Morning Market Outlook: STOCKS, COMMODITIES, AND FOREX ANALYSIS (17 JUNE 2021)

Market Morning Briefing: Aussie Tested 0.76

STOCKS

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.

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Morning Market Outlook: STOCKS, COMMODITIES, & FOREX ANALYSIS (8 JUNE 2021)

Aussie Has Risen Well From 0.7650 Over The Last 2-3 Sessions

STOCKS

Equities remain stable and are positive overall. Dow can rise to 35000 – the upper end of its 33500-35000 range while it sustains above 34500. DAX can rise to 15800-16000 while above 15600. Nikkei can rise to 29500-30000 with immediate support at 28500. Shanghai is consolidating between 3550 and 3625/3650 range within its overall uptrend. Sensex and Nifty continue to remain much stronger among the lot and have room to rise further in the coming days.

Dow (34630.24, −126.15, -0.36%) fell yesterday but remains above 34500. While above 34500, a test of 35000 – the upper end of the 33500-35000 range, is possible in the near-term. Also with support at 34000 and 33500 the broader picture is bullish to see a break above 35000 and a rise to 36000 eventually in the coming weeks.

DAX (15677.15, −15.75, -0.10%) is holding above the immediate support level of 15600 and keeps intact the bullish view of seeing 15800 and 16000-16100 on the upside. 15400 is an important support which has to be broken to negate the rise and turn the view bearish.

Shanghai (3587.70, −11.84, -0.33%) has come-off sharply from the high of 3621.52. This keeps the expected range of 3550-3625/3650 intact. Shanghai can continue to trade in this range for some time and then break above 3650 to target 3800 over the long-term.

COMMODITIES

Crude prices have dipped a bit and while WTI holds below immediate resistance at $70, Brent could trade within 68-72 in the near term. Gold and Silver have managed to rise a bit on Dollar weakness. Gold needs to sustain above 1900 to continue moving up towards 1920-1940 while Silver has scope to move towards resistance at 28.50. Copper can rise towards 4.65 while above 4.45.

Brent (70.91) and WTI (68.68) have dipped slightly. WTI seems to be holding below immediate resistance at $70 which can keep the price ranged within 68/65-70 for the near term before a successive rise above 70 is seen in the medium to longer term. While WTI trades below 70, Brent will find difficulty to rise above 72 and could also remain ranged within the narrow 68-72 region for the near term.

Gold (1900.80) has risen yet again on Dollar weakness. The price needs to break and sustain above 1900 in order to move up further towards 1920-1940. Watch price action near current levels to see if it continues to move up from here.

Silver (27.97) has scope to rise towards immediate resistance at 28.50 from where a rejection can be seen in the medium term.

FOREX

Currencies look mixed just now. Aussie and Pound could be ranged while Dollar Index can rise to 90.20 before again falling off from there. Euro can remain within 1.22-1.21 for now keeping EURJPY ranged within 133-134 too. USDCNY has fallen below 6.40 and may trade within 6.38-6.41 in the very near term. USDINR has immediate support at 72.70 which needs to hold in order to produce a bounce to 73 or higher in the near term. Failure to sustain above 72.70 could drag it lower towards 72.50.

Dollar Index (90.03) can remain ranged for the near term within 90.20-89.80. Thereafter watch price action on a break on either side of the mentioned range.

Euro (1.2183) needs to watch price action near 1.22 if it manages to hold and break on the upside or faces sharp rejection to fall back to 1.2150 and lower in the near term. Overall 1.22-1.21 could be the immediate trade range.

EURJPY (133.28) is stable near levels seen yesterday and as mentioned, we may expect 133-134 to be the trade range for the very near term.

Dollar-Yen (109.36) continues to dip and as mentioned yesterday, the pair could fall to 109.00-108.80 in the near term before seeing any bounce from there towards 110. Note important resistance is now seen at 110 and support near 108.35.

Aussie (0.7749) has risen well from 0.7650 over the last 2-3 sessions. A further rise could be restricted to 0.78 which if holds could keep Aussie ranged within 0.78-0.7650 for the near to medium term.

Pound (1.4167) looks stable and can be ranged for now 1.4085-1.42.

