STOCKS
Dow (24748.07,-0.16%) is in a pause mode just now. It could test 25000-25500 in the medium term while it holds above the 24500 support. Overall medium term looks bullish for Dow.
Dax (12590.83, +0.042%) is looking bullish too. If the index sustains a rise above 12600, it could target 12800 in the next few sessions.
Nikkei (22309.15, +0.68%) has been moving up for the last few sessions now is likely to move further towards 23000. This could pull up Dollar Yen in the coming sessions and may keep the rate above 107.00.
Shanghai (3115.42, +0.78%) has paused near 3100 levels and if the index does not bounce back immediately, it could fall towards 3000 and could open up chances of a further fall towards 2900-2800.
Nifty (10526.20, -0.21%) tested crucial near term resistance near 10600 and while that holds, a decent correction from current levels is possible towards 10450. Sensex (34331.68, -0.18%) also tests similar resistance near 34600 and could come off towards 34000 in the near term. Overall the Indian equity indices could face some corrective dip in the coming sessions.
COMMODITIES
Brent (73.77) and Nymex WTI (68.72) have risen sharply and look bullish towards 75-76 and 70 respectively. Thereafter a short corrective dip is possible in the medium term.
Gold (1351.90) is trying hard to move up towards 1370 levels but faces tough rejection near those levels. A break above 1370 is needed for Gold to start rising sharply or to trigger a move towards 1400 in the medium term. Crucial level to watch would be 1370.
Copper (3.1570) rose sharply yesterday to close above 3.15 which is now the interim support for the coming sessions. While above 3.15, Copper looks bullish towards 3.20 or even higher.
FOREX
Dollar index (89.69) has risen after testing support on daily candles near 89.25 day before yesterday. As mentioned yesterday as well, the 13 days and 21 days moving average lines on daily line chart near 89.8 could provide immediate resistance. If it breaches 89.8, higher resistance on 3 day candles near 90.00-90.25 could then provide decent resistance, producing a dip.
Euro (1.2375): Euro tested resistance near 1.2400-1.2420 on daily line chart day before yesterday. It has been ranging between 1.239-1.234 since then. As mentioned yesterday, there could possibly be some support from 21 moving averages on daily and 3 day line chart near 1.233-1.235, which is also seen as support level on 3 day candles.
After breaking below 107 day before yesterday, Dollar Yen (107.40), contrary to our expectation, has again risen to see a high near 107.5. However it is still below earlier support trendline on daily candles and could soon take a bearish turn towards 106.5 (close to support on weekly candles).
Euro Yen (132.97) continues to respect resistance near 133, being provided by 21 moving average on the weekly line chart and also seen as horizontal resistance on daily candles. As mentioned yesterday, the range for this week is likely to be between 133-132 as the Dollar Yen might not rise much beyond current level, and the Euro could remain ranged between 1.239-1.233. As per our April ’18 Yen report (available on demand), Euro Yen could possibly turn bearish in the medium term.
Pound (1.419) has dipped after testing strong resistance near 1.43-1.435 (seen as interim resistance on 3 day line chart and horizontal resistance on daily and 3 day candles). It could now dip towards immediate support near 1.415-1.410 on daily line chart before rising again.
Dollar Rupee (65.665): Dips to 65.50-40 may be bought for a target of 66.15 by end-April/ early May.
INTEREST RATES
US Yields continue to rise as positivity towards the US economy grows. We mentioned yesterday that the last 2 weeks has seen crucial US economic indicators throw up improved numbers, which is plausibly causing investors to move away from bonds towards more risky assets. Industrial Production, Capacity Utilization, US Retail Sales data, unemployment claims data and the Fed minutes had all indicated a growing US economy.
US 10 Yr Yield (2.8635%), 30 Yr (3.048%), 5 Yr (2.724%), 2 Yr (2.4231%):
The US 2 year yield after touching 2.4% has risen higher as we expected and could move up further towards 2.45% in the days to come.
The US 10-5 Yr Yield Spread (0.14%) had yesterday broken below strong channel support on short term chart near 0.15%. This could be a false break and the spread could possibly rise back into the channel from here. Let’s wait and watch.
Yesterday, we predicted that the 10 Year yield could possibly rise higher towards 2.85% if risk appetite amongst investors increases. The same has happened. The upside in the near term could be restricted till 2.89-2.90.
The 30 yr yield as we expected, has risen back towards 3.05%. It could possibly rise more towards 3.1% before dipping.
