STOCKS
Overall major stock indices are trading higher.
Dow (25335.74, +1.77%) moved up in line with our expectation and may test immediate resistance near 25500. If that holds, a short dip back towards 25000-24500 is possible else a break above 25500, if seen could be bullish for the index towards
26000 or higher in the medium term.
Dax (12346.68, -0.07%) is almost stable below 12400. While resistance near 12400/500 holds, a fall towards 12200 or lower is possible.
Nikkei (21803.93, +1.56%) is trading just near immediate resistance levels and in case that holds, a short dip is likely in the coming sessions towards 21400-21000. Else a rise above current levels, if seen could take the index higher towards 22600 in the coming sessions.
Shanghai (3326.72, +0.59%) has resistance near 3350 on the 3-day candles and is likely to test that in the next few sessions before coming off from there. Immediate view is bullish within a bearish outlook for the medium term.
While below 10380, Nifty (10226.85, -0.15%) may come off towards 10080-10020 as we have been mentioning for quite sometime. Thereafter a bounce back towards 10320-10380 levels is possible.
Sensex (33307.14, -0.13%) is likely to test 33750 in the near term before coming off from there back towards 33000. Overall range trade is likely to continue for some time.
COMMODITIES
Brent (65.61) and WTI (62.15) have risen well. But note immediate resistances near 66.0-66.5 and 62-63 may limit further upside just now. Trade is expected within 66.50-62 and 63-60 region for the near term.
Gold (1323.60) bounced back from support near 1310 and while that holds the price is likely to trade within 1310-1340 region in the coming sessions.
Copper (3.1345) rose sharply from levels just above 3.05 and while the rise sustains, the price could move up towards 3.17-3.20 in the next couple of sessions. Near term looks bullish.
FOREX
Euro (1.2320) : Draghi’s dovish stance in the 8th March press conference and the downward revision of forecasted inflation in 2019 caused the Euro to weaken below 1.24 and it saw a low of 1.2273 on Friday. It is respecting support on weekly candles near 1.228-1.23, but there is some likelihood for it to see a further downmove towards support on daily candles near 1.225 and then bounce from there back towards 1.25-1.26.
The Dollar Index (90.023) saw a bounce from support near 89.5 on daily candles last week after the ECB chief’s dovish stance in the press conference. We were expecting the Bank of Japan’s meeting on Friday to impact the Dollar – however, the BOJ maintained status quo and the Dollar Index hasn’t seen any significant movement since then. As mentioned previously, it has immediate resistance visible on the daily candles near 90.5. If breached, there is higher resistance near 91 on 3 day and weekly line charts. In case of a dip (less preferred) from current levels, the next downside target is 89.75 on daily candles.
Dollar-Yen (106.61) as mentioned on Friday, seems to be respecting immediate resistance near 107 on the daily line charts provided by 13 days and 21 days moving average lines. The Bank of Japan meeting on Friday maintained status quo and didn’t cause any significant impact on Yen strength . Dollar Yen in this week could again move down towards 105.5, which is a crucial support and a break of which would lead to medium term bearishness.
The Euro-Yen (131.33) looks likely to move down towards support near 129.75-129.50 seen on daily and 3 day candles in this week. If the Dollar Yen and Euro indeed test supports near 105.5 and 1.225, the corresponding rate for Euro Yen would be 129.23, which would be consistent with the predicted downmove towards support on the Euro yen daily chart.
As per expectation, strong support for the Pound (1.3857) near 1.38 has held and it is now seeing an upmove towards 1.395 (seen as immediate resistance level on daily candles).
Dollar-Rupee (65.17): Dollar-Rupee remains in an overall uptrend. A rise past 65.20 can take the market up to 65.40+.
INTEREST RATES
The Bank of Japan maintained its policy stance unchanged in the Friday meeting, causing no impact to bond yields or forex rates. Infact the Japan 10 Yr yield (0.05%) had bounced from support near 0.038% on the short term chart prior to the BOJ meeting in anticipation of some hawkishness by the central bank. However, with no such development and the BOJ’s commitment to maintain the yield rate around the 0% level, it might again move down towards 0.04% in the coming weeks.
The German 10 Yr – US 10 Yr is currently at support near -2.26% on the long term chart and might bounce in this week via a slight dip in US yields.
US 10 Year Yield (2.9011), US 30 year Yield (3.1647), US 5 year yield (2.6621), US 2 year yield (2.2661) : We have been saying that a rise in US yields beyond long term resistance levels is imminent in March. However, last week, we also said that there might just be some drop in US yields in this week, after which the week of the US Fed meeting might then see volatility return, taking yields higher in anticipation of a rate hike. We might be wrong since yields have gone up by 2-3 basis points on average since Friday. We will have to wait and watch to see how the next few days pan out. (Long term resistance levels for the 4 yields have been as follows: 2.85-2.90, 3.20, 2.7 and 2.2 respectively – a decisive breach of these levels could happen in March 2nd half.)