USDCNY (6.3922) is hovering around 6.40 and could be ranged within 6.41-6.38 in the near term.

USDINR (72.8050) fell yesterday to test 72.7350, breaking our mentioned 72.80. While 72.70 holds, we may expect a bounce back to 73.00 or higher. On the contrary a break below 72.70, if seen can take the pair down towards 72.50 in the near term. The pair is likely to hover around support of 72.70/80 today as it can be supported by strength in the Chinese Yuan and Euro.

INTEREST RATES

The US Treasury yields remain lower and stable. Inability to rise from current levels can drag them lower towards the lower end of their broader range in the coming days. The German yields have room to fall within its current correction and then can resume the uptrend. The 10Yr GoI can rise in the near-term and then can reverse lower again to keep the broader downtrend intact.

The US 2Yr (0.15%), 5Yr (0.79%), 10Yr (1.56%) and 30Yr (2.24%) Treasury yields remain lower and stable. While below 1.57%, the 10Yr can dip gradually to 1.50%-1.45%. Similarly, the 30Yr can test 2.15% while below 2.25%. 1.45%-1.8% (10Yr) and 2.15%-2.5% (30Yr) are the broad range of trade within which the yields can come down now

The German 2Yr (-0.67%), 5Yr (-0.59%), 10Yr (-0.20%) and the 30Yr (0.35%) yields remain stable within its corrective fall. We retain our view of seeing a test of 0.30%-0.25 (30Yr) and -0.30% (10Yr) on the downside in the coming days. Thereafter a fresh rise is possible to keep the broader uptrend intact and target 0% (10Yr) and 0.55% (30Yr) over the medium-term.

The 10Yr GoI (6.0227%) oscillated around 6.02% yesterday. A test of 6.04%-6.06% on the upside is likely before the yield reverses lower again. The broader trend is down and we will be looking for the yield to break 6% and fall to 5.95% and 5.9% in the coming week.

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Bottleneck in Commodities and Inflation Concerns : 3 May 2021

The recent surge in commodity prices has gotten the attention of not only speculators, but global governments as they worry about the dangers of inflation.

Crude Oil Value Surge: Biden, Supply and Demand

Early this week, President Joe Biden suspended oil drilling rights and explorations in a large part of the US Arctic territory, which will effectively stop new production of crude oil from the region during his presidency and reverses a pro-drilling philosophy that the Trump administration practiced.

Commodity price inflation has become a concern globally. Crude oil, copper, lumber and a host of other physical resources have surged in value. Biden’s suspension of oil drilling in the Arctic underscores the complications and potential for volatility in the energy sector and possible knock-on effects for other commodities.

Restricting drilling and exploration for energy resources in the Arctic may seem negative for supply, but the news was largely anticipated. The decision from the Biden administration was not a surprise to oil companies who had anticipated the Biden policy pronouncements to protect the environment. The price of WTI Crude Oil started to effectively rise in value in September of 2020. When the Biden presidency was won in November, the price of the commodity did rise. It is possible that part of the jump in prices was because institutional players within the energy sector understood the potential for drilling restrictions about to occur. The supply of energy remains abundant in reality.

Lack of Inventory Not Meeting Manufacturing Needs

However, while some people are suggesting that the speculative buying of commodities is being driven by a fear of impending inflation, this can be argued. The surge in commodity prices that is taking place may be because of pent up demand. The need for companies to purchase raw materials to re-engage their manufacturing as the world’s biggest economies emerge from coronavirus must be taken into consideration. While the fears about the Biden administration energy policies may have had an effect on the energy sector, it is likely only one part of the puzzle.

WTI Crude Oil Price Daily Chart June 2020 – June 2021

Values and purchases of commodities have increased not only because speculators are abundant, but because there is a bottleneck of supply. Difficulties meeting demand, due to the fact that many companies which produce raw materials were not working at full capacity the past year due to coronavirus implication, are still being resolved. Solid supply of materials will likely become abundantly available as the bottleneck eases, and users of the physical resources may start to feel comfortable with their inventories. Coronavirus is subsiding in many of the major economies and industry is getting back to normal, but production problems still need to be resolved and this will likely happen.

