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Market Morning Briefing: Dollar-Index While Above 96

STOCKS

Equities continue to remain bullish. The global indices can move further higher in the next few days. However, key resistances are coming up which increases the possibility of a corrective fall in equities going forward.

Dow Jones (26,091.95, +60.14, +0.23%) can move higher to 26,250-26,300 while it remains above 26,000

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DAX (11,505.39, +47.69, +0.42%) has risen above the crucial 200-week moving average level of 11,467 and a trend resistance level of 11,500. The outlook is bullish, and DAX can rise to 11,700 and 11,750 in the coming days. Supports are at 11,490 and 11,467.

Nikkei (21,485.29, +42.94, +0.20%) has come-off after testing the 100-day moving average resistance (21,602). A break below 21,500 can see a dip to 21,350 and 21,300 in the near term. However, an eventual break above 21,602 will then open doors for a test of 22,000.

Shanghai (2,972.58, +11.3, +0.38%) retains its momentum and has room for further rise in the near term. Key resistances at 3014 (50% Fibonacci retracement level) and 3053 (100-week moving average) can be tested in the coming sessions. A corrective fall thereafter to 2900-2850 or even lower levels cannot be ruled out.

The Indian benchmark indices, the Sensex (36,213.38, +341.90, +0.95%) and Nifty 50 (10,880.10, 88.45, 0.82%) have surged in line with expectation yesterday. The outlook is bullish. Nifty 50 has support in between 10,815 and 10,800. It can move further higher to 10,980-11,000 in the coming days. Sensex has series of supports between 36,100 and 36,000 and can test 36,450-36,500 in the near term. A strong break above 36,500 will pave way for the next target of 36,850.

COMMODITIES

Gold and Silver remains stable and can remain range bound. Copper can dip in the near term before resuming its uptrend. Oil has come under pressure after Trump raised concerns through his tweet about high oil price and also asking the OPEC to relax. However, Oil has key supports near current levels which will need a watch to get cues on the next direction of move.

Gold (1327) is stable between 1320 and 1335 and can remain range bound between 1320 and 1340 for some time. A break below 1320 can take gold lower to 1310 and 1300.

Silver (15.88) is stuck in between 15.8 and 16 and looks mixed. A breakout on either side of 15.8 or 16 will decide the next move. A break below 15.8 can test 15.6 while a breach of 16 can take the price higher to 16.2.

The rally in copper (2.94) has paused. The prices can dip to 2.92 or 2.90 before we see a fresh rally to 3 and higher levels.

WTI (55.5) and Brent (65) fell as expected but at a much faster pace than expected. However, crucial supports are near current levels which will need a watch. Brent has cluster of supports between 65 and 64. A bounce in the coming sessions can take it back higher to 67. But a break below 64 can test 63 initially and even 61 and 60 thereafter. WTI has little room left to dip and test its key support between 54.5-54.35. A bounce from there can see a revisit of 56 and 57 levels.

FOREX

Major currencies test immediate resistances just above current levels from where a fall in the near term looks possible.

Dollar-Index (96.37) while above 96, could have some scope of rising back towards 97-98 in the near term. A test of 96 could be seen initially within the next few sessions.

Euro (1.1359) has not been able to move above 1.1370 since the past 5-sessions. A break above 1.1370 could see a test of 1.14 just now before the currency comes off from there back towards 1.13 and lower.

Euro-Yen (125.85) has immediate resistance at 126 and while that holds, a fall back to 124.50 is possible in the coming sessions. Break above 126, if seen could be bullish towards 126.80-127.00; this if happens would pull up Euro too above 1.14.

Dollar Yen (110.77) has immediate resistance at 111 on the daily chart and higher at 112 on the weekly candles. While 111 holds, a dip to 109.50 is possible before a further rise towards 112 is seen.

Pound (1.3141) too has immediate resistance at 1.31 and higher at 1.32 from where a fall back towards 1.28 is likely.

Aussie (0.7164) is trading within 0.70-0.7250 region, both being medium term support and resistance levels. Some sideways movement is possible in the near term before we a see a rise towards 0.74-0.76 in the longer run For now interim support and resistance at 0.71 and 0.72 respectively could hold.

USDCNY (6.6894) has risen slightly rising back to 6.69. Failure to rise above 6.9 could take it down towards 6.65/63 in the near term. Else a rise above 6.69 could bring it back towards 6.70/72 levels just now.

Dollar Rupee (70.9850) came down to trade around 71. While there is scope of testing support at 70.85/80 on the downside, we could see an immediate bounce back from there towards 71.10/20 in the near term. There is news of destroying terror camps at LOC by IAF jets and this could probably add on to pull up Dollar Rupee on the onshore markets today possibly with a gap up opening.

INTEREST RATES

The US yields are trading low and could fall some more in the near term. The 2Yr (2.49%), 5Yr (2.46%), 10Yr (2.65%) and 30Yr (3.01%) are down from yesterday’s levels of 2.51%, 2.49%, 2.67% and 3.03% respectively. Support is visible on the near term charts at 2.44% (5YR), 2.63% (10Yr) and 2.95% (30YR). Some more fall in the next few sessions is possible.

The US-JGB 10Yr (2.68%) could trade sideways for some time before rising towards 2.74-2.78%. Longer term looks bullish.

The 10Yr GOI (7.5839%) could rise towards 7.60/65% while above 7.50%. In the near term, the yield could remain in the 7.50-7.65% region before rising higher in the longer run.

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