STOCKS
Dow (26828.39, +0.20%) has moved up and is likely to test 27000 this week before seeing a short corrective dip from there. Support is seen near 26500 which if holds in the medium term could push the prices to levels above 27000. Medium term looks bullish.
Dax (12287.58, -0.42%) could trade in the 12200-12500 region in the near term. 12500 is a strong resistance just now but could eventually break on the upside in the medium term. In the weekly charts, a rise towards 12600-12800 in the longer run looks likely.
Nikkei (24043.48, -0.28%) has been coming off in the last 2-sessions. While below 24400, we could see a test of 23600 on the downside. Thereafter a rise back towards 24400+ is possible in the longer run.
Nifty (10858.25, -1.36%) could spend some time ranged above 10800 gradually attempting to rise towards 11200. Unless a break below 10800 is seen, we may expect support at 10800 to hold in the medium term.
COMMODITIES
Precious metals and Copper looks stable in the near term while the rally in Crude prices continue.
Commercial crude stored in US rose by 8mln barrels in the week ended 28th Sep according to government data. Saudi Arabia has increased oil output to head towards record high as per a news source. While the worries of cut in OPEC countries oil exports remain, Crude prices could continue to move up this month before the actual Iran sanctions date comes closer.
Brent (86.10) and WTI (76.23) are trading above the immediate resistance levels mentioned yesterday. While the crude prices head higher, a test of $90 and $80 is on the cards for the near term.
Gold (1200.60) and Copper (2.8225) are trading in a sideways range of 1190-1220 and 2.75-2.85 respectively and is likely to remain stable during the rest of the week. No major movement is expected in the near term unless a break on either side of the range is seen.
FOREX
A rise towards 90 on Brent could further weaken the Rupee towards 74.45 and then towards 75.27. US NFP data tomorrow could trigger further global Dollar strength.
Dollar Index (96.087) : In line with our expectation, Dollar Index broke above immediate resistance near 95.75 and now looks set to test long term resistance near 96.5 in the next couple of sessions. Watch out for US employment data tomorrow – it could trigger a break above 96.5.
Euro (1.1469) : As expected, Euro seems well on its way to test long term support near 1.14 in the next couple of sessions. It is likely to target the 200 weeks MA near 1.132 in the next couple of weeks.
Dollar Yen (114.35) should test its Nov ’17 high of 115 by next week. It could go even higher above that to test channel resistance on daily line chart near 115.5-116.0and then come off from there.
Euro-Yen (131.135) : While Dollar Yen rises towards 115 and Euro falls towards 114, Euro Yen might stay above support near 131 on daily candles. Infact, from 3 day and weekly line chart, it looks bullish towards 133-134 in the next few weeks.
Pound (1.2930) : Support near 1.2975 has broken. A fall towards lower support (1.280-1.275) now looks likely by next week.
Aussie (0.7093) is testing long term support near 0.71 on weekly line chart. If it breaks below its previous low of 0.7085, it could become bearish towards 0.70 in the coming week.
Dollar Rupee (yesterday’s closing: 73.345; current offshore NDF: 73.84): May test 74.45. After that, 75.27 comes into picture. Keep a watch on Brent as it comes close to the long-term target/ Resistance of 90.
INTEREST RATES
Strong US economic growth and progress on trade deals between US-Canada-Mexico have taken US yields above crucial resistances, opening up chances of further bullishness in yields.
The US 10 Year (3.18%) and 30 year (3.34%) yields have broken above crucial resistances. They could now target 3.25% and 3.40% rather quickly in the near term.
The 10 Year German-US spread (-2.71%) has broken below the interim support near -2.65% and now looks further bearish towards -2.80% on long term chart.
The German 10 year yield (0.47%) meanwhile could remain capped below resistance near 0.50-0.55% in the next few weeks.
The Japan 30Yr (0.94%) is breaking above long term resistance level near 0.90%-0.93%. A sustained break above this level could be very bullish for global yields. Japan 10 year yield (0.15%) has also risen above 0.14% and could now even target 0.25% in the medium term.
The Indian 10Yr GOI (8.1120%) is likely to test crucial resistance near 8.25% on the upside over today-tomorrow. The rise in yields globally makes a break above 8.25% possible – in which case, the medium to long term target could be 9%.