Gold is an Important Inflation Insight

An important clue regarding the fear of inflation and why it potentially is misguided is because the price of gold has not traded significantly higher.Gold rose in value last summer as financial elements hedged their risks and looked for safe haven assets as coronavirus fears heightened in the US. But were financial institutions buying to guard against actual inflation? Probably not; they were likely doing it as a hedge against the possibility of inflation – and there is a difference.

Gold began to actually sell off and the commodity hit low values in March and early April of this year before starting to climb again.

Gold is a dynamic indication regarding inflation, because historically high net worth individuals and institutional financial houses typically hedge against concerns about real inflation by investing in gold. Gold’s investing formula has not changed. While many certainly speculate on its price to try and capture profits, gold remains largely an important hedge against perceived inflation to come. The price of gold has been rather tranquil recently.

XAU/USD (Gold) Price Daily Chart June 2020 – June 2021

Manufacturing Demand and Inventory Supply

Overall commodity demand for orders will likely become more cautious as manufacturers find that their supply needs are being met. The rampant surge in commodity prices being seen will likely subside and return to stable conditions. There is a rather strong potential commodity inflation may subside. Household prices for food, clothes and other goods have risen. However as the global economy stabilizes and nations and companies begin to return to normal, prices should stabilize too – due to supply and demand.

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Market outlook for stocks, commodities, and Forex on May 14, 2021

Market Morning Briefing: EURJPY Trades Above 132

STOCKS

Dow has managed to recover sharply from its crucial support level of 33500. A range of 33500-35000 is possible while it remains above 33500. DAX has to sustain the strong bounce seen yesterday to bring back the chances of seeing 15700-15800 and delay the fall to 14500. Nikkei has declined sharply below 28000 and is now bearish to see 27000-26000 while it remains below 28500. Shanghai can move up to test the upper end of its 3350-3500 range and then reverse lower again. Sensex and Nifty might see a short-lived bounce but are likely to remain under pressure to see further deeper fall in the coming days.

The crucial support level of 33500 has held very well and the Dow (34021.45, +433.79, +1.29%) has recovered sharply yesterday. While above 33500, a range of 33500-35000 is possible and the broader trend will continue to remain up. A strong break below 33500 is needed to turn the outlook bearish for seeing 33000-32000 and lower levels. The price action in the coming days will need a close watch.

DAX (15199.68, +49.46, +0.33%) fell to test 14800 as expected but had risen back sharply above 15000 again. It will have to be seen if this bounce sustains and see a further rise to 15400 to bring back the chances of seeing 15700-15800 into the picture. Such a rise will reduce the danger of seeing a deeper fall to 14500. We will have to wait and watch.

Shanghai (3449.91, +20.37, +0.59%) is getting intermediate support at 3420 over the last couple of days. This keeps the chances high of testing 3475-3500 on the upside in the near-term. We expect Shanghai to reverse lower again thereafter and retain the 3350-3500 range.

COMMODITIES

The spread of corona virus especially in South Asian countries are leading to fresh lock down restrictions dampening the oil demand and putting pressure on the oil prices in addition to the news of reopening of the Colonial pipeline after it was temporarily halted last week due to cyber attack. Bothe Brent and WTI trade lower and need to bounce from supports near 66-5.75 and 62.50 respectively. Gold may test 1800 and Silver could fall to 27-26.5 before bouncing back from there. Copper has support at 4.60.

Brent (66.69) and WTI (63.53) have dipped sharply maintaining the respective resistances of $70 and $67. While the fall is in place, we may expect a test of 66-65.75 and 62.50 respectively from where a bounce could be possible. Overall broad range of 66-70 for Brent and 62.50-67 for WTI may hold for the near term.

Gold (1823) has scope for a dip to 1800 from where a bounce back to 1860 could be possible in the medium term. Immediate view is to see continued dip while US Dollar rises.

Silver (27.07) has dipped back to test support near 27.0-26.5 and may expect a bounce from there. Failure to hold above 26.50 could drag the price lower towards 26 or even 25 in the medium term. Watch price action near immediate support.

