Market Morning Briefing: Dollar-Yen Saw A Low Of 106.38 Yesterday

STOCKS

Dow (25709.27,+1.58%) moved up breaking above 25500 and may eventually recover to levels near 26500 in the coming sessions. Near term looks bullish just now with a possibility of a test of previous highs near 26700.

Dax (12527.04, +0.35%) tested 12600 on the upside and if that holds, the index could fall back towards 12400 in the next few sessions. Near term could be bearish while below 12600. A break above 12600 if seen just now, could negate an immediate fall towards 12400 and instead take it higher towards 12800.

Nikkei (22460.85, +1.39%) rose in line with our expectation of a rise towards 22500. There is scope on the upside towards 23000 or aye even higher while support near 21000 holds on the weekly charts. Near to medium term looks bullish.

Shanghai (3295.65, -1.02%) came off from 3335 as expected and may come off towards 3275-3250 levels again in the coming sessions. While immediate resistance on the 3-day candles holds, near term looks bearish.

Nifty (10582.60, +0.87%) has risen from levels near 10400, the support as seen on the 3-day candles. While that holds, a near term rise towards 10800 looks likely in the medium term. Sensex (34445.75, +0.89%) also has similar support and may rise towards 35000 in the near to medium term.

COMMODITIES

WTI (63.87) and Brent (67.50) are almost stable and is likely to move up towards 65 and 68-69 respectively.

Gold (1335.40) looks poised and may rise towards 1360-1370 again in the coming sessions. Near term looks bullish.

Copper (3.2275) is likely to head towards 3.30, the medium term resistance from where another sharp rejection could be expected. Near term is bullish towards 3.30.

FOREX

Some immediate support might be provided to the Dollar Index (89.73) on the daily line chart by 13 days and 21 days moving average lines. Moreover, earlier resistance trend line on the daily line chart could also provide some support near 89.0-89.5. Our earlier projection of ranging between 88.5-90.0 for this week would be incorrect if the above mentioned supports hold.

Euro (1.2338) did see a high near 1.2355 yesterday but closed lower near 1.2317 and is currently trading around 1.233-1.234. Much like the Dollar index, the 21 days moving average line on the daily line chart could provide some resistance near 1.236 to the Euro’s upmove.

Dollar-Yen (106.93) saw a low of 106.38 yesterday, but, as mentioned yesterday, might have found some support near 106.25-106.5 on the 3 day line chart and the weekly candles. It might now test resistance near 107.25 on the daily candles again before dipping further.

The Euro-Yen (131.95), as expected, has bounced from support on daily candles near 131. If resistances for the Dollar Yen (near 107.25) and for Euro (near 1.236) hold (as mentioned above), then the Euro Yen’s upside could be restricted till 132.5-132.6.

As per expectation, Pound (1.3971) did test resistance on daily candles yesterday (at 1.407) and is now dipping towards support near 1.39, from where a bounce could be expected.

Dollar-Rupee (64.7950): Increased chances of fresh rally targeting 65.40.

INTEREST RATES

US 10 Year Yield (2.866), US 30 year Yield (3.1563), US 5 year yield (2.6082), US 2 year yield (2.2179) : Longer term US yields are consolidating around levels seen yesterday while the 2 Year yield has come further down from the 2.25-2.26 levels seen last week. The 10 Yr, 30 Yr and 5 Yr could see another upmove towards 2.9%, 3.2% and 2.65% in this week. US GDP data which would be released tomorrow could be important for how investors react. Decent GDP growth could see investors shift to stock markets, thereby leading to a rise in yields.

(Long term resistance levels for the 4 yields earlier mentioned are as follows: 2.85-2.90, 3.20, 2.7 and 2.2 respectively – we have been expecting these levels to hold in this month.)