WTI Crude Oil enjoyed a solid week of gains and continued to show buyers are active in the commodity.
Since touching a low of nearly 72.350 on the 4th of June, WTI Crude Oil has produced incremental steps upwards.
The commodity went into this weekend near the 78.440 price, and a high was achieved this past Wednesday when the 79.300 value was hit. And this is a speculative signal.
Yes, WTI Crude Oil went into the weekend having achieved gains, but after hitting the near-term high water mark on Wednesday the commodity actually then traded within a tight price range testing support and also producing reversals higher. WTI Crude Oil has re-established a known range which it has tested quite steadily from a technical perspective since the 1st of May.
The Noise of Pundits and Non-Traders in WTI Crude Oil
An inspection of news headlines covering the WTI Crude Oil market claimed that demand was escalating and was a factor in the price of the commodity. While demand is always a factor in WTI Crude Oil, the question must be asked if buyers had suddenly grown worried about a lack of supply. And the answer is no.
Essentially WTI Crude Oil remains in a well-practiced price range and its inability to sustain prices above the 79.000 level in the middle of the week shows trading is acting in a known manner. The price range between 77.000 and 79.000 should be monitored in the coming days. Unless WTI Crude Oil suddenly jumps above the 80.000 mark and begins to challenge the 81.000 realms with price velocity and signs of not looking back, it is highly likely speculative traders will be able to wager on support and resistance levels which have been seen for the past month and a half.
Breaking Resistance and the Move Higher Last Week
When the price of 76.000 was broken on last Monday and sustained, price velocity upwards hit a high of 78.200 later in the day. But before technical traders believe that is a sign that a sustained bullish run is going to suddenly dominate trading, it should be remembered a strong move upwards also occurred on Thursday the 6th of June, this when the 75.000 price was demonstrated, returning the commodity back to known higher price elements.
The ability to stay above 78.000 USD before going into this weekend will likely become a focal point for trading tomorrow.
If WTI Crude Oil can open with upwards momentum that would be a slightly positive sign for the commodity, but unless the 79.000 value is hit and price action remains above this level, it may be seen as a sign the near-term price range will test its current near-term highs but not penetrate marks significantly upwards.
WTI Crude Oil Weekly Outlook:
Speculative price range for WTI Crude Oil is 76.100 to 80.200
The ability of WTI Crude Oil to trade higher this week was a welcome development for short-term bulls who likely believed the commodity had been oversold in late May and early June. The price of the commodity has re-established a known mid-term price range, but still is resting within the lower depths of its three month charts. The current price levels of WTI Crude Oil are likely pleasing producers of the energy.
Unless the 80.000 price is hit and maintained, speculators will continue to focus on the existing known range. There are certainly no guarantees, but WTI Crude Oil’s in ability to maintain the 79.000 level last week indicates sellers remain speculatively active in the commodity too. Unless there is a sudden news development from the Middle East which causes impetus for WTI Crude Oil it is likely the price range will remain calm.
To get ACCURATE LIVE ACCURATE 2-3 TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
Gold Forecast: Continues to See Support in the Same Area Ahead of FOMC
You can see that the gold market initially fell during the trading session, but it does seem to be catching its support a little bit as the Americans step on board.
And it’ll be interesting to see how this plays out, mainly due to the fact that it had plunged so drastically before due to the idea that the Federal Reserve may have to stay relatively tight.
However, it also looks like we have a scenario where gold is trying to do everything it can to perhaps find its footing, and if it does, that could be an excellent entry. Keep in mind that we have the FOMC meeting during the session on Wednesday. So that has a certain amount of influence as well. So do be cognizant of this.
Look for Value
With that being said, I think you look at this through the prism of a market that offers value, but you don’t want to get too big ahead of the FOMC meeting because quite frankly, you could get a nasty surprise and you never really know what the market is going to do in reaction to, for example, the press conference.
So ultimately this is a situation where I’m a buyer. But if we break down below $2,280, I might be inclined to simply wait for even better pricing. And I do think that’s possible. So, with this being the case, the market is likely to continue to see a lot of volatility, but ultimately, we’ll try to rally and go looking towards the $2,400 level.
One thing that captures my attention is the fact that the market sold off so drastically last Friday yet has just sat at support. This is generally a good sign and suggest that perhaps the market is much more resilient than a lot of people believe. If that’s going to be the case, I think it’s probably only a matter of time before we rallied. Even if we do not, then the market should offer value at an even lower level, which becomes even more interesting.
Geopolitical issues, central banks around the world cutting rates, and of course a general uneasiness should continue to make gold attractive for most buyers. Beyond that, central banks continue to be net buyers of gold, so that also means that there’s at least one huge buyer in the market at anytime.
Silver Forecast: Plunges into Support Region (Signal & Video)
Silver fell rather hard during the early hours on Tuesday. But really at this point in time, we have seen buyers jump in a couple of different times during the day, so it will be interesting to see if this holds.
A lot of what traders are paying close attention to is the FOMC meeting on Wednesday. So perhaps this is the market trying to get out of the way of anything that Jerome Powell says.