FOREX

Dollar Index is stable near 90.75/80 levels that keeps Euro below 1.21. A bounce from 1.2050 could be possible in the near term. EURJPY looks bullish towards 135. Dollar Yen may rise to test 10. USDCNY and USDINR also could rise towards 6.50 and 73.60 respectively. Aussie and Pound looks bearish on the other hand and could be headed towards 0.77 and 1.39 respectively.

Dollar Index (90.75) has paused at higher levels. Any correction seen from here could be limited to 90.50 before a rise again towards 91+ levels is seen. Overall the index is bullish towards 91.50 in the near term.

Euro (1.2079) has fallen on Dollar strength. While above 1.2050-1.20, we may expect a bounce back soon towards 1.21+ again.

EURJPY (132.39) trades above 132 and could eventually move up towards 135 in the longer run. View is bullish on the cross.

Dollar-Yen (109.60) is trading higher after seeing a short corrective dip yesterday. A rise to 110 looks possible in the near term.

Aussie (0.7722) has broken below the lower end of the 0.78-0.7750 range mentioned on Wednesday. A sustained break below 0.77 could make it vulnerable to a fall towards 0.76 eventually. Watch price action near 0.77 in the near term.

Pound (1.4039) tested 1.40 yesterday and trades slightly higher today. If the Dollar continues to strengthen, we may expect a gradual break below 1.40 that could extend the fall towards 1.38.

USDCNY (6.4545) has risen as expected and could continue to move up towards 6.50 in the near term.

INTEREST RATES

The US Treasury yields have moved up sharply over the last couple of days on the back of strong US inflation data. The outlook is bullish to see further rise in the coming days. The danger of breaking below their crucial supports that we had cautioned earlier stands negated now. The German yields are bullish after having broken their crucial resistances. The yields can move up in the coming days. The 10Yr GoI looks mixed within its overall downtrend. There are chances for it to resume the downtrend without seeing the corrective rise that we have been expecting for some time.

The US 2Yr (0.16%) Treasury yield remains stable while the 5Yr (0.83%), 10Yr (1.66%) and 30Yr (2.40%) have moved up further over the last couple of days. The chances are high for the yields to revisit 1.8% (10Yr) and 2.5% (30Yr) in the coming weeks. A break above 1.7% (10Yr) and 2.4% (30Yr) can accelerate the rally. As mentioned on Wednesday, the chances of breaking below 1. 45% (10Yr) and 2.15% (30Yr) is reduced now..

The German 2Yr (-0.67%), 5Yr (-0.51), 10Yr (-0.12%) and the 30Yr (0.42%) yields have moved up further and are retaining their strength. The outlook is bullish as the 10Yr and 30Yr are sustaining well above -0.20% (10Yr) and 0.35% respectively. A rise to 0% (10Yr) and 0.55% (30Yr) can be seen in the coming days. As mentioned on Wednesday, our earlier view of seeing a fall to -0.45% (10Yr) and 0.20% (30Yr) stands negated.

The 10Yr GoI (6.0092%) has to break above 6.02% decisively to see the corrective rise to 6.04%-6.06% and even 6.10%. While below 6.02% a dip to 5.96% can be seen again and it will also keep alive the chances of falling to 5.9% from here itself without seeing a corrective rise.

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What is the market outlook for stocks, commodities, and Forex on May 11, 2021?

Market Morning Briefing: Aussie Is Stable And Could Rise Towards Resistance Near 0.80-0.79

STOCKS

Asians are trading sharply lower. Nikkei has tumbled below 29000 contrary to our expectation of rising to 30500. It can test 28500-28000 on the downside while below 28000. Shanghai is heading down towards the lower end of its 3350-3500 range as expected. Sensex and Nifty may hold below 50500 and 15000-15100 respectively and can reverse lower today on the back of the sell-off in the Asian equities. Dow has failed to sustain the break above 35000 and has come-off sharply. A dip to 34000 is possible while below 35000. DAX will have to sustain above 15200 to keep alive the chances of seeing 15700-15800 on the upside before reversing lower.

Dow (34742.82, −34.94, -0.10%) rose to 35000 as expected but had come-off sharply from the high of 35091.56. While below 35000, a dip to 34000 is possible in the near-term. 34000 and 33500 are important supports which will have to be broken to turn the outlook bearish. While above these supports, the bullish view of seeing 3550 and even 36000 will remain intact.

