STOCKS
Dow and Dax are almost stable and could consolidate for some more sessions. Nikkei and Shanghai could come down in the near term while Nifty looks bullish.
Dow (20837.37, -0.21%) could remain stable near current levels for another 1-2 sessions before moving up above 21000. Crucial resistance is seen near 21200.
Dax (11988.79, -0.01%) has been stable for the last few sessions and is stuck in the 12090-11930 region. Resistance is visible near 12200 levels and if that holds, there could be a fall towards 11900-11800 in the near term. Sideways consolidation may continue for the rest of the sessions this week.
Nikkei (19551.72, -0.29%) came off from immediate resistance near 19620 as expected. Narrow range of 19620-19400 and a broader range of 19620-19200 can be expected in the near term. Clear contraction in price action is visible just now.
Shanghai (3233.50, -0.16%) is holding well below the 3250 resistance and while that holds, we could expect trade within the 3175-3250 region in the coming sessions.
Nifty (9087, +1.71%) opened with a gap up but was ranged within the 9122-9060 region yesterday. Note that although the target of 9280 remains open on the upside, there is a decent resistance near 9130. A sharp break above 9130 could confirm higher levels of 9280 in the near term.
COMMODITIES
Gold (1200) is trading within the range of 1180-1220. Until it will manage to close above 1220, it will be difficult for gold to move higher. We will remain bearish while it is trading below 1240.The downward channel in Gold-WTI ratio(24.5) since Aug 16, has been broken and the same could move towards 26-27 levels. We have US Fed Funds rate announcement at 11.30 pm IST, which may add some more clarity through Dollar Index (101.30).
Silver (16.92) is trading slightly higher from its immediate support at 16.65-72 levels. The bias will remain bearish while it is trading below 17.45-50 levels.
Copper (2.64) was unable to close above its pivot at 2.72 of its recent trading range of 2.55-83. We have US CPI and Retail sales data at 6:00 p.m IST, which could influence the price of copper and silver.
Brent (51.60) and WTI (48.43) both are trading within their narrow ranges of 50-52 and 46-50 with a bearish bias. We have US crude oil inventory data at 8.00 pm IST. Only a surplus beyond expectation (3.3M) in US weekly crude oil inventory could affect the price negatively and open up further lower levels for both Brent (47.50) and WTI (45) respectively. Otherwise we may see short term bounce back towards the upper band of the recent ranges.
FOREX
The FOMC decision will be out today and a rate hike looks certain but the markets are more interested about the interest path the Fed indicates.
Dollar Index (101.69) is well on its way towards 102.00-30 as expected, unless the Fed produces any negative surprise tonight. Major support unchanged at 101.00.
Euro (1.0614) is weak and has already tested 1.06 levels in line with expectations. The lower targets of 1.0550-00 may be achieved by the end of the week.
Dollar-Yen (114.81) is stuck in the narrow range of 114.50-115.50 for the 5th consecutive session with a bullish bias. A breakout in the US-Japan 10Yr above 2.55% may help Dollar Yen to rise to 116.00 and 117.50 but till then, more sideways action looks likely.
Pound (1.2158) continues to struggle at the lower levels and the price action may be contained in the range of 1.20-1.23 for the next 5-10 days. Repeat – it remains to be seen if any bottoming price action may take place around the current levels or not.
Aussie (0.7569) keeps trading in the range of 0.75-0.76 with the trend neutral at this point. As discussed yesterday, only a firm break from this range can give directional clue in the near term.
Dollar-Rupee (65.81) has broken below 66.00 in the near term but as it nears oversold condition with the FOMC coming tonight, both these combined may help the pair find near term support today close to 65.70-50, may be even a bounce of 20-30 paisa can be seen. Immediate resistance comes at 66.25-35.
INTEREST RATES
The US yields are testing resistance near current levels and while that holds, we could possibly see some fall in the near term. The 5Yr (2.13%), 10Yr (2.60%) and the 30Yr (3.17%) are slightly down from previous levels of 2.14%, 2.62% and 3.20% respectively.
The German yields have started to come off and looks bearish in the near term. The yield differentials are also headed downwards and could fall in the coming sessions.
The UK 5Yr yield has risen faster than the longer term yields and have paused near current levels for now. There is some more potential on the upside for the near term.
