GOOD MORNING!
FOREX
The Dollar Index has risen well above its support at 106 and while it holds, the overall view is bullish towards 109 or higher. The immediate upside in Euro looks capped at 1.0650-1.0700. The Aussie and Pound have limited upside in the near term. USDCNY is holding well below the resistance at 7.25/26 from where a rejection can be expected. The Dollar Yen is back within its 152-155 region but overall, the view is bullish towards 157-158 in the near term. EURJPY has the scope to extend its rise further in the coming sessions while above 162. EURINR tested 89.54 before coming down but the fall is expected to be limited to 88. For USDINR, we need to see whether the rise extends towards 84.50 from the current levels or falls back below 84.40 again. NDF quotes 84.38 indicating a dip from Tuesday’s close of 84.4150/4250 on the onshore market. US Philifed and Existing Home Sales data releases are scheduled today.
Dollar Index (106.571) seems to be holding well above the support near 106 as a bounce back towards 107 was seen yesterday. Overall, the view remains bullish towards 109 or higher while it trades above 106. Only a strong break below 106 can make the outlook bearish again.
EURUSD (1.0545) continues to hover above the support of 1.05. The upside looks to be capped at 1.0650-1.0700 and a fall to 1.04 cannot be fully ruled out until a sharp rise past mentioned levels is seen.
Dollar-Yen (154.91) rose past 155 to the high of 155.89 as expected before cooling down a bit . Currently, it is back within the 152-155 region but while above 153/54, we are retaining our view of seeing a rise past 155. Targets on the upside could be 157-158.
EURJPY (163.43) tested 164.76 on the upside in line with our view of seeing a rise towards 165, before coming down. Immediate support is seen around 162 which if sustained, can lead to a rise towards 165 or even higher in the coming sessions.
USDCNY (7.2409) has crucial resistance at 7.25, a break past which can take it towards 7.27 or higher in the near term. Else, while the resistance holds, the pair can witness a corrective fall in the near term towards 7.20/18. Watch price action around 7.25/26.
Aussie (0.6515) observed a high of 0.6446 before declining a bit from there. On the upside, a strong rise past 0.66 will be needed to make the outlook further bullish. Else it can again fall back towards 0.65-0.64. Overall, the downside could be limited to 0.64.
Pound (1.2657) failed to sustain its rise and started coming off from the high of 1.2714 itself. Immediate resistance is seen near 1.2850 but whether it will be tested or not will have to be seen. Bearishness will only strike in on a confirmed break below 1.26.
USDINR (84.42) was closed yesterday due to Assembly Elections in Maharashtra. We need to see whether the rise seen on Tuesday extends towards 84.50 from the current levels or falls back below 84.40 again. Overall, the upside could be capped at 84.50 for now. On the NDF, the rate currently quotes 84.38 indicating a possible dip on the onshore markets today.
EURINR (89.0383) tested our initial target of 89.54 on the upside but could not sustain and started to fall. The downside could be limited to 88 for now.
INTEREST RATES
The US Treasury yields are poised at their support. A fall from here can drag them lower. That will keep intact our view of seeing a reversal. A strong rise breaking above their near-term resistance is needed to negate the expected fall. The German yields have dipped. But supports can limit the downside. Outlook is bullish to see a rise going forward. The 10Yr GoI is coming down within the range. Intermediate support is available. While that holds, it can rise back towards the upper end of the range.
The US 10Yr (4.40%) and 30Yr (4.59%) yields are poised at their supports. A fall from here can take them down to 4.2%-4% (10Yr) and 4.4% (30Yr). A sustained break above 4.5% (10Yr) and 4.7% (30Yr) will be bullish to see more rise. We will have to wait and watch.
The German 10Yr (2.35%) and the 30Yr (2.55%) yields have dipped slightly. While above the support at 2.3% (10Yr) and 2.5% (30Yr), the outlook is bullish to see 2.6% (10Yr) and 2.8% (30Yr) on the upside.
The 10Yr GoI (6.8458%) dipped within the 6.8%-6.88% range. Intermediate support is at 6.8250%. While that holds, a rise back to 6.87%-6.88% is possible. We retain the bullish bias to see a break above 6.88% and a rise to 6.9% and 7% eventually.
