STOCKS
Dow, DAX and Nikkei have bounced. While the DAX and Nikkei can remain range bound, Dow has a crucial resistance ahead which needs to be breached to bring back the bullishness and avoid a fresh fall. Shanghai is closer to a crucial resistance which if broken can turn the short-term outlook positive. Similarly, Sensex and Nifty also have key resistances ahead which has to be broken in order to move further higher and avoid a fall.
Dow (27649.78, +146.97, +0.53%) has bounced but has to surpass the key resistance level of 27920 in order to bring back the bullishness. While below 27920, the Dow can fall back to 27500-27300 again.
DAX (13140.57, +151.28, +1.16%) has risen above 13100 again. While it sustains above 13000 the DAX can remain range bound between 13000 and 13300 again which can then negate or reduce the chances of seeing a fall to 12800-12700 mentioned yesterday.
Nikkei (23278.97, +143.74, +0.62%) is sustaining above 23000. A sideways consolidation between 23000 and 23600 looks likely while the index manages to stay above 23000.
Shanghai (2897.83, +19.71, +0.68%) is coming closer to the crucial level of 2900. As mentioned yesterday, a strong rise past 2900 is needed to turn the outlook positive and negate the chances of seeing 2800 on the downside. We will have to wait and see.
Nifty (12043.20, 49, 0.41%) has to rise past 12100 decisively to bring back the chances of seeing 12200-12300 into the picture. While below 12100, the index is vulnerable to see a fall to 11800.
Similarly, Sensex (40850.29, +174.84, +0.43%) need to breach 41000 decisively to gain strength and rise to 41250 and 41400. While below 41000, a fall to 40250 and 40000 cannot be ruled out in the coming days.
COMMODITIES
Commodity prices are all mixed today. Crude trades higher after inventory stock data came lower than expectations while Gold and Silver have dipped. Copper has bounced back from support levels and may hold in the near term.
Brent (62.94) and WTI (58.21) have moved up after the EIA report stated a crude oil inventory draw of 4.9mln barrels for week ended 29th Nov. This was contrary to the analyst expectation of a decline of 1.798mln barrels. We may Brent and Nymex WTI rise towards 65 and 61 respectively in the near term. View is bullish for the next 2-3 sessions.
Gold (1481.20) tested 1490 yesterday before falling from there. As mentioned yesterday we may expect 1495-1500 to hold as immediate resistance on gold which could push back prices down towards 1480-1460 again in the near term.
Silver (16.96) has fallen below 17. While the price trades below 17, there is chance of it to fall further towards 16.50 in the next few sessions.
Copper (2.6555) tested support near 2.62 before bouncing higher from there. A sustained break below 2.62 would initiate a sharp fall towards 2.60 in the medium term. But while the price trades above 2.62, we may expect another rise towards 2.70 in the next couple of sessions.
FOREX
Dollar Index (97.57) continues to fall towards immediate support at 97.50 which is likely to hold and push the index higher. Only a break below 97.50, if seen we would look for a test of lower support near 97.10. Either 97.50 or 97.10, Dollar Index is near to the crucial support levels and any fall from here is expected to be short lived.
Euro (1.1083) tested 1.1116 yesterday before coming off from there. On the daily line chart, there is hardly any room on the upside just now and the Euro could be expected to fall sharply towards 1.10 or lower in the medium term. View is bearish for the coming sessions.
Dollar-Yen (108.83) is holding well above immediate support near 108.5. We may expect some sideways trade in the 108.50-109 region just now
EUR-JPY (120.68) has moved up and while it trades above 119.50, there could be chances of it moving up higher towards 121 or higher in the near term. The pair can be considered for medium term bullishness only on a sustained break above 121. Watch price action near 121 in the near term.
Pound (1.3117) has risen sharply pushing itself to levels above 1.31 on expectations coming in from forecasts that the ruling Conservatives will win in the elections. Opinion polls suggested the UK would avoid a hung parliament after next week’s election. The poll suggested a 10point lead for the Conservative party and a parliament majority. While the rise above 1.30 sustains, Pound could target 1.32 and 1.34 in the medium term.
Aussie (0.6842) is almost stable near current levels as 0.6875 is holding well as near term resistance. The last 3-candles show lower highs with each progressing session. Another candle tomorrow with a lower high if seen would indicate that the bulls could be losing steam indicating a possible fall in the near term. This would be in line with the resistance at 0.6875 holding just now. Charts suggest bearishness while below 0.6875.
USDCNY (7.0545) has come off slightly instead of moving higher towards 7.10 resistance. Interim resistance near 7.08 has held well and we may see trade in the 7.08-7.04 region in the near term.
Dollar-Rupee (71.5350) came down to close just above 71.50. It is at crucial levels now and a bounce from here or break below 71.50 would indicate the direction for the next few sessions. For now we may expect 71.50-71.88 region to remain intact. Only on a break below 71.50 we may look for a test of 71.25 on the downside. Watch price action near 71.50.
INTEREST RATES
The US Treasury yields continue to trade lower as the US-China trade deal uncertainty continues to weigh on the market. The yields have room to dip further. The German Yields broadly remain bullish. The 10Yr GoI is mixed and is stuck in a narrow range. The outcome of the Reserve Bank of India’s monetary policy today might be a possible trigger to break this range and set a trend going forward.
The US 2Yr (1.57%), 5Yr (1.59%), 10Yr (1.77%) and 30Yr (2.22%) Treasury yields continue to trade lower. . The near-term view remains negative. The 10Yr has an immediate support at 1.74% a break below which can drag it to 1.65%. The 30Yr has supports at 2.18% and 2.16% which will need a close watch. A strong break below 2.16% will be bearish for a fall to 2.05% and even 2% in the coming weeks.
The German 2Yr (-0.64%), 5Yr (-0.57%) and 10Yr (-0.32%) yields have dipped while the 30Yr (0.20%) has inched higher. The broader picture continues to remain positive. The 30Yr can gain momentum on a strong rise past 0.22% which will then pave way for a fresh rally to 0.35%. The 10Yr is bullish to test -0.1% on the upside while it sustains above the support at -0.40%.
The 10Yr GoI (6.4665%) has been stuck in a narrow range between 6.45% and 6.50%. A strong rise past 6.50% is needed to move higher towards 6.60%. On the other hand a break below 6.45% will take the yield lower to 6.40% first and then a bounce is possible.
