STOCKS
Dow (23836.71, +1.09%) has risen sharply finally trading above our target levels of 23800. Resistance is visible near current levels which if holds, may push the index back towards 23500; else a break above 23850 if seen could take it higher towards 24000, opening up further upside for the near to medium term. Note that although immediate resistance is visible on the candle charts, the 3-day line charts indicates an upside room towards 24000-24500 which would be our next target on a break above 23850/900 levels.
Dax (13059.53, +0.46%) is trading within the 13200-12900 region and this may continue for a few more sessions. The current sideways consolidation may be a temporary base building phase which could possibly lead to a sharp break above 13200 in the medium term. While above 12900, Dax remains bullish for the medium term.
Nikkei (22576.86, +0.40%) is stable as usual below 22760 and could trade in the 22760-22250 region for some time. A break on either side is necessary to have more clarity on further direction. For now Nikkei is likely to remain range-bound. Near term resistance near 112.00-111.65 if holds and pushes back Dollar Yen towards 111-110 in the medium term could possibly lead to a fall in Nikkei too. But for now that remains unclear.
Shanghai (3314.51, -0.57%) recovered a bit yesterday to close above 3320 but is again attempting lower levels today. Looking at the downside momentum, a fall towards 3300 and lower is more likely in the near term.
Nifty (10370.25, -0.28%) could be stable within 10450-10300 region for a few sessions. A corrective fall towards 10300-10200 is preferred while below 10500. Only on a break above 10500, we would focus on further upside.
Sensex (33618.59, -0.31%) however looks more bullish than Nifty just now. A break above 33750 could take it higher towards 34000 in the near term.
COMMODITIES
Gold (1295.60) has room on the upside and could rise towards 1320 in the near term while Silver (16.86) has broken below immediate support and could move down to 16.75-16.60 in the near term.
Brent (63.24) is trading at slightly lower levels today and could test 62.50-62.00 before again bouncing back. Overall long term looks bullish towards 65.
WTI (57.67) has immediate support at 57 and could possible see a bounce from there back to levels near 59-60. Failure to sustain above 57 would take it lower towards 56-55 before producing an upmove.
Copper (3.1080) could be moving lower on weak Chinese stocks but is trading at support levels just now. A rise from 3.10-3.08 is needed to take it higher again towards 3.15-3.20. Near to medium term looks bullish. Only on a break below 3.05, our lower target of 2.95 would come into picture.
FOREX
Dollar-Index (93.221) seems to have had a definitive bounce from support near 92.50-92.70 with three days of continuous rise in levels. The markets have thus shrugged off the possibility of further immediate dollar weakness and we could see the index trading between a range of 92.25 to 93.75 in the next two weeks. A more concrete view on whether Dollar will see a sustained phase of strength or weakness would depend on the index breaching resistance around 93.5 or support around 92.25-92.50 respectively in the next week or two.
Euro (1.1851) has seen a hold of the resistance at 1.19 on the weekly line charts and is now likely to move further down in the near term towards support near 1.1825 on the daily candles, a break of which could further pull it down to test support near 1.1775 on the weekly candle chart. However, it would be prudent to wait and watch if Euro goes below 1.1775 or rebounds above 1.19, before commenting on the sustainability of its weakness or strength.
Dollar-Yen (111.42) has also moved up with the weakening of dollar seeing a halt. As predicted in our briefing on Monday, this slight rebound of the Yen has created a new support for it on the daily candles at 111.25. It could well oscillate between resistance around 111.75-112.00 and support at 111.25 in the next few sessions, before a more concrete market view on dollar strength moves it above or below that range.
Pound (1.3368) contrary to our expectations has breached resistance on daily charts at around 1.335 and now seems to be poised for an upmove towards 1.34-1.3415 levels, from where there could be a slight corrective dip.
Dollar Rupee (64.4150) is likely to find support in the 64.40/30 region from where a bounce back to levels near 64.50/60 is possible. Some strength in the US Dollar could possible keep Rupee stable today with an intra-day high of 64.30.
INTEREST RATES
After moving up slightly to 0.72% the day before, the US 30-5 Yr Spread (0.69%) has dipped again a bit, but remains above the crucial channel Support which could push it up towards 0.75%, if not higher.
There has not been much movement in US Yields yesterday, but the chances of a rise remain valid while the 5Yr (2.07%), 10Yr (2.33%) and 30Yr (2.76%) remain above Supports seen near current levels.
In comparison, the German 2Yr (-0.71%) and 5Yr (0.34%) could be reasserting their overall downtrend. The German-US 10Yr Spread (-1.99%) has also started dipping a bit and may try to test -2.03% over the next week or two.
The long-term trend Resistance on the Japan 10Yr (0.03%) has held, pushing the yield lower from levels of 0.039% and 0.036% seen earlier this week. If it falls further, it could end up weakening the Yen.
As we mentioned yesterday, it will be interesting to see if the US Q3 GDP will come in near/ higher/ lower than the market expectation of 3.30% tomorrow.
As expected, the Indian 10Yr GOI (7.03%) has come off a bit from just below 7.10% and may get into a sideways range of 6.90-7.10% for some days.
