GOOD MORNING! EQUITIES
The Dow (15821.51, -0.43%) saw another fall yesterday. It is now trading just at the support levels of 15800. We may see it rallying to 16100-200 if it manages to stay above the support level else a fall to 1500 or lower if it closes below 15800. Nasdaq (4033.17, -0.12%) had fallen from the resistance at 4060 levels. It has now been moving in a sideways trend for the last 3 days. We expect this sideways movement to continue for the next few days before we see a rise back up to 4100.
The Dax (9084.95, -0.61%) has fallen below the support near 9150 unable to sustain the high of 9172.16. Failure to stay above 9000 may confirm the bearishness.
Asia-Pac is mixed. Nikkei (15203.52, +0.17%) has surprised with a bullish candle but has closed on a lower level. While below 15600 it may fall further towards 15000 and even 14800. Shanghai (2239.20,-0.35%) has come off and is within the crucial 2235-45 level. It needs to ensure a break above these levels to rise further else it may be forced downwards to 2200.
Nifty (6241.10, +1.30%) had closed higher but was unable to sustain at 6300. If we see a break above 6250, we may expect a rise towards 6400. But chances of a fall from current levels is more likely.
Commodities are down overall.
Gold (1227.73) came off from the 13-day MA which seems to be a crucial resistance for now. While below 1250, the bearish pressure remains which may lead to movement within the 1212-1250 range.
Silver (19.36) has also come off from the 13-day MA. Chances of a fall towards 18.5 still persists.
Copper (3.2190) has dipped further and seems to be in a steady downward correction after the recent sharp rise. If this continues it may fall to support level near 3.15 before a fresh rise.
Brent (111.020) has dipped but is trading near support at the 13-day MA. A break could lead to a fall towards 109.6 else we could see movements in the 110-112 region.
Nymex WTI (97.35) rose further as the Crude inventories shrank further. Oil traders seem to be awaiting the NFP data today. Near term resistance coming up at 98.5. This could be a fresh rise upwards breaking the downtrend channel but that would be ensured if there is no further sharp fall from the current levels.
Euro (1.3666) has shot up to 1.3670 in line with our expectation but this is the first instance of a rise that took lesser time than the previous fall, underlining bullish strength. This is a finer change in the internal structure and if Euro manages to cross and sustain above 1.3725, this faster rally would be the reason to change our stance from bearish to bullish. In brief, it can fall any time as long as it stays below 1.3710-25 and above this zone, the bullish possibilities have to be explored.
Dollar Index (80.29) failed to go above 81.10-15 and fell from 80.82 levels to finally break the support zone of 80.35-50 on the back of a strong US Jobs data. This zone of 80.35-50 is going to be the major resistance now and as long as Dollar remains lower, it may reach 80.05-15 or even lower.
Dollar Yen (101.83) has seen some profit booking but demand is visible in the lower end too. If 101.65 remain intact, then it may consolidate in a broad sideways range of 101.60-103.60. The sign of a deeper correction to 101-101.15 would come only below 101.60.
EURJPY (139.17) found support yesterday on our support of 138.30 and extended its trading range to 138.30-140. Like the other pairs, it may make a significant move only beyond this range.
Pound (1.6333) is consolidating after a huge rally. But any real weakness will be signaled only on a move below 1.63 and 1.6230. Till then all the dips could be bought. The long term targets of 1.67-1.70 remain intact.
Aussie (0.9062) is struggling near 0.9065-75 and trying to go higher on the general Dollar weakness. All rallies will face selling pressure till 0.9170-0.92 is crossed. Further downside will open below 0.90.
Dollar Rupee (61.75) may open in the negative near 61.60-65. For these 2 sessions till Monday, the markets may dance to the tune of any kind of political news and speculations. If no buying pressure is seen in the opening hour, then we may see the support zone of 61.50-65 coming under pressure and a move towards 61.20 would be on the cards. For any sign of strength, the resistances at 61.90-62 must be crossed. Trend reversal level remains at 62.45.
The US 10Yr (2.87%) saw another rise after the GDP data came out stronger. The markets are eagerly waiting for the Non Farm Payrolls data coming out today. We see that the 10 Yr has come up to a long term resistance at the current levels. We may see the yields falling to 2.60% if the resistance holds.
The ECB and the BOE interest rate decisions came out yesterday. Both the banks refrained from lowering their prime rates. The German 10Yr (1.86%) saw a rise sharp rise after the ECB Meeting. The Japanese 10Yr (0.63%) is stable. The resistance seems to be holding for now and we may see the yields dipping to 0.58%-0.60%.
The Indian 10Yr (8.78%) has also remained stable and is expected to trade at these levels for the next few days.
10:00 GMT or 15:30 IST EU EA (17) Curr Acct Bal
...Previous 17.70 EUR Bln
13:30 GMT or 19:00 IST US NFP
...Expected 184 K ...Previous 204 K
13:30 GMT or 19:00 IST US Unemployment Rate
...Expected 7.2 % ...Previous 7.3 %
13:30 GMT or 19:00 IST US Personal Income
...Expected 0.30 % ...Previous 0.47 %
13:30 GMT or 19:00 IST US PCE Price Index M/M
...Expected 0.40 % ...Previous 0.18 %
13:30 GMT or 19:00 IST CA Labour Force
...Expected 7.60 K ...Previous 13.20 K
Australia Trade Balance
...Expected -0.38 $Bln ...Previous -0.27 $Bln ...Actual -0.53 $Bln
...Expected 0.50 % ...Previous 0.50 % ...Actual 0.50%
...Expected 0.25 % ...Previous 0.25 % ...Actual 0.25%
...Expected 3.10 % ...Previous 2.80 % ...Actual 3.60%
...Expected 60.2 ...Previous 62.8