I do think that there are supportive areas underneath that people will be paying close attention to, which of course starts with the $29 level. But I think underneath there you have the 50 day EMA that is important, and then the $28.50 level that has shown itself to be important multiple times in the past. The reality is we will get a lot of our answers after the FOMC meeting, and therefore, I think the next 24 hours are probably a bit erratic at best. However, if we were to turn around and recapture the $30 level, it would be a huge coup for the buyers and it could really send this market much higher.
We Are Still in an Uptrend
We are still in an uptrend, despite the fact that it’s been brutal for the last couple of days, but we certainly are starting to ask some serious questions about silver overall. Keep in mind that silver is an industrial metal as well as a precious metal, so it does have a little bit of a different attitude in general than gold, so you can’t really extrapolate one to the other anymore.
That being said, when precious metals sell off, silver gets absolutely crushed. In fact, it is much more volatile and much more dangerous than gold. And that’s exactly why a futures contract has much more margin for silver than it does gold. So, you should extrapolate that into your CFD trading, recognizing that your position sizing needs to be very reasonable. We are approaching a point of inflection, and I think a lot of longer term trades are about to kick off. It’s our job to watch and follow.
Potential signal: IF we are above $28.50 after the FOMC press conference on Wednesday, I am a buyer of silver, with a $1 stop loss, and will be aiming for $32.50 above.
To get ACCURATE LIVE ACCURATE 2-3 TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
The US dollar steadies over lower-than-expected initial jobless claims.
Sentiment remains upbeat, however, the pair is struggling to climb past the psychological level of 115.00, probably due to overextension. The RSI’s double top in the overbought area and bearish divergence suggests that the rally could be losing steam.
A breach below 113.90 would prompt weaker hands to exit, leading to a pullback towards 113.00. A rebound past the said resistance would send the price to March 2017’s high of 115.40.
XAGUSD to test critical ceiling
Silver stalls as the greenback reclaims some lost ground. The break above the round number of 24.00 indicates strong commitment from the buy-side.
The bulls are looking at the major resistance at 24.80 from the daily timeframe, as a breakout would end a five-month-long correction and pave the way for a bullish reversal.
However, an overbought RSI coupled with a bearish divergence suggests possible exhaustion in the run-up. 23.60 would be the first level to watch for if the price pulls lower in search of support.
SPX 500 tests all-time high
The S&P 500 flies high supported by better-than-expected third-quarter earnings. The index has reached the previous all-time high at 4550.
A breakout may trigger a runaway rally. Nonetheless, a repeatedly overbought RSI may cause a limited pullback as buyers take profit.
A drop below the immediate support at 4515 would pull the trigger. 4445 would be next as it coincides with the 38.2% Fibonacci retracement level of the October rally. The bulls are likely to buy the dips though after sentiment turns optimistic.
To get ACCURATE LIVE ACCURATE 2-3 TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
Market Morning Briefing: Pound Seems To Be Holding Above 1.36
STOCKS
Dow trades higher after the FOMC and looks bullish for the near term. A rise above 35000 is needed to prevent further fall towards 33000. Dax is also bullish and needs to sustain above 15500 to move up further. Nikkei looks bearish while below 30000. Shanghai has risen well from support and looks bullish. Nifty and Sensex can see a steady rise in the near term.
Dow (34258.32, +338.48, +1%) has risen back above 34000 and while it holds strong, we may expect a rise back towards 34500-34750. However, in the medium term it needs to rise above 35000 and sustain higher to prevent any vulnerability to fall back towards 33000.
DAX (15506.74, +158.21, +1.03%) has risen well too but needs to rise and sustain above 15500 to indicate bullishness towards 15700/800 in the medium term.
Nikkei (29639.40, -200.31, -0.67%) continues to fall over the last few sessions and the view is bearish while below 30000 to see a dip towards 29250-29000 followed by a rise towards 30500-3700 eventually in the longer run. Japan markets are closed today.
Shanghai (3648.57, +20.08, +0.55%) rose sharply from support near 3560 and while that holds, view is bullish on the shanghai.
COMMODITIES
Commodities have risen well. Crude prices have risen and are heading towards resistances. Brent needs to hold below 77-78 while WTI can test 73-74 before coming off from there. Any break above the mentioned resistances can take them higher towards 80 and 75 respectively which are crucial in the medium term. Gold has dipped and needs to sustain above 1740 to move up again soon. Else a fall to 1725/00 cannot be negated in the longer run. Silver can fall towards 22-21.50 but before that it can attempt to rise towards 23.50. Copper tested 4 and has bounced back well from there. It can now rise back towards 4.30/40.
Brent (76.44) has risen well breaking above 75 and could now head towards interim resistance at 77-78 above which there is crucial resistance at 80. The broad 77-80 zone is likely to be tested before a sharp fall towards 70 is seen in the medium term.
WTI (72.41) has risen well as expected and could test 73-74 in the near term.
Gold (1763.90) has fallen as expected from resistance zone of 1780/90 and while that holds, a dip to 1740 cannot be negated. We would have to watch price action near 1740 to see if the price bounces from there or falls further down in the medium term. While correlation with Euro remains strong, a possible bounce in Euro from 1.1665 can help Gold bounce back too.