STOCKS
Dow Jones has seen a relief rally but watch to see if the rise can cap immediate upside to 44000. Below 44000, bias is to see a decline towards 42000/41000 soon. Dax could rise while above 18800. However, a rise past 19600 is needed to induce bullish momentum for a rise towards 20000. Nifty came off sharply from 23781 on Tuesday, in line with our expectation of immediate upside to be capped at 28000. While below 23800 view is bearish towards 23000. Nikkei is heading towards 37750-39000 zone as expected but we need to see if the support region holds to produce a bounce. Else, Nikkei could be vulnerable to a sharp decline on a break below 37750. Shanghai could range within 3400-3250 for now. A sustained rise past 3400 is needed for the index to pick up bullish momentum again in the near term.
The Dow (43408.47, +0.32%) is getting a relief bounce. More rise is possible, but 44000 can cap the upside. While below 44000, the bias is negative to see a fall to 42000-41000 with intermediate bounces going forward.
DAX (19004.78, -0.29%) is getting bought near 18800 which keeps the bullish bias alive. However, a strong rise above 19600 is needed to strengthen the momentum and clear the way to 20000 and higher. A break below 18800 will be bearish to see 18500-18000.
Nifty (23518.50) has come off sharply from the high of 23781. While below 23800, a fall to 23000 is possible. After this fall there are good chances to see a reversal. Price action around 23000 will need a close watch.
Nikkei (38033.22, -0.83%) has declined and fallen towards our mentioned target of 38000-37750 which could limit the immediate downside and lead to a bounce back towards 38500+ levels in the near term. Watch price action carefully near 38000-37750 zone because failure to hold above this region can make Nikkei vulnerable to a sharp decline in the coming weeks.
Shanghai (3365.08, -0.086%) has managed to rise back above 3300 in the past 2 sessions and could remain ranged within 3400-3250 region for a while. Further bullishness can come in on a sustained rise past 3400. Watch price action in the next few sessions.
COMMODITIES
Crude prices face rejection near their respective resistance levels and can fall towards 71 (Brent) and 67 (WTI) in the near term. Gold and Silver need to surpass their immediate resistance to see higher levels of 2700-2750 and 32.0-32.5 respectively else can fall towards 2600/2550 and 30.50/30.00. Copper and Natural Gas look bullish towards 4.3-4.4 and 3.5-4.0 respectively. The rise in Natural Gas is triggered by the forecast of colder temperatures in the US from 28th Nov to 2nd Dec which could increase heating demand.
Brent ($73.17) is facing rejection near its immediate resistance at 74. While below this, it can fall back to 72-71 in the near term and hold between 74-71 for some time. Alternatively, a sustained break above 74 can take it further higher towards 76-78 but such a rise looks less likely for now.
WTI ($69.07) needs to see a sustained break above 69.50 to see higher levels of 72-74. For now, it can fall back to 67 and trade between 69-67 for a few sessions while below 69.50.
Gold ($2656) has risen above 2650 in line with our expectations. Immediate trend resistance is coming near 2660 which needs to break for a rise towards 2700-2750. Else the price can fall back to 2600-2550. Watch price action near 2660.
Silver (31.14) has dipped while the 21-Day moving average resistance at 31.5 is holding well for now. It can fall back to 30.5-30.0 in the near term if the decline continues. Only a sustained break above 31.5, if seen, can take it higher towards 32.0-32.5.
Copper (4.1595) has inched up slightly and can rise further towards 4.3-4.4 in the upcoming weeks.
Natural Gas (3.2210) has broken sharply above the crucial resistance at 3 and tested a high of 3.2370 yesterday contrary to our expectations of reversing from 3. The bullish momentum is driven by colder temperature forecasts for late November into early December. According to news sources, Maxar Technologies predicts a significant temperature drop from November 28 to December 2 which is expected to increase heating demand. Now 3 could act as an important support and while the rise sustains, the price could move further up and target 3.5-4.0 in the upcoming weeks.
DATA TODAY
1:30 07:00 Australia Labour Force
... Kshitij Exp - ... Expected - ... Previous64.1K
13:30 19:00 US Philifed Index
... Kshitij Exp 9.4 ... Expected 6.3 ... Previous 10.3
14:00 19:30 US Existing Home Sales
... Kshitij Exp 3786K ... Expected 3940K ... Previous 3840K
DATA YESTERDAY:-
---------------
7:00 12:30 UK CPI Y/Y
... Kshitij Exp 1.8% ... Expected 2.2% ... Previous 1.7% ...Actual 2.3%
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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