STOCKS
Dow (25013.29, +1.21%) moved up to test 25086. A break above 25000 if seen and sustained could turn bullish for the medium term towards 25600 or even higher.
Dax (13077.72, -0.28%) was closed yesterday but overall the index looks bullish towards 13300-13400 as mentioned yesterday. Watch immediate support near 13000.
Nikkei (22997.41, -0.022%) is testing daily channel support and while that holds, near term looks bullish. Looking at the movement , it seems as if the index is being slowly pushed to the upside. There is lack of any sharp upside momentum just now but the index has been inching up for the last few sessions now. Upside of 23200-23400 is open for the near term.
Shanghai (3196.69, -0.55%) could have some chances of moving up towards 3250 or even higher in the coming sessions. While above 3150-3200, view is bullish.
Nifty (10516.70, -0.75%) is bearish for now. A fall towards 10440-10400 is possible in the coming sessions.
COMMODITIES
Brent (79.36) and Nymex WTI (72.51) are almost stable. WTI has immediate resistance near 73 which could push the price down to 71 in the near term before the crude price again starts to rise back. Brent on the other hand, seems to have some room on the upside towards 81-82 levels which could be tested before a short dip is seen. But if the WTI comes off from current levels, upside for Brent would be limited just now.
Gold (1289.90) is likely to bounce from 1280-1275 levels back towards 1310. A break below 1275 just no looks unlikely.
Silver (16.50) may rise to 16.75 in the next few sessions. Narrow trade in the 16.00-16.75 looks probable for the near term with some possible extension to 17.25.
Copper (3.0920) has risen from levels near 3.0850 seen yesterday. Copper may rise towards 3.12-3.15 in the next few sessions before again coming off. Near term could see trade within the narrow range of 3.07-3.15.
FOREX
Dollar index (93.57) made a new high of 94.06 yesterday but has dipped from there and is currently trading at levels near 93.4-93.5. There is support on daily candles near 93.25 and lower down there is the 21 days MA near 93 which, if tested, should produce a rise back towards 94-95. Repeating yesterday’s comment, there are good chances of the Dollar Index testing its upside target near 95 in this week or max by next week. We have been saying that the upside is likely to be capped till 95. The 89 weeks MA near 95.65 is a possible extension level which should produce a dip, if tested.
Euro (1.1782) has seen a slight rise and is testing resistance in the downward channel on daily line chart. It could either dip from these levels or the current upmove could extend up till 1.1825-1.1850 after which there should be a dip. As mentioned yesterday, Euro could test 1.155 by next week, if the Dollar Index tests levels near 95. The 89 weeks MA for the Euro which could produce a bounce is near 1.145.
Dollar Yen (110.9): As per expectation, Dollar Yen rose to a high of 111.40 yesterday and has now dipped from there. It could dip further to test support on daily candles near 110.50-110.75, after which it could again rise back above 111.The revised upside target in the near term are levels near 112, which corresponds with crucial long term resistance on weekly candles.
Euro Yen (130.67): There are some chances for Euro Yen to test resistance on daily and 3 day candles near 131.5 if the Euro moves up till 1.185 and the Dollar Yen stays near 111. However, given the bearish view on Euro and the upside being capped by 112 for Dollar Yen, Euro Yen should break crucial support near 129.5-129.0 in the coming weeks.
Pound (1.3417): Our forecast of ranging movement between 1.345-1.36 did not hold as the Pound broke below support on daily and 3 day candles, thereby testing a low near 1.339 yesterday. It seems to be forming a downward channel on daily candles and could see a rise towards 1.35 in the next 1-2 sessions before dipping again.
Dollar Rupee (68.125): Dollar Rupee (68.13) made a fresh high of 68.1550 yesterday. It could come down to test 68.00 or even 67.90 over today/tomorrow but overall the outlook for the medium term is bullish.
INTEREST RATES
Repeating yesterday’s comment: US yields saw an important rally last week in which the 10 Year yield finally rose past the 3% level decisively. We now expect this rally to possibly continue in the near term towards the following upside targets:
3.2%-3.3% (10 Year), 3.4%-3.5% (30 Year), 3.15% (5 Year) and 2.56% (2 Year)
US 10 Yr Yield (3.05%), 30 Yr (3.19%), 5 Yr (2.89%), 2 Yr (2.56%):
The 10 year yield, as we had predicted, has dipped towards support on short term chart. It could test 3.04% today and then see a rise back beyond 3.10% later this week / early next week.
The 5 Year yield is testing support currently and should rise towards 2.94%2.95% again in the next couple of sessions.
The 30 year yield has unexpectedly dipped below 3.20%, but this dip shouldn’t hold for long and the yield could rise again towards 3.25%. If the dip however persists, it shouldn’t extend below 3.15%.
The German 10 Year – US 10 Year yield spread (-2.53) is continuing its break of support on medium term and long term charts and looks bearish towards long term channel support near -2.70% to -2.75%.