Silver (22.55) has risen a bit and has scope to rise towards 23.50 before falling off from there. Any break below 22 if seen in the near term would prove contrary to our view and lead to a sharp fall towards 22-21.50. .
FOREX
FED announced that it would start tapering by end of this year and stop purchases by mid-2022. It also signaled 3-rate hikes in 2023. Dollar Index rose sharply but needs to sustain above 93.40 to trade higher else a decline towards 93 is possible soon. Euro has broken below 1.17 and may test 1.1665 support which needs to hold to prevent further dip to 1.16. Aussie and Pound have bounce well from immediate supports. USDCNY is holding below resistance zone of 6.47/48. USDINR can test 74 on the upside but has 50% chance that it would come off from there back to 73.80/60. Watch price action near 74.00
Dollar Index (93.44) rose sharply to 93.4150 yesterday as FED announced starting of tapering by end of this year and signaled 3-rate hikes in 2023. Although the index has come off a bit it needs to break below 93.40 and sustain lower to avoid any further rise towards 93.60-93.80 in the near term. Watch price action near 93.40.
Euro (1.1697) fell to test 1.1684 yesterday before rising slightly from there. Note support near 1.1665 which needs to hold in order to keep some room on the upside intact. Else a fall towards 1.16 cannot be neagted.
EURJPY (128.50) has bounced well from support near 128 and while it holds, there is scope for a rise to 129 in the near term.
Dollar-Yen (109.88) rose sharply along with the rise in Dollar Index. But note that the pair still trades within 109-110.40 range which could hold for some more time.
Aussie (0.7226) has paused its fall near 0.7220-0.7200 and a bounce looks possible from current levels towards 0.7250-0.73 eventually.
Pound (1.3625) seems to be holding above 1.36 and while that holds, a bounce back to 1.3650-1.37 cannot be negated in the near term. Only a break below 1.36 if seen will force to look for lower levels.
INTEREST RATES
The US Federal Reserve left the rates unchanged at 0%-0.25%. It had said that the stimulus taper will begin soon. The PCE and Core PCE inflation projections have been revised higher to 4.2% and 3.7% respectively from its earlier projection of 3.4% and 3% respectively. The US Treasury yields have risen at the near-end (2Yr and 5Yr) while the far-end (10Yr and 30Yr) yields have seen a dip. A break below the immediate supports can drag the far-end yields further lower from here. The German yields remain stable and are likely see a fresh fall from here and resume the broader downtrend. The 5Yr and 10Yr GoI have risen-back yesterday. However, they have key resistances ahead that can cap the upside and keep it pressured for a further fall going forward.
The US 2Yr (0.24%) and 5Yr (0.85%) Treasury yieldshave risen while the 10Yr (1.30%) and the 30Yr (1.81%) have dipped after the Fed meeting outcome. A fall below 1.28% on the 10Yr and 1.8% on the 30Yr can drag the yields to 1.2%-1.18% (10Yr) and 1.7% (30Yr) in the coming days. It will also negate the chances of seeing 1.4%-1.45% (10Yr) and 2% (30Yr) on the upside. We will have to wait and watch the follow-up movement in the coming sessions.
The German 2Yr (-0.72), 5Yr (-0.64%), 10Yr (-0.33%) and 30Yr (0.16%)yields continue to remain stable below their key resistances. Our view remains the same. We expect the yields to resume the broader downtrend and see a fresh fall from here. The 10Yr can fall to -0.5% while below -0.25% and the 30Yr can test 0% while it sustains below 0.2%.
To get ACCURATE LIVE TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
Market Morning Briefing: Pound Seems To Be Holding Above 1.36
STOCKS
Dow trades higher after the FOMC and looks bullish for the near term. A rise above 35000 is needed to prevent further fall towards 33000. Dax is also bullish and needs to sustain above 15500 to move up further. Nikkei looks bearish while below 30000. Shanghai has risen well from support and looks bullish. Nifty and Sensex can see a steady rise in the near term.
Dow (34258.32, +338.48, +1%) has risen back above 34000 and while it holds strong, we may expect a rise back towards 34500-34750. However, in the medium term it needs to rise above 35000 and sustain higher to prevent any vulnerability to fall back towards 33000.
DAX (15506.74, +158.21, +1.03%) has risen well too but needs to rise and sustain above 15500 to indicate bullishness towards 15700/800 in the medium term.
Nikkei (29639.40, -200.31, -0.67%) continues to fall over the last few sessions and the view is bearish while below 30000 to see a dip towards 29250-29000 followed by a rise towards 30500-3700 eventually in the longer run. Japan markets are closed today.
Shanghai (3648.57, +20.08, +0.55%) rose sharply from support near 3560 and while that holds, view is bullish on the shanghai.
COMMODITIES
Commodities have risen well. Crude prices have risen and are heading towards resistances. Brent needs to hold below 77-78 while WTI can test 73-74 before coming off from there. Any break above the mentioned resistances can take them higher towards 80 and 75 respectively which are crucial in the medium term. Gold has dipped and needs to sustain above 1740 to move up again soon. Else a fall to 1725/00 cannot be negated in the longer run. Silver can fall towards 22-21.50 but before that it can attempt to rise towards 23.50. Copper tested 4 and has bounced back well from there. It can now rise back towards 4.30/40.