DAX (15400.41, +0.76, 0%) remained stable and higher yesterday. The near-term view is bullish to see a test of 15700-15800 on the upside. Thereafter a reversal is possible. 15250-15200 can be a good support zone now.

Shanghai (3395.92, −32.07, -0.94%) has declined below 3400 and keeps intact our view of seeing a fall to 3350 – the lower end of its current 3350-3500 range. Crucial support is in the 3350-3325 region and the price action here will need a close watch. Inability to bounce-back from this support zone can keep Shanghai vulnerable to see a deeper fall to 3250-3200 over the medium-term.

COMMODITIES

Overall commodity prices have dipped today except for Gold which seems to maintain trade at higher levels. Crude prices trade lower today while holding below immediate resistance levels. Silver and Copper have dipped too but could soon bounce back to higher levels while above initial support near 27 and 4.60 respectively.

Brent (67.83) and WTI (64.47) have dipped from 69.2 and 65.75 respectively seen yesterday. This is in line with resistances of $70 and $67 holding for now but note that the dip may not last long as repeated attempts to break the resistance may pave way for further upmove in the coming weeks. We would continue to look at important near term resistance levels to see if they manage to hold or pave way for further upside.

Gold (1837.30) continues to trade higher today despite weakness seen in other commodity prices. Gold is likely to hold on and rise towards 1860 while above 1820/30. Near term view is sideways to bullish.

Silver (27.41) has dipped slightly. A test of immediate support near 27 is possible before the price again moves up targeting 28-29 in the longer run.

Copper (4.7315) has dipped as expected yesterday and could have scope to fall to 4.60 or even to 4.40 before a rally towards 4.95/5.00 is seen in the longer run.

FOREX

Dollar Index looks stable while Euro has fallen a bit. While above 1.21, Euro still has scope for a rise to 1.22. EURJPY may rise towards 135 while above 132. Dollar Yen may keep the range of 108-110 intact while above 108. Aussie and Pound look bullish for a rise to 0.79 and 1.42 respectively. USDCNY may rise from 6.42/40 which is a crucial long term support. USDINR may test 73.25/00 while below immediate resistance near 73.60.

Dollar Index (90.2320) hcontinues to trade lower and could test support near 90. This is crucial and if the index does not manage to rise from 90, it can fall to 89 in the near term. Watch price action near 90 just now.

Euro (1.2143) has dipped slightly from levels seen yesterday but a possible rise towards 1.22-1.2240 in the near term cannot be negated. Note that 1.22-1.2240 is a crucial resistance zone which if holds could make Euro bearish for the medium term; else a sharp break above 1.2240 would be needed for further upmove which may come in only if the Dollar Index breaks below 90.

EURJPY (132.23) has remains stable at higher levels and while above 132, there is scope for a further rise to 135 in the medium term. View is bullish while above 132.

Dollar-Yen (108.87) is stable near levels seen yesterday. While above 108, we may expect ranged movement within 108-110.

Aussie (0.7842) is stable and could rise towards resistance near 0.80-0.79. A broad sideways range of 0.76-0.80 may hold on for the next few weeks.

Pound (1.4127) has risen well and could test 1.42 on the upside. Near term looks bullish while above 1.40.

USDCNY (6.4219) has fallen further and could re-test crucial long term support near 6.42/40. Unless it sustains and bounces back from 6.40/42 it could be vulnerable to break the support coming from Apr’13 near 6.40. That if happens will be very crucial. Watch price action near 6.40/42 for a bounce.

INTEREST RATES

The US Treasury yields sustain higher. It will have to be seen if it can gain momentum and move up from here to negate the danger of falling below their crucial supports. The German yields continue to hover near their crucial resistances. Inability to break the resistances can trigger a fall in the coming weeks. The 10Yr GoI keeps alive the chances of seeing a corrective fall in the near-term before resuming its overall downtrend.

The US 2Yr (0.15%), 5Yr (0.77%), 10Yr (1.59%) and 30Yr (2.31%) Treasury yields sustain higher and stable. A further rise from here will reduce the danger of the yields falling below 1.45% (10Yr) and 2.15% (30Yr). A strong rise past 1.7% (10Yr) and 2.4% (30Yr) will completely negate it and will bring back the bullish momentum to see 1.8% (10Yr) and 2.5% (30Yr) on the upside.

