Monday, April 23, 2018
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Market Morning Briefing: Euro Saw A Low Of 1.2314 Yesterday As The Dollar Index Tested 90
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STOCKS

Dow (24912.77, +2.33%) recovered sharply, the fall seen yesterday and could attempt a rise above 25500 in the near term. While weekly support near 23600 holds, a bounce in the next few sessions is possible.

Dax (12392.66, -2.32%) traded down after a gap down opening but managed to recover a bit from levels near 12200. Note that 12200-12000 is an important support region and is likely to hold for the coming sessions, limiting further fall in the index just now.

Nikkei (22270.56, +3.06%) came down to almost test the support near 21000 before bouncing back sharply towards 22500. A rise above 22750 is needed to resume the uptrend; else there could be some range-trade below 22750 or a further fall towards 21000 again. For now some recovery is expected limiting the fall to 21000.

Shanghai (3339.07, -0.94%) fell sharply reacting to the fall in other major indices globally, testing 3360 as expected. Support is visible near 3340, below current levels and while that holds, the index could head back towards 3500 and higher in the near term.

Nifty (10498.25, -1.58%) and Sensex (34195.94, -1.61%) recovered yesterday in the second half of the sessions bouncing back from immediate support levels. While 10260 holds in Nifty and 33500 on the Sensex the indices could head back towards 10750 and 35000 respectively.

COMMODITIES

Brent (67.41) and WTI (63.95) have both moved up a bit, recovering from levels seen yesterday. But near term looks bearish while below 68 and 64 respectively. Need to see if the weekly support on Brent holds or take it lower in the near term.

Gold (1329.73) fell sharply yesterday and may test the lower limit of the 1320-1350 region mentioned earlier. While below 1350, we may negate a possible test of 1360-1370 levels. Need to see whether 1320 support holds or breaks in the near term.

Copper (3.2225) has moved up as expected and could remain in the 3.25-3.17 region for 2-3 sessions followed by a break on either side of the mentioned range which would indicate directional movement for the coming sessions.

FOREX

Dollar Index (89.602) touched resistance level on the 3 day candles near 90 yesterday as had been expected. It is currently below that resistance but could well test it again in this week. The next target on the upside could be resistance near 91 on the weekly line chart.

Euro (1.2386) saw a low of 1.2314 yesterday as the Dollar Index tested 90. It could now gradually move down towards 1.2275 by early next week (there is resistance near 1.2275 on the weekly candles – this resistance level had been earlier mentioned as 1.23).

Dollar-Yen (109.39) has again risen on back of Dollar strength after touching 108.5 yesterday. It would be interesting to see if the 21-day Moving Average on the daily line charts near 110.50 again provides it resistance on this upmove.

Euro Yen (135.47) touched a low near 134 yesterday as the Euro dipped close to 1.23 against the Dollar. It might move sideways for some time now or retest 134 if the Euro comes back down towards 1.2275-1.23 in the coming sessions.

Pound (1.3963) could test support near 1.36-1.37 on the daily candles in a week’s time as it has seen 3 days of continuous downmoves.

Dollar Rupee (64.05) has Support at 64.10-00. Can move up to 64.40-50 which is a good Resistance.

INTEREST RATES

US 10 Year Yield (2.7865), US 30 year Yield (3.0592), US 5 year yield (2.5227), US 2 year yield (2.0930) have again moved up after the dramatic fall yesterday. However we might see all of them stay below 2.85, 3.15, 2.6 and 2.2 respectively as there are long term resistances near those levels. The global equity selloff in favour of safer debt is still underway and we might have to wait and watch till we are certain of a narrower range in which US yields could move for the next few days. The volatility phase might just be ending for now. The next rate hike is supposed to be in March when the volatility could again return.

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