STOCKS
Dow (24189.45, -0.90%) is trading below 24500 as expected and continues to remain ranged for now with support at 23500. No major movement expected at least in the next couple of sessions. Dax (12293.97, -0.83%) came down to test 12300 and closed lower yesterday. While resistance at 12500 holds, Dax could come off towards 12100-12000 levels.
Nikkei (21670.84, -0.07%) is finding difficulty in moving above 21800 just now and instead turned down yesterday. It would be important to see if 21800 holds in the coming sessions to push the index down towards 21400-21200 or the price again tries to attempt a test of 21800 or higher.
Shanghai (3200.12, -0.25%) came down from levels above 3200 and is stable just now around 3200. A test of 3250 on the upside looks likely in the coming sessions.
Nifty (10417.15, +0.14%) fell sharply from levels just below 10450. This could hold for the next few sessions bringing in some dip in the index towards 10300. Sensex (33940.44, +0.18%) could also come off towards 33500 in the next few sessions. Near term is likely to see a fall in the Indian stock prices.
COMMODITIES
Crude prices has been surging in the past 2-sessions due to the US-Syria worries and it further boosted Crude prices as news of missile strikes on Saudi Arabia came in.
Brent (72.39) and Nymex WTI (67.23) surged sharply on news of strike on Saudi Arabia. WTI has immediate resistance near 68 while brent could face some rejection near 73. A short dip to 71-70 could be seen thereafter as an interim support.
Gold (1353.60) tested 1370 on the upside before closing near 1350. A break above 1360 if seen and sustained again could trigger some upmove in the medium term.
Copper (3.1005) has dipped a bit but could eventually move higher in the near term.
FOREX
Dollar index (89.535) saw a low of 89.36 yesterday but has largely been trading around 89.5. It is expected to move lower towards support on daily candles and weekly line chart near 89.25 by tomorrow / early next week. As per expectation, the US CPI data release yesterday reflected moderation in inflation and hence didn’t affect Dollar strength positively.
Euro (1.2369) saw a high of 1.2396 yesterday and is likely to target immediate resistance on daily line chart near 1.2425-1.245 by tomorrow / early next week. We have been saying that: A decisive breach above 1.25-1.26 would imply medium term bullishness for the Euro. While it stays below 1.25-1.26, it could continue its ranging between 1.215-1.255 of the past 2 months.
Dollar Yen (106.89), as per our expectation, has again dipped below 107 and could test support on daily candles near 106.5-106.6 in the next couple of sessions. A break of this support, if it happens, could boost our preference for a medium term bearish view for Dollar Yen.
Euro Yen (132.20) might find some immediate resistance provided by the 21 moving average line on the 3 day line chart. Slightly higher up, there is the 21 week moving average near 133 on the weekly line chart which could also provide resistance. If the Dollar Yen tests 106.5 (as forecasted above) and Euro stays below 1.245, the resistance near 132-133 for the Euro Yen could hold well.
Pound (1.4184) continues to trade just below 1.42 (seen as resistance on daily and 3 day candles). Repeating yesterday’s comment: If 1.42 is breached; there could be some interim resistance near 1.43 on 3 day candles. In the medium term, a breach of 1.430-1.435 could imply bullishness towards 1.46 (seen as resistance on weekly line chart).
Dollar Rupee (65.315) – We need to see if the RBI will sell Dollars in the morning today. If not, and in case Dollar-Rupee rises past 65.35, it will move up to 65.55-60. If the RBI sells Dollars today, it can come down again towards 65.00.
INTEREST RATES
US long term yields continue their movement in a downward channel since the Fed rate hike last month. The US CPI data release yesterday reflected moderation in inflation as expected and consequently, long term yields have come down further in their respective channels.
US 10 Yr Yield (2.78%), 30 Yr (2.99%), 5 Yr (2.615%), 2 Yr (2.307%) :
The 10 Year yield has dipped lower to 2.78% and could move even lower towards 2.75%-2.72% which is close to support in the downward channel on short term chart.
The 30 yr is testing crucial support on short term chart and medium term chart near 3%. A break of this support isn’t preferred currently.
