STOCKS
Overall stocks are stable and could either remain ranged or move up in the near term
Dow (21328.47, +0.44%) rallied closer to our initial target of 21400 in line with expectations and may meet even our next target 21600 by the end of the week if the FOMC policy statement goes in its favor. Bullish momentum remains intact above 21000.
Dax (12764.98, +0.59%) has been trading in a contracting range of 12650-850 for the last 6 weeks which may continue for a few days more unless the Fed and ECB meet triggers an expansion in volatility.
Shanghai (3140.50, -0.42%) is stuck in the narrow range of 3130-65 for the last few sessions but another retest of 3130 may trigger a sharp upmove for a fresh swing high above 3165.
Nikkei (19919.09, +0.10%) is very quiet ahead of the BOJ meet coming on Friday 16th Jun, but as long as the support of 19825 and 19750 hold, it may bounce back to 20200 or even higher.
Nifty (9606.90, -0.10%) has been in a shallow corrective mode for the last 6 days but as long as it trades above the support of 9535-20, the chances of a fast upside reversal for 9700 and higher remain open.
COMMODITIES
Gold (1271) is hovering around its key resistance of 1272 and if the resistance breaks, a quick bounce towards 1310 can’t be ruled out. Otherwise it remains in a slow corrective move which may take it to the support of 1242. Silver (16.90) also moved lower in line with our expectation and trading within the range of 16.50-17.60 regions. We might see less volatility in the market ahead of today’s FOMC interest rate announcement at 11.30 p.m IST.
Copper (2.58) is trading within the narrow range of 2.56-2.67. Only above 2.67, higher resistances of 2.84 can come into consideration. We will remain bullish on copper while it is trading above 2.55 regions.
Brent (48.36) and WTI (46.02) had tested their respective supports of 47.40 and 44.20, and bounced a little, keeping the upside possibility of 50.22 (Brent) and 47.50 (WTI) open. If Brent and WTI manage to close above 50.30 and 47.50 in the next couple of sessions, another attempt for 52 and 49.55 can be seen. Market is waiting for today’s U.S Weekly crude oil inventory data. If the anticipation of -2.3 M Barrel of shortage could match the actual outcome then that would be beneficial for both Brent and WTI. Otherwise a surplus or a less than expected shortage could bring the bearish possibilities again into consideration.
FOREX
The Fed is expected to hike the rate today but the market is more curious about the future rate path or if the central bank will say anything about trimming the $4.5 trillion balance sheet.
Dollar Index (96.98) may have ended the 4-day correction from 97.31 at 96.90 today and may bounce back to 97.50 fast or even higher depending on the Fed statement. Weakness only below 96.85 but not preferred.
Euro (1.1215) has made a small triangle pattern in the last 4 days which may resolve to the downside very soon. A break below 1.1190 may trigger a fast decline towards 1.1140 and 1.1100.
Dollar-Yen (110.03) has been almost unchanged in the last couple of sessions but needs a break above 110.35 for an upside reversal. Immediate support comes at 109.80.
Pound (1.2747) has been finding support at 1.2630 levels for the last 3 sessions but a failure to recover above 1.2800 may push it down to 1.2600 once again. The larger trend still remains weak.
As discussed yesterday, Aussie (0.7536) has been stalling near the previous week’s high of 0.7567 and may rise to 0.7590-0.7610 yet but it may be the time for caution as a short term correction can be expected from anywhere in the area of 0.7570-0.7610.
Dollar-Rupee (64.34) ended the day lower after spending mostly near 64.45 levels. Despite the weak closing today, the support of 64.30-20 is expected to hold and push it back to 64.60-80.
INTEREST RATES
The US yields took a pause before FOMC outcome. The 10Yr (2.20%) could head towards 2.25% while the 30YR (2.86%) could move up to 2.90% if the FOMC outcome meet the expectation.
The Japan-US 10YR (2.15%) has bounced from immediate support and could test 2.2% regions. Overall the yield spread looks bullish for the near term.