Brent (76.44) has risen well breaking above 75 and could now head towards interim resistance at 77-78 above which there is crucial resistance at 80. The broad 77-80 zone is likely to be tested before a sharp fall towards 70 is seen in the medium term.
WTI (72.41) has risen well as expected and could test 73-74 in the near term.
Gold (1763.90) has fallen as expected from resistance zone of 1780/90 and while that holds, a dip to 1740 cannot be negated. We would have to watch price action near 1740 to see if the price bounces from there or falls further down in the medium term. While correlation with Euro remains strong, a possible bounce in Euro from 1.1665 can help Gold bounce back too.
Silver (22.55) has risen a bit and has scope to rise towards 23.50 before falling off from there. Any break below 22 if seen in the near term would prove contrary to our view and lead to a sharp fall towards 22-21.50. .
FOREX
FED announced that it would start tapering by end of this year and stop purchases by mid-2022. It also signaled 3-rate hikes in 2023. Dollar Index rose sharply but needs to sustain above 93.40 to trade higher else a decline towards 93 is possible soon. Euro has broken below 1.17 and may test 1.1665 support which needs to hold to prevent further dip to 1.16. Aussie and Pound have bounce well from immediate supports. USDCNY is holding below resistance zone of 6.47/48. USDINR can test 74 on the upside but has 50% chance that it would come off from there back to 73.80/60. Watch price action near 74.00
Dollar Index (93.44) rose sharply to 93.4150 yesterday as FED announced starting of tapering by end of this year and signaled 3-rate hikes in 2023. Although the index has come off a bit it needs to break below 93.40 and sustain lower to avoid any further rise towards 93.60-93.80 in the near term. Watch price action near 93.40.
Euro (1.1697) fell to test 1.1684 yesterday before rising slightly from there. Note support near 1.1665 which needs to hold in order to keep some room on the upside intact. Else a fall towards 1.16 cannot be neagted.
EURJPY (128.50) has bounced well from support near 128 and while it holds, there is scope for a rise to 129 in the near term.
Dollar-Yen (109.88) rose sharply along with the rise in Dollar Index. But note that the pair still trades within 109-110.40 range which could hold for some more time.
Aussie (0.7226) has paused its fall near 0.7220-0.7200 and a bounce looks possible from current levels towards 0.7250-0.73 eventually.
Pound (1.3625) seems to be holding above 1.36 and while that holds, a bounce back to 1.3650-1.37 cannot be negated in the near term. Only a break below 1.36 if seen will force to look for lower levels.
INTEREST RATES
The US Federal Reserve left the rates unchanged at 0%-0.25%. It had said that the stimulus taper will begin soon. The PCE and Core PCE inflation projections have been revised higher to 4.2% and 3.7% respectively from its earlier projection of 3.4% and 3% respectively. The US Treasury yields have risen at the near-end (2Yr and 5Yr) while the far-end (10Yr and 30Yr) yields have seen a dip. A break below the immediate supports can drag the far-end yields further lower from here. The German yields remain stable and are likely see a fresh fall from here and resume the broader downtrend. The 5Yr and 10Yr GoI have risen-back yesterday. However, they have key resistances ahead that can cap the upside and keep it pressured for a further fall going forward.
The US 2Yr (0.24%) and 5Yr (0.85%) Treasury yieldshave risen while the 10Yr (1.30%) and the 30Yr (1.81%) have dipped after the Fed meeting outcome. A fall below 1.28% on the 10Yr and 1.8% on the 30Yr can drag the yields to 1.2%-1.18% (10Yr) and 1.7% (30Yr) in the coming days. It will also negate the chances of seeing 1.4%-1.45% (10Yr) and 2% (30Yr) on the upside. We will have to wait and watch the follow-up movement in the coming sessions.
The German 2Yr (-0.72), 5Yr (-0.64%), 10Yr (-0.33%) and 30Yr (0.16%)yields continue to remain stable below their key resistances. Our view remains the same. We expect the yields to resume the broader downtrend and see a fresh fall from here. The 10Yr can fall to -0.5% while below -0.25% and the 30Yr can test 0% while it sustains below 0.2%.
To get ACCURATE LIVE TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
EURJPY Is Holding Below Immediate Resistance At 130.50
STOCKS
Asians are trading weak ahead of the US Federal Reserve meeting outcome tonight. While most of the indices are well within their current trading range, the big surprise is from Shanghai which has broken below the strong support level of 3400 contrary to our expectation. Inability to bounce back could be bearish for Shanghai going forward. Dow has to break above 35100 to move up further. DAX is oscillating within its 15200-15800 range. Nikkei has dipped towards the lower end of its 27000-29500 range. Sensex and Nifty have also declined sharply yesterday after testing the upper end of their 52000-53200 and 15600-15900 range respectively earlier. Will the Fed meeting outcome provide the possible trigger to break the current range in equities on the upside? We will have to wait and watch.
