STOCKS
Dow (21784.78, -0.10%) closed just above support levels on the 3-day candle chart. A rise from here is necessary to keep the immediate uptrend intact; else a fall towards 21600 or lower is possible in the next couple of weeks.
Dax (12296.63, +0.67%) has moved up sharply to close at higher levels after the ECB meeting yesterday. A rise in the coming sessions is possible towards 12400-12500.
Nikkei (19337.04, -0.31%) looks weak. While the Dollar Yen is headed to lower levels, Nikkei could remain weak too and target levels near 19200-19200 in the near term.
Shanghai (3368.90, +0.10%) looks bullish while above 3350. It could possibly consolidate sideways for some more sessions before resuming the uptrend.
Nifty (9929.90, +0.14%) is expected to remain bullish while above 9750 as we have been mentioning for quite some time now. The index could possibly spend some time within 9750-10000 levels before deciding on further direction. The index is likely to remain stable today.
COMMODITIES
Gold (1356) moved higher and met our target of 1350 as Dollar index in trading below 91.50 levels. Immediate trading range for Gold is now 1335-1371 with an interim support at 1345. Gold is highly overbought thus we might see weekend profit booking at current levels . Similarly Silver (18.23) has also moved higher but still within the range of 16.90-18.25. Please maintain caution at higher levels due to overbought nature. In the medium term,both Gold and Silver are out of their short term bearish channel but the supports of 1288 and 16.80-90 should hold to keep the bullish momentum intact.
Copper (3.15) is trading within the narrow range of 3.12-3.17. Only above 3.17 , higher levels of 3.26 can come into consideration. The only concern in the short term overbought condition which might cause short term profit booking at current levels.
Brent (54.60) is trading within the bullish channel of 50-55.60 since June 17 and we will remain bullish while it is trading above 50 regions on a weekly closing basis. WTI (49.22) has also moved higher but still within the bearish channel of 45-50 since march 17. Technically there are no sign of weakness so for but we need to be little cautious as a price correction for a 4.6MB surplus in U.S. weekly crude inventory is overdue.
FOREX
ECB kept rates unchanged yesterday. The next meeting in October would be important as it is now a ‘confirmed date’ when the ECB will seriously debate when to start its ‘taper’ from. Euro (1.2055) shot up to 1.20 soon after the ECB yesterday and is trading above 1.20. While the longer term target of 1.2150-1.2250 remains on the cards for the medium term, we could expect Euro to end the week on a stronger note. The ECB has raised its GDP growth forecasts but slightly powered its inflation forecast.
Dollar Index (91.347) has come down below our initial target of 92. Important support is visible near 90.70-91.00 region and while that holds a bounce back towards 92-93 is possible in the next couple of weeks. For now a test of 90.70 is possible on the downside.
Dollar-Yen (108.125) is trading near crucial support zone of 108.00-108.13, responding to the Euro strength and while that holds, we could see a bounce back from current levels (last seen in April). In case we see a weekly close at levels below 108, the direction could tilt on the downside for the near term.
Euro-Yen (130.53) is holding above immediate support levels just above 129 and seems to be potentially bullish for the coming sessions. There is a fair scope of a rise towards 131-132 in the near term.
The Pound (1.3128) has been rising strongly since the last 2-weeks and could target 1.3270, the high seen on 3rd August’17. Near term looks bullish.
Sharp rise in Aussie (0.8098) is seen this week. A rise towards 0.82 is possible while support at 0.7950 holds.
Dollar-Rupee (64.04) is expected to trade within 64.15-63.95 today. The strength in Euro may lead to some Rupee strength today.
INTEREST RATES
The benchmark US 10Yr yield (2.04%) has dipped again. It could possibly touch 1.97 regions but that will be a highly oversold territory , thus we are not expecting further downside beyond 1.97 regions.
EUR/USD moved higher as the The German-US 2 Yr Spread (-2.05%) and the German-US 10Yr Spread (1.76%) has been rebound. Otherwise there were no such stimulus for Eur in the yesterday’s ECB meet.
Japan 10Yr yield (0.02%) moved higher while the 30Yr (0.82%) and the 5Yr (-0.14%) are almost stable at the time of this writing. No directional clarity so far but definitively yields are consolidating at these levels.
The UK 5Yr and 30Yr Gilt Yields (5Yr 0.43% and 20Yr 1.57%) had moved lower towards their respective supports. The UK 10Yr (1.03%) looks stable, might retest its immediate resistance of 1.07-08% region.
