Global stocks are all mixed. Shanghai looks bullish while Dow and Dax may take a pause for now while Nifty is potentially bearish in the near to medium term.
Nikkei is closed today on the eve of The Emperors Birthday but we could expect the support at 19258 to hold when the markets open tomorrow.
Dow (19918.88, -0.12%) is just on the verge of breaking the up-channel on the daily charts. In case the support near current levels break, we could possibly see an immediate correction for a few sessions before again resuming the rise towards 20250. Note that it has not been able to break above 20000 since the last one-week and could possibly come down towards 19800 just now.
Dax (11456.10, -0.11%) is seeing some pause near current levels. Note that the 11610 levels could act as an important resistance which could push down the prices back towards 11300-11200 levels in the near term.
Shanghai (3127.36, -0.39%) may move up towards 3175 while support at 3100 holds. Medium term looks bullish. The daily channel may continue to hold well in the near term.
Nifty (7979.10, -1.02%) broke sharply below the interim support at 8060 and is clearly headed to test the 7900 support. While the bears look strong, there are high chances that it breaks below 7900 this time. But while immediate support near 7900 is visible the index could possibly hang on near 7900 for a couple of sessions before breaking lower. For now we may negate a possible rise above 8100.
Some sign of weakness is visible in Silver (15.83) which has come down to test our expected support near 15.80. In case it breaks below 15.80, it could head towards 15.40-15.00 in the medium term.
Gold (1130.96) is almost stable around the 1130 level and has been trading near current levels for the last 6-7 sessions. Long term looks potentially weak but prices may consolidate for some more time before succumbing to the bears. We may also keep a possible rise towards 1150-1170 before a sharp fall is seen.
Brent (54.73) and WTI (52.67) are stable and is likely to remain trapped within the 57-52.50 and 50-55 region respectively for the near term. Although the longer term looks bullish, the immediate movements could remain choppy for now within the specified range.
Copper (2.50) is stable within the broad 2.45-2.75 region. No major moves expected just now.
Trade volumes may subside globally ahead of the Christmas holidays which may be expected to pick up next week or early Jan’17. Euro, Yen and Dollar Index may remain range-bound for now while Pound and Aussie looks weak against the US Dollar.
Dollar Index (103.02) may not find it so easy to break above 104.00-104.50 just now. Holding below 103.50, it is likely to consolidate in the near term in the 103.50-102.50 zone.
The Euro (1.0439) is facing sharp rejection from levels near 1.05 and is likely to remain range-bound in the 1.0500-1.0350 region for the near term.
Dollar-Yen (117.47) is trapped well within the Support and resistance levels of 116 and 118.66 respectively. It may face some difficulty to break on either side of the range just now but the 116 support looks quite strong just now and could possibly help the bulls to take the currency pair higher in the medium term. For now we could see trade in the 118.66-116.00 region for some more sessions.
The Pound (1.2277) looks bearish with the bears in full form. We could soon see a test of our initial target of 1.2150 by next week.
The Aussie (0.7209) is under the bear influence and the downtrend look strong enough to drag it down towards 0.7120-0.7100 sooner than expected. Also note that possible support may emerge from 0.7140 which if holds could limit the extent of the fall in the near term.
Dollar-Rupee (67.98) may continue to trade in the 67.70-68.10 region today also with some chances of remaining above 67.85 for most of the session. We could possibly expect some fresh volatility next week. But with the Nifty looking bearish in the longer term, Rupee could possibly witness some more weakness in the medium term.
The yields by themselves are almost stable and is likely to consolidate in the near term.
The German-US 2Yr (-2.00%) has bounced sharply from channel support and while that holds, could pull up Euro (1.0439) also a little towards 1.0500-1.0550 in the near term. But note that the resistance near -1.95% could limit the upside for the spread and for the Euro too. The German-US 10Yr (-2.30%) on the other hand has some more space on the upside and may target levels of -2.25 to -2.20% before coming off from there. But overall the long term looks bearish.
The UK-US 10YR (-1.32%) is moving in sync with the Pound and while the spread is headed towards support near -1.35%, we could expect the Pound to fall some more in the near term.
The US-JPY 10Yr (2.50%) is rallying towards 2.60% and could possibly indicate more room on the upside for Dollar-Yen. But note that the spread has enough room on the upside towards 2.70%. Could this possibly indicate bullishness for Dollar-Yen in the longer term? Possibly. Need to keep a close watch on the correlation within the spread and the currency pair.