The German 2Yr (-0.70%), 5Yr (-0.59), 10Yr (-0.21%) and the 30Yr (0.35%) yields continue to hover near their crucial resistances. -0.20% (10Yr) and 0.35% (30Yr) are the important resistances that will have to be broken to move up further from here and avoid a fall back to -0.45% (10Yr) and 0.20% (30Yr).

The 10Yr GoI (6.0135%) sustains above 6% and remains stable. This keeps alive the chances of seeing a corrective rise to 6.04%-6.06% and even 6.10% first. Thereafter the overall downtrend can resume targeting 5.9% on the downside.

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Market outlook for stocks, commodities, and forex on May 3,2021?

Market Morning Briefing: EURJPY Came Off Slightly

STOCKS

Dow continues to remain mixed around 34000. A sustained rise above 34000 is needed to avoid a fall below 33500. DAX remains below 15200 and can turn bearish on a break below 15000. Nikkei and Shanghai can fall within their sideways range this week. Both Nikkei and Shanghai are closed till Wednesday. Sensex and Nifty have declined sharply on Friday and can extend the fall this week. Overall equities are not showing any strong sign of seeing a sharp rise from here. As such we would remain cautious.

Dow (33874.85, −185.51, -0.54%) continues to oscillate up and down around 34000 over the last couple of weeks. The near-term outlook is mixed. A strong follow-through rise is needed to move up to 35000. On the downside, 33500 is an important support. A break below it and a subsequent fall below 33000 will turn the outlook bearish to see 32000-31000 on the downside.

DAX (15135.91, −18.29, -0.12%) hovers around 15200. As mentioned on Friday, a break below 15000 from here can trigger the fall to 14500-14000 that we have been mentioning for some time. It will also negate the chances of seeing 15500-15700 on the upside.

Shanghai (3446.86, −28.04, -0.81%) retains its 3350-3500 range and can fall towards the lower end of this range in the coming days. The Chinese markets are also closed till Wednesday.

COMMODITIES

Commodities are almost stable. Crude prices are ranged within narrow ranges while Gold and Silver sustain above immediate support levels and could head higher in the near term. Copper may test 4.40 before bouncing back from there.

Brent (66.61) and WTI (63.48) continue to be ranged within 64-68 and 61-65 respectively and may bounce from lower end of the mentioned range soon. Overall the prices look sideways ranged for the near term.

Gold (1772.90) has risen indicating that it may remain above 1760 for now and attempt a bounce back towards 1780-1800 eventually. We may expect a broad range of 1760-1800 to hold for now. Silver (26.01) on the other hand has risen above 26 again and while that sustains, it may rise further towards 26.50-27.00 in the near to medium term. Overall broad range of 25-27 may continue to hold in Silver for some more time.

FOREX

Dollar Index has bounced from crucial support at 90.50 and could now be headed higher towards 92, dragging down Euro towards 1.19 or even lower in the medium term. EURJPY may remain stable for now and fall towards 131.50 before bouncing back from there. USDJPY looks bullish towards 109.72-110. Aussie looks bearish towards 0.7645 before a bounce is seen from there while Pound could be headed lower too while below 1.40. USDCNY may move up from current levels towards 6.48/50. USDINR needs to hold above support at 73.90 to head higher towards 74.20/30.

Dollar Index (91.318) bounced back sharply from crucial support at 90.50 that we had been mentioning over the last few weeks. The rise could take the index to higher levels of 92 again in the near term.

Euro (1.2020) has fallen from important trend resistance at 1.2150 ad while that holds, view is bearish for a fall towards 1.20 or lower towards 1.19. View is bearish for Euro.

EURJPY (131.65) came off slightly. A brief fall to 131.5 could be possible before the cross rises sharply towards 135 in the longer run.

Dollar-Yen (109.49) rose the whole of last week and could test 109.72-110 on the upside before again coming off from there back towards 109 or lower. Immediate view is bullish.

Aussie (0.7718) has dipped well and could test 0.7645 before again rising back from there. Immediate view is bearish.

