.55%. However, given the rise in US and Japanese yields, we have to be wary of a possible break of this resistance.
The Japan 30Yr (0.95%) is breaking above long term resistance level near 0.90%-0.93%. A sustained break above this level could be very bullish for global yields. Japan 10 year yield (0.15%) has also risen above 0.14% and could now even target 0.25% in the medium term.
The Indian 10Yr GOI (8.16%) is likely to test crucial resistance near 8.25% on the upside over today-tomorrow. The rise in yields globally makes a break above 8.25% possible – in which case, the medium to long term target could be 9%.