Dow (35058.52, −85.79, -0.24%) has failed to sustain above 35100 and has come back into the 35000-35100 resistance zone. A sustained rise past 35100 is needed to see the rise to 36000. A fall below 35000 can drag the Dow to 34500-34000 again and will delay the rise to 36000. The broader view is however bullish with strong supports at 34000 and 33000.
DAX (15519.13, −99.85, -0.64%) seems to lack strength to move up towards the upper end of its 15200-15800 range. While below 15600, a test of 15200 is possible in the near-term. We expect the range to remain intact for some more time. The bias remains bullish to break the range on the upside and move up to 16000-16200 eventually.
Shanghai (3378.02, −3.17, -0.094%) has declined below 3400 contrary to our expectation to sustain above it. Our long-term view of seeing 3700-3800 could be getting negated now. Inability to bounce back above 3400 can drag Shanghai to 3200 and even lower in the coming weeks.
COMMODITIES
Crude prices continue to trade higher and could test immediate resistances while Gold has also recovered on Dollar weakness ahead of the FED policy meet statement due tonight and could head towards 1820. Silver has broken below 25 and could head towards 24-23 in the medium term while Copper can range within 4.65-4.40 before rising towards 4.80 in the longer run.
Brent (74.95) and WTI (72.12) both have risen well today. As mentioned yesterday, Brent can rise towards $75-76 while WTI can rise towards $74 before again coming off from there in the near term. Failure to fall from expected levels would be strongly bullish for a possible extension towards $78-80 (Brent) and $75/78 (WTI) in the longer run. For now watch price action near mentioned resistances.
Gold (1804.30) has recovered the fall seen yesterday on weakness in the Dollar Index. While the index remains below 92.50 and continues to fall, Gold could rise to test 1820.
Silver (24.78) has dipped below 25 and if it does not rise back to 25+, it is bearish for a fall to 24-23 in the medium term.
FOREX
Volatility is seen in the currency markets today as we wait for the post FED policy meet announcements especially on interest rates, inflation and when the FED is likely to start reducing its purchases of government bonds. Dollar Index has fallen below immediate support at 92.50 and Euro has risen past 1.1820. We need to see if this sustains and continues to break below 92 and above 1.1830/50 respectively, which could then indicate a reversal. Aussie is stable while Pound has bounced well and could be headed towards 1.3950/40 on a break above 1.39. EURJPY looks ranged within 130.5-129. USDCNY has surged above 6.50 validating the possible triangle formation mentioned last week. We need to watch USDINR to see if it rises to test 74.60/70 on the upside or falls sharply to 74.30/20 on the downside.
Euro (1.1821) has moved up again as the Dollar Index fell ahead of the final statement due after the FED policy meet due today. All eyes are on the FED post meeting conference for announcements regarding inflation, economic growth and interest rates and when the FED is likely to start reducing its purchases of government bonds. As expected yesterday, a break on Euro above 1.1830/50 would be an initial signal for a bullish break out and could open up chances of a rise towards 1.19 and beyond in the longer run. Watch price action over the next 1-2 sessions to see if the rise sustains. Dollar Index (92.44) has broken below immediate support at 92.50 and needs to break below 92 to indicate further fall going forward. Need to keep an eye whether the current fall is only due to expectations from the FED meeting outcomes or is likely to sustain. While below 92.50, the index is bearish.
EURJPY (129.78) is holding below immediate resistance at 130.50 and while that holds, a broad range of 130.50-129.50/129.00 may hold for now.
Dollar-Yen (109.77) has fallen sharply from 110.60 but we may expect a bounce back from 109.00-109.50 soon. Failure to see a bounce from 109 could make the pair vulnerable to a sharper fall in the near term.
Aussie (0.7361) is likely to trade in a stable fashion within 0.7330-0.74 while Pound (1.3821) has been rising well over the past few sessions and any break above 1.39 can be further bullish towards 1.3950-1.40 on the upside. Watch price action at 1.39 over the next couple of sessions.
USDCNY (6.5055) has also finally risen above 6.50, validating the triangle pattern that we had mentioned last week. While there could be some pull back from current levels towards 6.4950-6.50, view is bullish for the medium term towards 6.52/55.
INTEREST RATES
The US Treasury yields have dipped at the far-end ahead of the US Federal Reserve meeting outcome tonight. The 30Yr is at a key support and the 10Yr has support slightly below current levels. We expect the supports to hold and produce a corrective bounce before the broader downtrend resumes again. The German yields are coming closer to their key intermediate supports within their downtrend. A corrective bounce is possible from the upcoming supports and then a fresh fall is possible. The 5Yr GoI is stuck in a narrow range and is attempting to break the range on the upside and move up further.
The US 2Yr (0.21%) and 5Yr (0.71%) Treasury yields remain stable while the 10Yr (1.25%) and 30Yr (1.90%) have dipped. The 30Yr has to sustain above 1.9% in order to see a corrective bounce to 2.1%-2.2% in the coming weeks. A break below 1.9% can drag it to 1.7%. The 10Yr on the other hand has support at 1.2% and 1.1% from where we expect it to bounce towards 1.45%-1.5% first and then resume the broader downtrend.
