STOCKS
Global stocks are all stable without any sharp movement just now.
Dow (25574.73, +0.81%) has come off from immediate resistance on the daily candles but the upside may not be over yet. A test of 25200-25000 is possible before again moving up towards 25400-25600 levels in the medium term. Overall Dow is in an uptrend and is likely to continue.
Dax (13202.90, -0.59%) was almost stable yesterday. While the resistance near 13400 holds strong, the index is likely to come off towards 13000 in the near term.
Nikkei (23697.46, -0.05%) came off slightly to test 23600. Near term looks bearish with enough room on the downside towards 23200 and lower.
Shanghai (3429.21, +0.11%) is almost stable just now. Upside possibility of testing 3440 remains open for the near term.
Nifty (10651.20, +0.18%) is testing immediate support near 10600 and while that holds, it is likely to see another upmove towards 10700-10750 in the near term. Sensex (34503.49, +0.20%) has support at 34250 and while that holds, the index looks positive towards 34750.
COMMODITIES
Brent (69.30) tested 70.05 yesterday before coming off to close at slightly lower levels. While resistance at 70 holds, the price could trade sideways for some sessions and come off towards 68 before trying to attempt another rise. A break above 70, if seen and sustains could indicate further sharp upmove towards 71.00-71.50 (less preferred just now)
WTI (63.65) is trading above support at 63 and while that holds, the price could move up towards 65 in the coming sessions.
Gold (1326) has risen above the 1320-1310 region possibly initiating a fresh upmove towards 1340 or higher in the near term. Ner term looks bullish.
Silver (17.08) is holding below resistance near 17.30 and is likely to consolidate within 17.30-16.70 region for sometime. Note that 17.30 is an important long term resistance.
Copper (3.2375) is trapped above 3.20 and is trading in narrow movements within 3.20-3.30 region. An initial attempt to 3.30 is possible but on a medium term, we may expect a fall towards 3.20-3.15 levels.
FOREX
Keep an eye on the Euro-Yen (133.30). It saw a low just below 133 yesterday. Although it can bounce a bit towards 133.70-90 in the near term, there are increasing chances that it might eventually break below the crucial Support at 133. It would then target 130 in the medium term.
Such a dip in the Euro-Yen would be triggered/ accompanied by a fall in Dollar-Yen (111.44) over the coming days. These two together could try and pull the Euro (1.1960) below 1.19.
To prevent that from happening, the Euro needs to convincingly rise past 1.20 over today-tomorrow. While the potential is still there and it did, in fact, bounce from 1.19 to above 1.20 yesterday, it’s failure to sustain that bounce is a little puzzling. We need to watch this carefully over today-tomorrow.
The Chinese Yuan (USDCNY = 6.5054) strengthened a goodish bit yesterday on news that Chinese officials are recommending a halt/ reduction in the purchase of US Bonds. Let us see whether the USDCNY breaks below 6.49 today or moves back up today. A bounce/ rise is a little more probable.
As expected, the Pound (1.3507) is relatively calm amidst the volatility in other currencies and is likely to remain so for some more days.
Contrary to our expectation of a dip to 0.7750, the Aussie (0.7875) did not even fall below 0.7800 and has, in fact, risen strongly today morning. This seems to be fresh strength that could pull the Aussie up towards 0.7950-8000 this time.
As expected, Dollar-Rupee (63.60) found Resistance just above 63.80 and can dip to 63.50-45 today. Direction after that is unclear.
INTEREST RATES
Global bond markets could well be entering a bearish phase with higher crude prices raising inflation and consequently, investors’ expectations for higher yields.
The US 10Yr (2.5495%) reached highs near 2.588% with news of China’s reluctance to buy US bonds coming in. We could now expect the 10 Yr yields to consolidate near 2.55% for sometime before targeting 2.62% on the upside, seen as resistance on short term charts. US 30 Yr (2.8928%) could move up to resistance near 2.94% on the short term chart and stay below that level for few days before attempting another rise. Expectations of higher inflation being reflected in the CPI data release (due tomorrow) seems to have been already factored into the rise in yields recently. However, we still need to see if some surprises could push the yields further up.
Japanese 10 Yr Yield (0.075%) dipped from yesterday’s levels around 0.088%, where we see resistance on the short term charts. This resistance could hold for the time being.
The German 10 Yr Bund Yield (0.543%) is testing resistance on the medium term chart and could dip from here. The German-US 10 Yr Yield Spread (-2.0095%) has gone up appreciably from yesterday and might attempt a test of resistance near -1.9% on the long term chart in the coming sessions.
