The Chinese market is at a major inflection point but all the other markets are trendless at the moment, waiting for the Yellen speech tomorrow.
Dow (18481.48, -0.35%) tested the lower end of the 13 day old range of 18450-700 but overall unchanged. The range may see a breakout by tomorrow.
Dax (10622.97, +0.28%) continues trading inside the range of 10450-650 with no strong indication of breakout before the Yellen speech on Friday. Bias neutral.
Nikkei (16554.98, -0.25%) is seeing another narrow range day in the band of 16350-650. The bias remains slightly bullish but must be confirmed with a rise above 16650.
Shanghai (3062.66, -0.75%) is at the make or break point now as it tests the most significant support of 3060-50. A swift bounce from this area would keep the bullish scenario intact but a break below 3050 would threaten the whole picture. Wait and watch.
Yet another day of consolidation for Nifty (8650.30, +0.21%) in the contracting range of 8550-8700. Repeat - unless a break above 8700 is seen very soon, the chances of a break below 8550 may rise, triggering downside targets of 8400 or even lower.
Despite Dollar Index (94.67) staying almost unchanged over the last session, almost all the commodities have weakened, especially precious and industrial metals.
Gold (1325.89) has broken down from the contracting range of 1330-60 and failure to recover above 1335 soon can push it lower to 1310-00 in the next few sessions.
Silver (18.5870) declined towards the major support of 18.55-45 as expected and now the price action here will determine the near term picture. If a bounce doesn’t materialize from this support, then the decline can extend to 18.00 levels but we have to wait and watch here.
Both Brent (49.04) and WTI (46.78) are still trading above their respective major supports of 48.00 and 46.00, keeping the upside chances open. The correction is shallow till now, indicating inherent strength, which will be confirmed on a break above 50.20 for Brent and 48.40 for WTI.
Copper (2.088) has broken below the channel support around 2.10. Unless an immediate recovery above 2.10-11 is seen, the decline may extend to 2.05 or even lower.
Dollar Index (94.723) would be the main driver for the currency markets in the near term. The 94.20-95.00 region consolidation has to break in order to give a clearer picture direction. The bounce expected from support levels is somewhat weak and is unable to push the index above 95 just now. In case the index is unable to move up, it could well test 93.00-92.50 on the downside.
Euro (1.1268) has been in a short term channel uptrend and while that holds, we could see a dip to 1.1250 followed by a rise towards 1.1350-1.14 in the near term.
Dollar-Yen (100.468) seems to be trading sideways and may possibly continue for a few more sessions. The region of trade for the near term could be 101.50-99.53.
Pound (1.3223) is trading above 1.3178 but could come off in the near term. Interim resistance is visible near 1.33-1.34 on the 3-day candle chart. We could soon see a fall to 1.30 while the resistance holds.
Aussie (0.7628) could test 0.7550 on the downside before again rising back towards 0.77.
Dollar-Rupee (67.1175) is trapped above 67.00 just now. We could possibly see a ranged move in the 67.00-67.25 region over today and tomorrow. While 67.00 holds, the upside possibility remains open for the near term.
The Japanese yields are trying to move up and has some room on the upside. The 5Yr (-0.17%), 10YR (-0.08%) and 30YR (0.33%) are trading slightly higher than -0.18%, -0.0081% and 0.314% respectively.
The UK yields are in an overall downtrend and the yields may continue to fall in the near term. The 5YR (0.21%), 10YR (0.56%) and 20YR (1.14%) are down from 0.22%, 0.57% and 1.19% respectively.
The UK 10-5Yr (0.35%) differential has resumed its fall after seeing a pause in the 0.35-0.37% region. While it moves lower it could target 0.30%-0.20% and even lower in the medium term.
The German-US 2Yr (-1.40%) has come down to test Support just below current levels and could bounce back from there towards -1.35%. This could indicate a current dip in Euro over today and tomorrow followed by a sharp rise.
The 10YR GOI (7.13360%) continues to trade above 7.10%. It dipped slightly yesterday from levels near 7.16%. But overall there is potential for a rise towards 7.20% in the long term.
8:00 13:30 GER IFO Business Climate
...Expected 108.5 ...Previous 108.3
8:00 13:30 GER IFO Business Situations
...Expected 114.9 ...Previous 114.7
8:00 13:30 GER IFO Business Expectations
...Expected 102.5 ...Previous 102.2
12:30 18:00 US Durable Goods Orders
...Expected 3.50 % ...Previous -3.94 %
US Existing Home Sales
...Expected 5550 K ...Previous 5570 K ...Actual 5390 K