STOCKS
Going into the holiday mood from next week, equities may remain quiet without much movement. Some range-trade looks likely near current levels.
Dow (24782.29, +0.23%) is trading below 25000 and could remain sideways today, with narrow movement in the 25000-24600 region. As mentioned yesterday there could be scope on the downside towards 24400 before the index starts to rise towards 25200.
Dax (13109.74, +0.31%) has bounced a bit from support at 13000. In case that holds in the medium term, we could see a rise back to levels near 13400.
Nikkei (22860.18, -0.03%) is trading within the channel up trend within 23200-22400 region as visible on the daily charts. Narrow trade is likely to continue in the near term. Unless a break on either side is seen, it is difficult to predict any sharp movement just now.
Shanghai (3302.25, +0.09%) is trading sideways and is likely to continue its trade within 3320-3260 region in the early next week too.
Nifty (10440.30, -0.04%) and Sensex (33756.28, -0.06%) are almost stable near current levels and could attempt a short term fall in the next few sessions. Near term looks weak.
COMMODITIES
Gold (1265.90) tested 1270 yesterday and may not breach 1280 in the near term. Rather a rejection from current levels is possible taking the price back towards 1260 or slightly lower.
Brent (64.720) and WTI (58.15) are stable just now. Brent could move up towards 65-68 levels while a breach of 59 resistance on WTI could initiate some bullishness for the longer term.
Copper (3.1960) is stable near current levels. A test of earlier high of 3.25 is possible from where a short dip could be seen.
FOREX
We have been seeing little movement in the Dollar-Index (93.408) for the past 2 days. It saw a high of 93.5 achieved yesterday, while today it reached 93.56; however it has been trading around 93.3-93.4 for the greater part of the day. It is likely to decline towards 93 and then towards 92.5 (support on weekly line chart) by early next month.
Euro (1.1848) had seen a high of 1.19 day before yesterday and has been trading in the 1.185-1.19 range after that. It did reach a low of 1.1817 today but has currently been pulled back up to near 1.185. It is likely that after seeing minimal movement during the holiday season, it will again test resistance near 1.19 and in case of a breach of the same, attempt to move towards 1.25, seen as medium term resistance on weekly line charts.
Dollar-Yen (113.31) tested resistance (113.5) on daily candles and daily line charts yesterday, reaching a high of 113.64, but dipped to close at 113.32, where it is currently trading. US-Japan yield spread is increasing (2.423 currently) and till the time it rises towards 2.45, we could see Dollar-Yen stay ranged between 113 to 113.5. However, with a dip in the yield spread and with likely weakness in the Dollar next month, we could see Dollar Yen move down towards support near 112.3-112.5 on daily candles.
Pound (1.3380) saw a low of 1.3332 yesterday, testing support near 1.334-1.335, but has mostly been trading around 1.337-1.338. We can expect rangewise movement between 1.335 – 1.345 to continue next week as well.
Aussie (0.7716) after having tested support on weekly line charts around 0.75 in the first 10 days of the month, is now gaining strength and is slowly approaching 0.7792 (near the current 21 day moving average). With expected Dollar weakness, we could see Aussie attempt 0.78-0.79 next month post which there could be some sideways oscillation before resuming a possible upmove towards 0.80.
Rupee (64.0575) looks likely to move between 64 and 64.20 till there is no decisive movement in the Euro past 1.19 or below 1.17. A rise in the Nifty towards 10550-10600 is also likely to play a major role in taking Rupee below 64.
INTEREST RATES
Immediate resistances on the US yields seem to be holding well. The yields have come off a bit and could continue its downward correction in the coming sessions. The 10YR (2.49%) is down from 2.50% as expected while the 30YR (2.84%), came off from 2.88% instead of moving higher towards 3%. The 10YR could move down to 2.45% while the 30YR may come off to test 2.80%.
The US-Japan 10YR yield spread (2.43%) is up by 1bps and could head higher towards previous highs of 2.53% seen in Mar’17.
The German-Us 10Yr (-2.07%) could face resistance just above current levels and come off towards -2.10% or lower in the coming week.