The German 2Yr (-0.75%), 5Yr (-0.73%), 10Yr (-0.44%) and 30Yr (0.03%) have dipped further. Our view of testing -0.45%/-0.50% (10Yr) and 0%/-0.05% (30Yr) on the downside remains intact. Thereafter a corrective bounce to -0.30%/-0.25% (10Yr) and 0.10% (30Yr) can be seen and then the broader downtrend can resume again eventually.
The 5Yr GOI (5.6902%) is attempting to break the narrow 5.66%-5.7% on the upside. Such a break, if seen, can take the yield up to 5.76% in the coming days.
To get ACCURATE LIVE TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
Market Morning Briefing: Aussie Has Bounced Well From 0.73
STOCKS
Strong recovery in equities over the last couple of days after having fallen sharply on Tuesday. This keeps our broader bullish view on equities intact. The indices can oscillate in a broad range and we expect the sideways range to be broken on the upside. The Dow is back above 34500 and can revisit the 35000-35100 resistance which has to be broken to see a fresh rise. DAX has bounced from its key support and can gain momentum on a break above 15600. Nikkei is closed today and tomorrow. Shanghai retains its 3500-3625 range and is moving up within it. Sensex and Nifty can bounce-back within their 52000-53000 and 15600-15900 range and are likely to break them on the upside eventually.
Dow (34798, +286.01, +0.83%) has risen-back sharply after Tuesday’s fall, recovering all the loss. A test of 35000-35100 looks likely again while the momentum sustains. A strong rise past 35100 is needed to see a fresh rise to 36000. Broadly, 33000-35100 is the trading range for now. The bias is bullish to see an upside breakout of this range eventually.
The support at 15000 has held very well and DAX (15422.50, +206.23, +1.36%) has bounced from the low of 15048.56. A strong rise past 15600 from here can see a revisit of 15800. That will also keep alive the chances of seeing 16000-16200 from here itself. While below 15600, the danger of seeing 14800 on the downside first will still be there before seeing 16000-16200 on the upside.
Shanghai (3569.70, +7.04, +0.20%) is retaining its 3500-3625 range and is moving within its. The bias is bullish to see an upside break above 3625 and a rise to 3700-3800 over the medium-term. 3450 and 3400 are deeper supports seen below 3500. Only a break below 3400 will turn the broader view bearish.
Sensex (52198.51, −354.89, -0.68%) can rise back within the 52000-53000 range taking cues from the recovery in the global equities. Our broader view remains bullish while above the strong supports at 52000 and 51000. As such Sensex is likely to break above 53000 and see a rise to 54000 and higher levels over the medium-term.
Similarly, Nifty (15632.10, −120.30, -0.76%) can rise within its 15600-15900 range. The broader view is bullish to see an upside break above 15900 and a rise to 16000-16200 going forwards. Supports are at 15600 and 15500. The bullish view will get negated only on a break below 15500.
COMMODITIES
Commodities have recovered a bit on weak Dollar over the last 2-days and if the weakness sustains, we may expect commodities to rise back in the near term. Crude prices can rise towards immediate resistance near 72 from where another dip looks possible while Gold and Silver needs to remain above 1800 and 25 to rise towards 1820/40 and 26 respectively. Failure to hold above 1800 and 25 can drag them down towards 1780 and 24 which are crucial supports on the downside. Copper can be ranged within 4.30-4.15 and a break on either side would give more clarity on further direction.
Brent (71.94) is holding above 68 just now and the corrective upmove can take the price higher towards 72-72.50 from where another fall towards 68-65 can be expected. Only a break above 72, if seen will indicate a possible rise back towards 75-77 in the medium term. Watch price action after a rise to 72. WTI (70.08) on the other hand is holding above 64 and can rise to 71-72 in the next couple of sessions from where a dip looks likely.
Gold (1801.80) rose to 1814 yesterday but could not sustain the rise beyond that. While below initial resistance at 1820, we may see a delay in a rise towards our expected 1840/60 levels. While 1800 holds, a ranged move between 1800 and 1820 looks possible but a break below 18000 if seen can drag it down to crucial support at 1780 again. Watch price action near current levels.
Silver (25.35) tested 24.79 yesterday before bouncing back to levels above 25. Another fall below 25, if seen in the near term can be bearish for Silver towards 24-23 in the medium term. On the upside the maximum upmove could be limited to 26 over the next 1week.
Copper (4.2770) is holding well above the support near 4.20/15 and while that holds, we may continue to see ranged movement between 4.15 and 4.30. A break on either side will give clarity on further direction.
FOREX
Dollar Index has dipped a bit taking Euro higher towards 1.18. But we will watch price action closely for a few more sessions to get clarity on medium term direction. Aussie and Pound have recovered and seem to be in a corrective upmove and we may expect another fall over the next 2-3 sessions. USDCNY may fall to 6.45/44 before rising sharply towards 6.50 and higher in the medium term. USDINR may fall today towards 74.40/20. EURJPY can trade within 130.20-128.80 while USDJPY may remain within 110.80-109 levels in the near term.
Dollar Index (92.776) fell sharply from 93.19 and could be headed towards 92.40/92.00 in the near term. Unless a break below 92 is seen, it would be difficult to say if a reversal is in place and scope for a rise back to 93.0-93.20 may still be a possibility in the medium term. Watch price action on a possible fall to 92.40 which is an interim support and can hold for this week.
