The Dow Jones has moved from immediate trend support and appears bullish towards 35250. Dax may also rise towards 15800/80 in the short term. Nikkei and Shanghai have the option of testing 30,000 and 3575/50 before going back up from there. Indian stocks have risen well over the past few sessions and look strongly bullish over the medium term, but we can expect a pause or pullback today.
The Dow (34,751.32, -63.07, -0.18%) edged up yesterday. Trend support is seen near 34500 on daily candles and while that holds we may expect a slow and steady rise towards 35250 over the coming week. Any breakout below 34500 if observed (less likely) can be strongly bearish.
The DAX (15651.75, +35.75, + 0.23%) has also increased and has the ability to test 15800-15850 in the short term. The range of 15850-15400 may continue to hold.
The Nikkei (30485.11, +161.77, + 0.53%) rose today, but unless a rise above 30750 is seen, there is a possibility of a dip towards 30,000 to short term. The immediate range of 30000-30750 can hold for now. Only if it breaks below 30,000 will it open up the chances of a possible fall to 29,000 or less. Until then we can expect the mentioned range to hold.
Shanghai (3606.31, -1.36, -0.038%) has fallen sharply over the past 1-2 sessions. A test of immediate support near 3575-3550 is possible before a strong rally to 3625-3650 or more is seen in the medium term.
Nifty (17629.50, +110.05, + 0.63%) tested 17645 yesterday which could serve as intermediate resistance on very short term charts. While the longer term view is to see a possible rise to 17800/850, we can expect a break in the uptrend today for a small correction or stability. Any fall from here could extend to 17400 on the downside before resuming the uptrend.
Sensex (59141.16, +417.96, + 0.71%) tested our 59000 expected yesterday to close higher. While the medium term view is bullish for a test of 60,000, we may need to allow a pause or a short correction from current levels before the upside resumes. Look at the price action today near current levels.
The strength of the US dollar is pushing metal prices down, which may continue for a few more sessions before a recovery is seen. Gold, silver and copper all fell. Gold may test 1725-1700 while silver may drop to 22 in the short term. Copper has a chance to test 4.20 before bouncing from there to 4.40.
Brent (75.46) is holding trade above $ 75 and while this holds a further rise towards the resistances of 77-78-80 can be tested which may cause a steep decline towards 70 to mid term. WTI (72.20) is also trading above 72 and may soon be rejected by the 73-75 region. Watch the price action to see a short term rejection of the respective resistance areas.
Gold (1758.30) has fallen below the 1780/65 mentioned yesterday and may move towards 1725-1700 in the short term. The view is bearish below 1765/60.
Silver (22.89) also fell below 23.50 and could test 22 in the near term before rebounding from there.
Copper (4.3030) also fell and could test the lower end of the 4.20-4.40 range before rebounding from there.
Dollar Index rose sharply after higher retail sales data yesterday. The index may point to 93.0-93.25 from where a rejection is possible. The euro has fallen sharply and could test 1.1750-1.1700 before attempting to rise but overall 1.16-1.19 could continue to hold for weeks to come. EURJPY tested 128.60 before rebounding. A range of 128-130.50 may hold for the time being. The Aussie and the Pound also look bearish in the short term. The USDCNY has risen well and may drop 6.47 / 48 in the short term. USDINR tested 73.3450 yesterday but may climb back to 73.80 today, supported by weakness in the Euro and Chinese Yuan.
The Dollar Index (92.911) has risen sharply and may continue to rise towards immediate resistance near 93-93.25 from where a decline can be expected.
The euro (1.1764) fell exactly as mentioned in yesterday’s edition. The exchange tested 1.1750 before rebounding slightly from there. We need to see if it holds above 1.1750 to rebound to 1.18 and higher, otherwise it may drop to 1.1725-1.1700 in the near term, strengthening the downtrend. Below 1.1750 the chances of a fall to 1.1650 would open.
EURJPY (129.27) fell in line with our expectation to test 128.607 before rebounding strongly from there. We need to see if 128.50-128 holds in the short term to trigger a rebound to 130-130.50 in the medium term. Above 128 the immediate view is bullish. A wide range of 130.50-128 could continue to hold.
The dollar-yen (109.85) has risen well but continues to hold in the 109-110.50 range. Within the range, the exchange may increase towards the higher end.
The Aussie (0.7286) has moved below 0.73 and looks bearish to 0.7250-0.72 near term before any attempt to rebound from there. Immediate view is bearish while below 0.73.
The Pound (1.3789) is holding in the 1.3750-1.39 range and may continue to trade within the range trying to get closer to 1.39 from current levels.
The USDCNY (6.4572) has risen sharply from levels near 6.43, but may be rejected in the short term from 6.47 / 48 and drop further to 6.40 soon. Look at the price action near 6.47 / 48 in the short term.
The USDINR (73.52) tested 73.3450 yesterday but rebounded strongly. A rise to 73.80 seems possible today as the Euro and Chinese Yuan have weakened against the Dollar.
US Treasury yields rebounded well after yesterday’s release of US retail sales data. Retail sales in the United States rose 0.8% (MoM) in August after falling 2.17% in July. As the rate rebound continues, a further hike to test key resistances cannot be ruled out before the US Federal Reserve meeting next week. German yields are hovering near their crucial resistances and will need to be watched closely for a reversal from here and mark the end of the corrective rally. The 5-year and 10-year GoIs remain bearish and continue to decline. However, lateral consolidation is possible before a further decline is observed.
The yields on 2-year (0.22%), 5-year (0.84%), 10-year (1.34%) and 30-year (1.88%) U.S. Treasuries have rebounded over the years. deadlines. The 10Yr went above 1.3% and brought down the odds of testing 1.4%. Can the increase extend to 1.45% -1.5% than we expected earlier? We will have to wait and see. The 30Yr, on the other hand, needs to break above 1.9% to gain bullish momentum and reach 2% and above.
German 2-year (-0.71), 5-year (-0.62%), 10-year (-0.30%) and 30-year (0.19%) yields remain higher and stable. The 10 year is just entering its resistance zone -0.30% / – 0.25% and the 30 year is just below the key level of 0.20%. We expect yields to reverse and resume the broader bearish trend. Price action in the coming days will require close monitoring.
The Indian 10-year GoI (6.1682%) remains lower and keeps intact the bearish outlook of seeing 6.12% to 6.1% while it is below 6.2%. The medium-term view is also bearish, dropping from 6.05% to 6%.
The 5-year GoI (5.6025%) manages to stay above 5.6%. Above 5.6%, a range of 5.6% to 5.64% is possible in the short term. However, although below 5.64%, the wider bias is bearish to break 5.6% and fall to 5.55% -5.5% eventually in the next few days.