Kshitij Consultancy Services
Morning Briefing Daily forecasts on global Stocks, Commodity, Forex and Interest Rates markets
22 Feb 17. 0902 IST or 0332 GMT or 2232 EST
GOOD MORNING!
STOCKS

The stocks have risen sharply and look bullish for the near term.

Dow (20743.00, +0.58%) has risen sharply and looking at the current momentum, a pause near 20800 looks less likely. A break above 20800 may help the index to extend the current rally towards 21000 in the coming sessions.

Dax (11967.49, +1.18%) has finally moved up after being stuck in the 11677-11930 zone for quite some time. While the rally continues we may see a test of 12100 in the near term.

Nikkei (19344.25, -0.19%) is not able to break above 19600 just now and continues to trade in the broad 19600-19000 region. Resistance near 19600-19620 levels could hold for some more time.

Shanghai (3249.73, -0.11%) looks bullish on the weekly charts and could eventually move up towards 3300-3400 in the longer run. A pause near 3300 is possible before moving higher towards 3400. Trend is up for the medium term.

Nifty (8907.85, +0.32%) has seen sharp rally since the beginning of the year and could test crucial resistance just below 9000 levels over the next couple of sessions. Thereafter a sharp fall towards 8700 could be expected in the medium term. We need to keep a close watch on the price action near 8950-8980 region.

COMMODITIES

Gold (1238) is trading within its sideways channel between 1217-47 with no directional bias. Gold-WTI ratio is also falling and currently at 22.58.

Silver (18.01) is also trading within its previous range of 17.60-18.35 with an immediate resistance at 18.03.

Brent (56.90) and WTI (54.06) both are trading within their respective ranges of 54-59 and 50-56. A close above 57.20(Brent) and 54.40(WTI) could open up higher levels.

Copper (2.74) is hovering around its pivot of 2.76 of its recent trading range of 2.60-83.It is still holding its upward trend line support at 2.68 since October 16. A close above 2.76 could open up its resistance of 2.83.

FOREX

The markets are waiting for the minutes of the last Fed meeting to be released tonight, possibly giving the investors a peek into Trump policies through the eyes of the governors.

Dollar Index (101.28) has corrected from 101.60, close to the upper end of the near term range 100.40-101.70 and now may move according to the Fed minutes coming out tonight. If it fails to rise above 101.70-90 tonight, then the chances of spending the rest of the week in the range of 100.40-101.70 may increase.

Euro (1.0548) retested the previous week low near 1.0520 and took a pause. The upside looks limited to 1.0580-90 in the near term with the lower targets of 1.0500-1.0450 still in play. EURGBP (0.8437) may decline to the major support near 0.83 soon to complete a bearish Head & Shoulders pattern and a break below 0.83 may trigger much deeper downside.

Pound (1.25007) is trying to resolve the range of 1.2375-1.2525 to the upside but it still requires a firm break above 1.2525 to rise further towards 1.2700.

Dollar-Yen (113.40) is consolidating its recent gains made in the last 2 days but may rise to 114.80-115.00 in the coming sessions.

Aussie (0.7692) is stuck in the very narrow range of 0.7650-0.7700 for the last 3 sessions but a break above 0.7700 may take it to a fresh high near the major resistance of 0.7750-0.7800 where it may create a top. On the other hand, a break below 0.7650 right now may open up lower targets of 0.7500. Wait and watch.

Dollar Rupee (66.92) tested the immediate support of 66.90 below which the major support band of 66.70-50 come into play while 67.15-20 can be tested again if 66.90 holds. It remains to be seen in the opening hour today if 66.90 holds or breaks. Bias neutral at this point.

INTEREST RATES

Overall the yields are stable but could face resistances above current levels which could hold in the medium term.

The German-US 2Yr (-2.09%) has fallen further from levels near -2.07% seen yesterday. We could possibly see a bounce from levels near -2.11% indicating that the fall in Euro could be limited just now. Overall the spread has been showing close relation with the Euro and could be a good indicator for near term movements in the Euro. (Refer to FOREX section above)

The US yields are almost stable and could possibly come off in the near term.

The Japanese yields are have started falling slightly and could see some more fall in the near term.

DATA TODAY

9:00 14:30 GER IFO Business Climate
...Expected 109.7 ...Previous 109.8

9:00 14:30 GER IFO Business Situations
...Expected 116.7 ...Previous 116.9

9:00 14:30 GER IFO Business Expectations
...Expected 103.0 ...Previous 103.2

10:00 15:30 EU CPI (YoY)
...Previous 1.13 %

14:00 19:30 US Existing Home Sales
...Expected 5550 K ...Previous 5490 K

DATA YESTERDAY:-
---------------
EU PMI
...Expected 55.0 ...Previous 55.2 ...Actual 55.5




DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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