Pound (1.3819) trades below 1.40 and while the Pound is unable to break above 1.40, we may expect sideways trade within 1.40-1.38/37 in the medium term.

USDCNY (6.4730) has been stable at lower levels and while above 6.46, it may continue to rise towards 6.50 and higher soon.

INTEREST RATES

The US Treasury yields have been moving up from near their crucial supports. This keeps the broader uptrend intact and keeps the chances high of seeing further rise going forward. The yields will have to decline below their support to indicate a trend reversal. The German Yields are hovering at their crucial resistance and can fall-back. The price action in the coming days will need a close watch. The 10Yr GoI remains stable within its overall downtrend. The outlook is bearish and the 10Yr GoI has room to fall further from current levels.

The US 2Yr (0.16%) and 5Yr (0.85%), 10Yr (1.63%) and 30Yr (2.30%) remains stable. The 10Yr and 30Yr have risen back from near their crucial support levels of 1.50% and 2.20%. This keeps the overall uptrend intact. The chances of a strong rise to 1.8% and 2.5% again cannot be ruled out in the coming weeks. The yields have to break below 1.5% (10Yr) and 2.2% (30Yr) in order to indicate a trend reversal and become bearish.

The German 2Yr (-0.70%), 5Yr (-0.58), 10Yr (-0.20%) and the 30Yr (0.35%) yields hover at their crucial resistance levels of -0.20% (10Yr) and 0.35% (30Yr). A pull-back from here can drag the yields lower to -0.45% (10Yr) and 0.20% (30Yr). The price action in the coming days will need a close watch if the yields manage to rise past these hurdles and move up further to negate the above mentioned fall.

The 10Yr GoI (6.0565%) continues to trade stable. While below 6.08%, the yield can test 6% on the downside in the near-term. A corrective bounce from 6% to 6.10%-6.12% cannot be ruled out before the broader downtrend extends towards 5.9%.

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What is the market OUTLOOK for STOCKS, COMMODITIES, AND FOREX: 28 April 2021?

Market Morning Outlook: Euro Has Dipped Below 1.21 And Trades Lower

STOCKS

Equities continue to trade mixed and are struggling to find a direction. Dow is stuck around 34000 and DAX hovers above 15200. Nikkei is stable within its 28000-31000 range. Shanghai can fall within its 3350-3500 range. Sensex and Nifty have come up towards the upper end of their 47000-49000 and 14150-14700 range and need to see if they can break this range on the upside or not today.

Dow (33984.93, +3.36, +0.01%) is stuck around 34000. We repeat that a strong follow-through rise above 34000 is necessarily needed to move up to 35000. Important support is at 33500. A break below it will reduce the chances of seeing 35000 on the upside. A subsequent fall below 33000 will then turn the outlook bearish for seeing 32000-31000 on the downside.

DAX (15249.27, −47.07, -0.31%) remains stable above 15200 and continues to lack momentum. We expect 15500 and 15700 to cap the upside from here. DAX is likely to break below 15000 and fall to 14500-14000 eventually in the coming weeks.

Shanghai (3448.02, +5.41, +0.16%) is getting support near 3425 and is attempting to bounce. This could be short-lived. We expect Shanghai to fall to the lower end of its 3350-3500 range in the coming days.

COMMODITIES

OPEC+ cancelled the meeting scheduled for today and have announced that it is to continue tapering of oil production with an increase of 350.000 b/d and an additional 350,000 b/d by Saudi Arabia. Crude prices have risen slightly but overall remain ranged within the narrow 68-64 region in Brent and 65-60 region in WTI. Gold and Silver have dipped slightly and may continue to trade lower for a few sessions before a sharp bounce is seen. Copper has declined sharply but while above 4.30/40, there is still scope for a bounce back towards 4.60 in the medium term.

Brent (66.33) and WTI (62.86) have risen slightly and could remain within the range of 70/68-64 and 67/65-60 respectively. While Brent holds above 65, it has scope for a rise to 70. Similarly, while WTI trades above 60, there is scope for a rise to 65-67.

Gold (1771.80 looks stable after falling for the last few sessions. It is important for the price to remain above 1760 to keep alive hopes for a bounce back to 1800-1820 in the medium term.

