STOCKS
Dow (25380.74, +1.06%) has continued to rise towards 25500. Support near 24000 is holding well for now as seen on the 3-day and weekly candles. While the rise sustains, a test of 25750 or even 26000 looks possible.
Dax (11468.54, +0.18%) is rising well from support near 11000 and could target resistance at 11800 on the upside. From there another dip towards 11400 or lower is possible.
Nikkei (21915.40, +1.05%) is rising and trading higher today. A break above 22000 would be crucial and could lead to a medium term rise towards 22400-22500. On the weekly, the earlier support turned resistance is seen near 22500 which if holds could produce a decent rejection.
Shanghai (2637.85, +1.21%) is gradually moving up towards daily resistance near 2700-2750 and could come off from there back to 2600. A break above 2750 would be crucial to negate further bearishness in Shanghai index.
Nifty (10380.45, -0.059%) broke above the 10400 level that we have been mentioning but came off to close at lower levels. While above 10400, upside could be capped anywhere in the 10600-10700-10800 region from where another decline is possible. But if 10400 holds, Nifty could immediately come down towards 10100 by next week.
COMMODITIES
Sharp fall in the US Dollar Index has helped the metals like Gold, Silver and Copper to rise back with a sharp bounce from support levels.
Brent (72.50) and WTI (63.31) have come off sharply. Brent-WTI spread (9.07) has come off from resistance on the weekly chart and is likely to fall further towards 8-6 indicating bearish crude prices.
Brent has come off to test the 21-Week MA near 72 on the weekly candles. If this holds, a bounce from here back towards 74 is possible; else a break below 72 if seen would take the price to lower support at 70.50. Only on a break below 70.50, can we look at deeper decline opening up scope for a fall towards 68-65 in the longer run. For now, we prefer 72 or 70.50 to hold. Downward channel is intact for the near term.
WTI (65.11) looks bearish towards 60 on the 3-day line charts from where a bounce is possible. Near term looks weak for the next few sessions. .
Gold-WTI ratio (19.45) has moved up sharply above resistance at 18.5 and if the rise continues, we could see a test of 21-22 soon on the upside. Near term looks bullish while above 18.50.
Gold (1234.10) rose back sharply from levels above 1210 to re-test 1240 on the upside. While above 1210, a fall to 1200 is negated. The bulls seem to have come back with force and if that sustains, it could eventually break above 1240 to move higher towards 1250/60 soon. Watch for price action near immediate resistance at 1240.
Silver (14.68) rose sharply from 14.25 instead of testing 14 or 13.50 mentioned yesterday. It could move higher towards 15.0-15.5 in the near term.
Copper (2.7115) has bounced sharply from support near 2.65 as expected. While the rise sustains, price could gain move up towards 2.80 in the near term. Thereafter, it would be important to see whether the price would move above 2.80 or comes off again towards 2.65.
FOREX
Watch crucial resistances at 1.144 on Euro, 0.720-0.727 on Aussie and 1.305-1.310 on Pound. Also watch crucial support at 6.905 on Dollar Yuan. USDINR could dip more towards 73.30.
Euro (1.1396): As per expectation, Euro moved up towards 1.14 yesterday and infact, saw a high near 1.1424. It could now move even higher towards 1.143-1.144 by Mon-Tue next week to test resistance on daily candles.
Dollar Index (96.37) could see a further dip towards support (earlier resistance) at 96 on daily line chart, before possibly moving back up from there.
Dollar Yen (112.74) could dip to support near 112.40 in the next 1-2 sessions. If this support breaks, then it could become bearish towards lower support near 111.50. However, while it stays above 112.40, a rise back towards 113-114 still looks possible.
Euro-Yen (128.49) is trading just below crucial channel resistance near 128.75 on daily candles. With Euro possibly rising to 1.145 and Dollar Yen dipping to 112.40 in the next 1-2 sessions, Euro Yen could continue staying below this resistance.
Pound (1.2988): As we had expected, the rise towards 1.29-1.30 has taken place, but it has happened much quicker than we had expected. There is crucial resistance for the Pound now near 1.305-1.310. In fact, if it closes the week above 1.3052 (21 weeks MA), it could increase chances of further bullishness beyond 1.31.
Aussie (0.7198) has moved up quickly to test resistance on daily candles (which is now just below 0.72). On weekly candles, 0.72 is seen as a crucial horizontal resistance. Higher up, on weekly line chart, the 21 weeks MA at 0.727 could also provide decent resistance. Hence, while below 0.727, the downside would still be open for Aussie in the coming weeks.
Dollar Yuan (6.9279) has broken below support near 6.955 and could now move lower towards support near 6.905. If 6.905 also breaks, then there could be further bearishness for USDCNY.
Dollar Rupee (73.455) – Dollar rupee may test 73.30/25 on a break below 73.40 tomorrow. A bounce from 73.25 back towards 73.40/50 could follow. While below 73.50, the chances of a rise back towards 74.50 have reduced.
INTEREST RATES
As per expectation, the US 10 Year (3.14%) seems to be respecting channel resistance near 3.16% and has dipped from there. It could move even lower towards 3.10% in the next week.
The US 30-5 Year Yield Differential (0.41%) looks headed higher towards resistance near 0.50%. The US 10 – 5 Year (0.17%) is at crucial horizontal resistance and could come off from here.
Good chances of a dip in Japanese 10 Year (0.12%) and 30 year yield (0.87%) towards 0.10% and 0.80% respectively. The 30-10 year spread also looks bearish towards support near 0.70%.
