Stocks
Dow (25289.27, +0.83%) has bounced back well from levels near 24750. Trading in the middle of the broad 25750-24250 region, there is scope for moving on either side just now. On the longer term charts, the long sideways trade is still intact and a break on either side of the 27000-24500 region is important to decide upon the medium term trend.
Dax (11353.67, -0.52%) has not been able to break above 11600 and is trading lower. While 11600 holds, we may expect a fall towards 11100-11000 levels in the coming sessions. View remains bearish while below 11600.
The Nikkei (21690.91, -0.52%) is likely to face some rejection near 22000 which could push the index towards 21400 or lower in the near term. We could see some sideways range trade for a couple of sessions before a fall towards 21400 starts.
Shanghai (2666.99, -0.044%) also has important resistance at 2700, which has to break to initiate a fresh upmove. Else if 2700 holds, we could see another dip towards 2600-2500 in the coming week.
The Nifty (10616.70, +0.38%) needs to break above 10650 to head higher towards 10800-10900 in the coming week. A small dip from there could be possible thereafter. In the longer run, there is scope of rising towards 10000-11000. Watch price action near 10800-10900, on a break above 10650; else a dip from current levels back towards 10500 or lower is possible.
35500 is the level to watch in Sensex (35260.54, +0.34). A break on the upside could open up chances of a rise towards 36000. Else a dip from 35500 could push the index back towards 34500.
COMMODITIES
Support near 65 is holding for Brent (66.95) as the prices are slowly moving higher. A test of 68-69 is possible while above 65 from where another fall is possible back towards 65 or lower in the medium term.
WTI (56.99) has also moved up slightly. It could move up towards 58.0-58.50 in the near term.
Brent-Nymex WTI spread (9.97) is stuck in the narrow range of 9.21-10.35 but is trading just below resistance levels on the 3-day chart which indicates that the spread could soon come off towards 9.0 and lower in the medium term.
Gold (1215.70) is rising as expected and while the support at 1200 holds, Gold could continue to move up towards 1230. Near term looks bullish.
Copper (2.7535) is also headed towards immediate resistance at 2.80 as seen on the daily candles. A rejection from there could again push the price back to 2.65. Immediate range of trade could be seen in the 2.80-2.65 region unless a break on either side is seen. Above 2.80, another resistance is visible at 2.85, indicating a sharp upmove above 2.85 is unlikely in the medium term.
FOREX
Watch out for whether Aussie and Pound close above their 21 weeks MAs today. USDINR might just rise from 71.80 today.
Dollar Index (96.96): While below 97.5, it should be bearish towards 96.5-96.0 in the near term ie by next week. A break below 96 (if it happens) would be a bearish indicator for the medium term.
Euro (1.1337) : Chances of bullishness towards resistance near 1.138-1.140 remain intact (watch the 21 days MA @ 1.138). From there, Euro could again come off next week.
USD/JPY (113.39): As per expectation, a test of crucial support near 113 should happen by next week – a break below 113 would be an important bearish indicator, possibly establishing 114.2-114.3 as a medium term top.
Aussie (0.7271) again tested resistance near 0.73 yesterday and then dipped from there. As we have been saying in our previous briefings as well, the crucial thing to see right now is whether it closes today above the 21 weeks MA (0.7252) or not – a close above that would be bullish, leading to a rise to 0.735 next week.
Pound (1.2788): Turmoil around the Brexit plan has led to a drastic fall in Pound. It could move even lower by next week towards support near 1.27. Alternatively, if it rises in today’s session to close above the 21 weeks MA @ 1.299, the preference for next week would then be bullish.
EUR/JPY (128.48) might just continue to range between 129.5-127.25 in the next week – with a test of 129.5 possibly happening first followed by a dip towards 127.5.
Dollar Rupee (71.985) could test 71.80 today before bouncing back from there to levels above 72 again.
INTEREST RATES
US 10 Year yield (3.11%) : Support in the 3.10%-3.05% zone could be tested soon. The US 30 year yield (3.36%) could also have Support near 3.30%. We are expecting these supports to hold on first testing and then produce a bounce that lasts up to the FOMC meeting in December, possibly along with a bounce in Brent towards 70 in the near term.
German 10 year yield (0.36%) could fall more towards support near 0.30% in the near term, before rising from there again.
The German-US 10 Year yield spread (-2.75%) consequently might also fall a little more towards support near -2.78% to -2.80% in the near term. However in the weeks ahead, a rise towards medium term resistance near -2.65% to -2.60% is also looking possible. A break above this resistance level might just establish the recent low near -2.80% as a possible bottom.