Silver (26.10) has dipped a bit and could test 26.0-25.75 before again attempting to bounce back.

Copper (4.4360) has dipped from levels seen yesterday and the fall could be a short corrective one before resuming the upward rally towards 4.60 in the medium term. Immediate support can be seen in the 4.40/30 region.

FOREX

Dollar Index looks stable while Euro may trade below 1.21 for sometime. EURJPY has risen sharply and if it manages to sustain above 131, we may look for fresh targets of 132-135 in the longer run. Pound and Aussie look bearish towards 1.38-1.37 and 0.77-0.7680 in the near term. USDCNY looks ranged within 6.48-6.50 for now while USDJPY has risen well and needs to sustain below 109 to fall back towards 107; else a rise to 109.75 cannot be ruled out. USDINR may hold within 74.40-74.80 today. A break below 74.40, if seen may take it down to 74.25. Resistances are seen at 74.85 and 75.10.

Dollar Index (90.99) holds stable and is likely to rise to 91.30/50 in the near term before again falling back towards 90.50 or lower. Note that while above 9050, we may expect a ranged movement between 90.50-91.50 for some time.

Euro (1.2078) has risen slightly but while below 1.21, there could be a short corrective dip towards 1.2048 before it attempts a bounce back to higher levels.

EURJPY (131.50) has finally rise breaking above the 129-131 range and signals initial signs of a sharp rally towards 132-135 in the longer run. Watch if the cross manages to sustain above 131 in order to continue moving up.

Dollar-Yen (108.88) has bounced back well. It should face rejection from 109 I order to resume its fall towards 107 or lower. Failure to face rejection from 109 will take it higher towards 109.75 again in the medium term.

Aussie (0.7739) has dipped and may continue to fall towards 0.77-0.7680 in the near term before bouncing back from there again. Immediate view is bearish.

Pound (1.3875) looks stable just now. It is likely to hold below 1.40 and may fall towards 1.38-1.37 eventually. View is bearish while below 1.40.

USDCNY (6.4874) is ranged just now. The pair has scope for a rise towards 6.50/52 while downside could be limited to 6.46 in the near term.

USDINR (74.6550) bounced back after testing 74.50 yesterday. While below 74.70, there is scope for a test of 74.40. Resistances are seen at 74.85 and 75.10 respectively. We may look for a range of 74.40-74.70/80 to hold for the day. Only a break below 74.40, if seen will trigger a fall towards 74.25. Watch price action at 74.40.

INTEREST RATES

The US Treasury yields have risen back sharply across tenors ahead of the US Federal Reserve meeting tonight. The crucial supports have held very well and keep the overall uptrend intact. It will have to be seen if the outcome of the Fed meeting provides a fresh trigger for the yields to move up further from here. The German Yields continue to trade stable and are keeping the bullish view intact. The 10Yr GoI has bounced but can face resistance ahead and fall-back again to keep the overall bearish view intact.

The US 2Yr (0.18%) Treasury yield remains stable while the 5Yr (0.88%), 10Yr (1.62%) and 30Yr (2.29%) have risen sharply. The support 1.5% (10Yr) and 2.2% (30Yr) seems to be holding well. As mentioned earlier, while above these supports, the uptrend will remain intact and the yields can rise back to 1.8% (10Yr) and 2.5% (30Yr) in the coming weeks. The danger of breaking these supports and falling to 1.2% (10Yr) and 2% (30Yr) that we were cautioning over the last few days stands reduced now.

The German 2Yr (-0.70%), 5Yr (-0.60), 10Yr (-0.25%) and the 30Yr (0.29%) yields continue to remain higher and stable. We retain our bullish view of seeing a break above -0.25% (10Yr) and 0.30% (30Yr) and a rise to -0.20%/-0.15% (10Yr) and 0.35% (30Yr) in the coming weeks. Thereafter the yields can fall back. To negate the above mentioned rise, the yields will have to fall below -0.35% (10Yr) and 0.20% (30Yr).

The 10Yr GoI (6.0544%) has bounced yesterday but might face resistance at 6.08% and fall back again. Our bearish view remains intact to test 6% initially and then 5.90% eventually in the coming weeks.

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