STOCKS
Dow (24786.63, +0.87%) continued to rise as per our expectation mentioned yesterday. While above 24500, there is scope for the index to rise towards 25000-25200 in the coming sessions.
Dax (12585.57, +1.57%) has broken above the 12500 resistance following the movement in Dow. While above 12500, the price looks bullish towards 12800.
Nikkei (22130.25, +1.29%) has moved up too along with strength in the other major indices. A rise towards 22500-23000 is on the cards for the near term.
Shanghai (3054.98, -0.39%) is amongst the first indices mentioned in this section to have sharply broken below the medium term support trendline and may indicate upcoming weakness in the overall index for the coming sessions. A fall towards 3000-2900 is possible in the near to medium term. View is bearish.
Nifty (10548.70, +0.19%) and Sensex (34395.06, +0.26%) closed at higher levels yesterday and may continue to move higher in the near term. Sensex is likely to move towards 34500-34600 levels while Nifty closed just near the important resistance at 10550. If the Nifty manages to move higher, it could head towards 10650-10700 levels; else a fall back from current levels would be seen (less likely)
COMMODITIES
Brent (71.93) and Nymex WTI (66.86) could spend some time consolidation below the crucial resistances of 74 and 68 respectively.WTI could re-test 68 while is likely to remain stable just now.
Gold (1346.70) is almost stable just now. 1340 is a short term support on the 3-day chart and while that holds, Gold could test 1370/80 in the next few sessions.
Copper (3.0840) is likely to trade in the 3.05-3.15 region in the next few sessions. Interim resistance is visible near 3.15 while 3 provides long term support.
FOREX
Dollar index (89.51) saw a low of 89.23 yesterday, thereby testing support on daily candles near 89.25. The 13 days and 21 days moving average lines on daily line chart near 89.8 could provide immediate resistance. Higher resistance on 3 day candles near 90.0-90.5 could also be a decent resistance level, producing a dip.
Euro (1.2377): Euro saw a high of 1.2414 yesterday, thereby almost testing the immediate resistance near 1.2400-1.2420 on daily line chart. However it dropped from those levels to close near 1.237 and continues to hover around that level. It could possibly find some support from 21 moving averages on daily and 3 day line chart near 1.233-1.235, which is also seen as immediate support level on 3 day candles.
Dollar Yen (107.25) saw a low near 106.88 yesterday, thereby breaking below immediate support trendline on daily candles but closed above 107 and is currently back to levels near 107.2-107.3. However, it could dip from here again back below 107 and turn bearish in the near term. If that happens, it could target levels near 106.5 soon (close to support on weekly candles).
Euro Yen (132.74) as we predicted is respecting resistance near 133, being provided by 21 moving average on the weekly line charts. The range for this week is likely to be between 133-132 as the Dollar Yen could again drop below 107, while the Euro could dip towards 1.235.
Pound (1.43) is likely to see some resistance near 1.43-1.435 (seen as interim resistance on 3 day line chart and horizontal resistance on daily and 3 day candles). As we have mentioned earlier, this is a crucial level, whose break could imply bullishness towards 1.45-46 in the medium term (seen as resistance on weekly line chart).
Dollar Rupee (65.6475): Trend clearly on the upside. Downside limited to 65.50-30. A rise past 65.70-80 targets 66.15+
INTEREST RATES
Positivity towards the US economy continues to grow as the Industrial Production and Capacity Utilization figures came out higher than expected yesterday. Earlier, US Retail Sales data, unemployment claims data and the Fed minutes had all indicated a growing US economy. Consequently, shorter term yields have risen to record highs, with investors plausibly moving towards more risky assets.
US 10 Yr Yield (2.834%), 30 Yr (3.018%), 5 Yr (2.69%), 2 Yr (2.398%):
The US 2 year yield touched 2.4% yesterday and could rise higher towards 2.45% in the days to come.
The US 10-5 Yr Yield Spread (0.14%) has broken below strong channel support on short term chart near 0.15%. Let’s see if this break sustains.
The 10 Year yield continues to stay near resistance on short term charts and could dip lower to 2.8% in the coming sessions. If risk appetite amongst investors increases, we could see the 10 year break above 2.83-2.85. However, that is less preferred.
The 30 yr yield as per expectation has dipped and could rise from these levels.