Euro (1.1795) has risen on Dollar weakness. But the currency may range within 1.1750-1.1820 for the very near term and while the Dollar Index is not very confident of coming off sharply from current levels, our bearish hopes on Euro seems to be increasing and will get confirmation on a break below 1.1750 in the near term. Only a rise above 1.1820/50, if seen over the coming week will show some bullish signs and indicate a rise.
EURJPY (129.91) tested 130.18 before coming off from there. A range of 130.20-128.80 may hold for the near term unless a break on either side is seen.
Dollar-Yen (110.13) tested 110.38 before coming off from there. A trade region of 110.80-109.00 may hold for the near term.
Aussie (0.7353) has bounced well from 0.73 and while that holds, Aussie could be bullish for a rise towards 0.74. A range of 0.73-0.74 may hold for the near term.
Pound (1.3705) has risen well from 1.3570 and while that holds, a rise to 1.38 can be possible. Any sharp rejection from 1.38, if seen can again take Pound back towards 1.3570/1.3500 in the longer run.
USDCNY (6.4675) has fallen sharply from 6.49 and can extend towards 6.45 before bouncing back from there. The 6.44/45-6.49/50 range may hold for now which could be followed by a sharp upmove soon. The pair seems to be on the last leg of a possible triangle correction pattern on the near term charts and could be preparing for a sharp breakout in the coming 1-2 weeks.
USDINR (74.62) held below crucial resistance at 75 last week and while that holds, we may expect a dip in the pair towards 74.40/20 in the near term. Note that below 75, important supports are seen at 74.60, 74.40 and 74.20 respectively that holds decent possibilities of pushing the pair to higher levels in the medium term. A break below 74.60 looks likely today to pave way for 74.40/20 in the near term.
INTEREST RATES
The US Treasury yields have recovered sharply from Tuesday’s fall and are back above their crucial supports. While this bounce sustains above the supports, the corrective rise that we had mentioned earlier will still be a possibility in the coming days. The German Yields remain bearish and have more room to fall from current levels. The 5Yr GOI has broken its 5.64%-5.7% range on the downside and can fall further in the coming days while this break sustains.
The US 2Yr (0.21%), 5Yr (0.74%), 10Yr (1.29%) and 30Yr (1.94%) have risen back sharply after tumbling on Tuesday. The 30Yr is back above 1.9% and the danger of seeing 1.7% on the downside mentioned earlier has reduced. A rise past 2% from here can see a relief rally to 2.1%-2.2%. The 10Yr on the other hand can see a corrective rise to 1.45%-1.5% while it manages to sustain above 1.2%.
The German 2Yr (-0.72%) and 5Yr (-0.69%) yields have dipped further while the 10Yr (-0.40%) and 30Yr (0.08%) remain stable. Our bearish view remains intact. The 10Yr has room to test -0.45%/-0.50%. The 30Yr is at an intermediate support but looks vulnerable to break below it and fall to 0%/-0.05% in the coming days.
The 10Yr GoI (6.1904%) is stuck below 6.2% with muted trading. The 5Yr GOI (5.6350%) on the other hand has broken the 5.64%-5.7% range on the downside. While this break sustains a further fall to 5.6% and 5.56% is possible in the coming days.
To get ACCURATE LIVE TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
Dow fell to test 34000 as expected after the US Federal Reserve meeting outcome yesterday. The Fed has raised the inflation forecast for 2021 and hinted two rate hikes by end 2023 from its dot-plot. It will have to be seen if Dow bounces today or extends the fall to 33500. DAX remains below 15800 and can fall to 15400 if it breaks below 15600. Nikkei has declined below 29000 and can test 28500. Shanghai has tested 3500 and holding above it. Sensex and Nifty fell sharply yesterday and can extend the fall following the global equities to test their key support levels of 52000 and 15600 respectively.
Dow (34033.67, −265.66, -0.77%) has tested 34000 as expected and has bounced from the low of 33917.11. It will have to be seen if it can move up today or not. A fall below 34000 can drag it to 33500-33200 in the coming days before reversing higher again. 33500-33200 are important supports below 34000 which will need a close watch.
DAX (15710.57, −18.95, -0.12%) is stuck between 15600 and 15800. We will have to wait for a breakout on either side to see if DAX can move up to 16000-16100 or fall to 15400. While above 15400 the broader trend will remain up to test 16000-16100 on the upside. Only a break below 15400 will bring the index under pressure.
Shanghai (3525.17, +6.84, +0.19%) has tested 3500 as expected and has bounced from there. While above 3500, a test of 3550-3560 is possible in the near-term. Incase of a break below 3500, the fall can extend up to 3450 before a strong reversal is seen.
COMMODITIES
Crude prices have tested initial resistance at $75 (Brent ) and $73 (WTI) from where a dip has been seen but we may expect prices to recover in the medium term to head higher again. Gold and Copper have fallen sharply on strong Dollars while surprisingly Silver has remained stable above 27. We may look for recovery in commodity prices soon.
