STOCKS
Dow (20837.44, +0.08%) could face immediate resistance on the 3-day candle charts and pause for some time. But looking at the weekly and daily charts, there could be some more room on the upside. Overall long term trend is up but we could see small dip in the coming sessions before rallying upwards.
Dax (11822.67, +0.16%) is testing daily trend support and could bounce back in the near term towards 12000-12100 levels. Near term looks bullish.
Nikkei (19235.13, +0.67%) has bounced back from support at 19000 and could now move higher towards 19400. Clear contraction is visible on the 3-day candles and while that may continue for some more sessions, we should be ready to see a sharp break out on either side. This could provide some cues for direction in Dollar-Yen for the near term.
Shanghai (3226.46, -0.07%) came down yesterday, contrary to our expectation of a rise towards 3275-3300. In case it fails to bounce back above 3250 just now, it could be indicating a sideways movement in the near term within the 3275-3225 region.
Nifty (8896.70, -0.48%) closed just above the daily channel support at 8889 and while that holds there could be some chance of seeing another 1-2sessions of movement within the 8960-8900 region. While crucial resistance near 8960 holds, near term bias is bearish. We could see a fall towards 8800 or lower in the near term while the resistance holds.
COMMODITIES
Gold (1254) was almost unchanged after last couple of days gain and may approach the pivot at 1230 of the entire range of 1210-1265.
Similar kind of chart has been formed in silver (18.31) also as it is trading within a very significant resistance around 18.35. The possibility of a decline towards 18 levels can’t be ruled out.
Absolutely no movement has been seen in Copper (2.68), trading within the range of 2.60-2.83. It is still holding its crucial support of 2.60 and a close above 2.72 could open up 2.83 as well.
Brent(55.98) and WTI(54.13) spent a quiet session in the narrow range of 55-57.60 and 53-55 with no directional bias.
Trump-speech tonight along with US Prelim GDP q/q data at 7.00 pm IST and US CB Consumer Confidence data at 8.00 pm IST may add volatility across all the commodities .
FOREX
All eyes on the Trump’s speech tonight. Major currencies remain quiet and range-bound, but could possibly see some volatility over today and tomorrow.
Dollar Index (101.16) has been quiet and could trade within the 100.85-101.85 today also. Fresh volatility may be seen after the Trump’s speech. We need to see if it breaks above 102 to move higher or come off towards 100. Equal chances of movement on either side just now.
Euro (1.0585) is holding well below 1.0650 and while that holds, movement could be ranged within 1.065-1.050 region for the next couple of sessions. But keep an eye on the German-US 2YR yield differential which if moves lower could indicate a fall in Euro below 1.05. (Refer to Interest Rates section below)
Dollar-Yen (112.56), could be trading within the 113.50-112.00 region in the next 2-sessions. Clear contraction in Nikkei could possibly keep the Dollar-Yen ranged for some more time before a sharp movement on either side is seen. We need to keep a close watch on Nikkei.
Pound (1.2418) is trading near immediate support at 1.2382 and while that holds, we could possibly see some rise towards 1.25. Near term could be range bound within 1.2335-1.2382/50.
Aussie (0.7679) is holding above the 21-day MA support near 0.76610 and while that holds, we could see some up move towards 0.7700-0.7780. Overall ranged movement expected in the near term.
Dollar-Rupee (66.70) has been trading in the 66.65/75 region for the last 2sessions and has a fair possibility of testing important support near 66.50 before bouncing back from there. Trump’s speech tonight is going to be an important event to watch.
INTEREST RATES
The German-US 2Yr (-2.14%) is headed downwards and if continues to move towards -2.15% to -2.20%, could turn very bearish for Euro and could take the currency below 1.05 in the near term. Keep a close watch on the yield differential to get better directional cue on the Euro. However, we prefer a pause in the yield spread and expect a bounce back towards -2%.
he US yields have risen a bit. But overall the medium term looks bearish. The 5Yr (1.87%), 10YR (2.36%) and the 30YR (2.98%) are trading higher than previous levels of 1.83%, 2.34% and 2.97% respectively.
The US10-5Yr yield spread (0.50%) has fallen sharply and could move lower towards 0.475% in the near term.