Brent (73.71) and WTI (71.51) tested 74.96 and 72.99 on the upside post the FOMC and have fallen from there. We may expect $75 and $73 to hold on Brent and WTI for now before the prices rise again to re-test them in the near term. We continue to see possible targets of $75-77 on Brent and $73-75 on WTI, initial limit of both being tested yesterday.
Gold (1825) has fallen sharply on strong Dollar overnight taking it down to test support near 1820-1800 while Silver (27.23) continues to remain above 27 surprisingly, indicating some intrinsic strength to move back to higher levels. Silver continues to trade within 27.0-28.50 while Gold could attempt to bounce back towards 1840/60 in the near term. Failure to hold above 1800/20 for Gold could make it vulnerable to a sharp fall to 1750 in the longer run. Watch for a bounce while above 1800/20.
FOREX
US FED held rates at zero but indicated that it expects two rate hikes by the end of 2023 puling up the Dollar Index sharply above 91. The FED pledged to continue its asset purchases at $120 billion monthly until substantial further progress is seen on employment and inflation. It raised the expectation for headline inflation to 3.4% compared to March projection of 2.4%.
Dollar Index, USDJPY, USDCNY all trade higher after the FOMC statement and could recover a bit over today and tomorrow to end the week on not so higher note. Aussie, Pound,EURJPY have fallen well but could recover in the near term. USDINR is expected to rise to 73.50/60 initially but we would allow for a maximum upside of 73.80 within the current upmove.
Dollar Index (91.348) tested 91.48 exactly in line with our expectation of a rise towards 91.0-91.50 mentioned yesterday. The index has dipped from 91.50 and could fall back to 91 while 91.50 holds as a decent resistance just now. We would not be going long on Dollar Index just now as the sharp rise could be a one-day show, in reaction to the FOMC policy statement. For the index to indicate long term bullishness, we will have to see a sustained rise above 91.50 which looks less likely for now. We would wait to watch price action for a few more sessions.
Euro (1.20) has fallen to 1.20 after the FOMC and impacted by the movement in Dollar Index. It would now be important to see if Euro bounces back from here to slowly head back towards 1.2050-1.21 or sustains below 1.21 in the medium term. A bounce back from here looks more likely.
EURJPY (132.78) fell back to132.62 but could soon move up again in the near term towards 133. A break above 133 would then be crucial to push the cross higher.
Dollar-Yen (110.64) tested 110.82, in line with our expectation for a rise to 110.50/111. But we may expect 111 to hold for now and let the pair fall towards 110.30 in the next 1-2 sessions.
Aussie (0.7628) tested 0.76 and has bounced slightly from there. A rise to 0.7650 is possible now in the very near term.
Pound (1.3998) fell sharply but while above support at 1.3950, Pound is likely to bounce back to 1.4050 in the next few sessions. View is bullish while above 1.3950.
USDCNY (6.4194) has risen to sustain above 6.40 and while it trades above 6.40, there is scope for a further rise to 6.44/45 in the near term. A sustained break above 6.45 is needed to negate any further fall from here in the medium term.
USDINR (73.3275) closed above 73.30 yesterday but if the pair manages to rise further, we may expect a test of 73.50/60 on the upside. Maximum upside within the current rise could be seen towards 73.60/80 before any fall from there is seen in the longer run. Watch price action near 73.50/60 if such a rise is seen today itself.
INTEREST RATES
Strong rise in the US Treasury yields following the US Federal Reserve’s upward revision in the inflation forecast for 2021 and its dot-plot suggesting two rate hikes by end 2023. The PCE inflation projection for 2021 is now at 3.4% up from 2.4% projected in March. 1.6% on the 10Yr will be a crucial level to watch. A break above it will pave way for further rise. The German yields hover near their key supports which we expect to hold and produce bounce in the coming weeks and keep the overall uptrend intact. The 10Yr GoI can rise in the near-term before reversing lower again.
The US 2Yr (0.21%), 5Yr (0.89%) and the 10Yr (1.57%) Treasury yields have surged while the 30Yr (2.20%) remains relatively stable. The rise to 1.58% on the 10Yr has happened as expected. 1.6% will be a key level to watch now. A break above it will pave way for a further rise to 1.7%-1.8% again. The 30Yr on the other hand can gather momentum to test 2.35%-2.4% again on a strong break above 2.25% from here.
The German 2Yr (-0.69%), 5Yr (-0.62%), 10Yr (-0.25%) and the 30Yr (0.30%) yields remain stable. Our view remains the same. -0.30% (10Yr) and 0.25% (30Yr) are the key supports which we expect to limit the downside and keep the overall uptrend intact. A fresh rise from here can take the yields up to 0% (10Yr) and 0.55% (30Yr) over the medium-term.
The 10Yr GoI (6.0450%) had come-off sharply from the high of 6.0673% yesterday. With support at 6.03% (revised from 6.04% mentioned yesterday), the view of seeing a rise to 6.08%-6.10% first remains intact. Thereafter the yield is likely to reverse lower again and keep the broader downtrend intact.
To get ACCURATE LIVE TRADES (Forex/Comex/Stocks) Telegram Financial Advisor
Rehana William |Financial Consultant _Forex_Gold Xauusd| Fund Manager 