Daily forecasts on global Stocks, Commodity, Forex and Interest Rates markets
04 Nov 19. 0900 IST or 0330 GMT or 2230 EST

STOCKS

The increase in the US non-farm payroll by 128K as against the market expectation for a rise of 90K has given a boost to the US equities. The Dow is heading closer to a crucial resistance which will need a close watch. DAX consolidated within its overall uptrend. Shanghai is bouncing from a key support and needs to be seen if it can gain strength. Sensex and Nifty seems to lack fresh momentum and looks vulnerable to see an intermediate dip within its overall uptrend. Nikkei is closed today.

Dow (27347.36, +301.13, +1.11%) has risen past 27250 which can now act as a good support. While above 27250, a further rise to 27500-27600 is possible in the near-term. What happens after 27600 will be crucial in deciding whether the Dow will go up further to 28000 or fall back to 27000 and lower. We will have to wait and watch.

DAX (12961.05, +94.26, +0.73%) continues to oscillate in a narrow range below 13000. The broader view remains bullish. However, a strong rise past 13000 is needed to strengthen the upmove and take it higher towards 13200 and 13500.

Shanghai (2972.07, +13.87, +0.47%) is getting support near 2915 and is managing to hold higher after bouncing sharply on Friday. 2980-2985 is a key near-term resistance which has to be broken for the downside pressure to ease and move further higher towards 3000 in the coming days.

Nifty (11890.60, +13.15, +0.11%) has closed on an indecisive note on It has to make a strong close above 11900 to keep up the momentum and rise to 12200 levels in the coming days. While below 11900, an intermediate dip to 11800-11700 cannot be ruled out before the above mentioned upmove happens.

Similarly, Sensex (40165.03, +35.98, +0.09%) has to rise past 40250 decisively in order to gain fresh momentum to target 41000 and higher levels in the coming weeks. While below 40250, an intermediate corrective dip to 39750-39600 is possible.

COMMODITIES

Commodities have risen from near term supports. It would be important to see if crude prices manage to rise above respective resistances above current levels to sustain the sharp rise seen on Friday. Gold and Silver look bullish for the near term. Copper also has room on the upside.

Gold (1514.90) is holding above important support at 1500 and has potential to rise towards 1540 in the near term before dipping back towards 1500. However, we would watch price action near 1520 (interim resistance)

Silver (18.11) is likely to test 18.5 in the near term. Important trend support on the 3day candles seem to be holding well.

Copper (2.6585) has held well above Weekly MA support and while that holds, the price could see some upmove towards 2.75/80 in the medium term. Only on a sustained fall below 2.6250, we would negate a rise towards 2.75/80 (less likely while support holds).

Crude prices have moved up. Brent (61.36) rose back sharply from levels just above 59. Immediate trade range could be seen between 63 and 59. A sustained break on either side will decide further direction for the medium term. Similarly, WTI (55.93) has also risen sharply from 54 and could test 57 on the upside. 54-57 could be the trade range for the near term. Our preference would be an eventual fall below respective supports. We might have to wait for a few more sessions for confirmation from price movement.

FOREX

Disappointing US ISM manufacturing data and a good NFP lead to a short rise in dollar Index, but the index (97.18) has again fallen to trade lower. There is room to test support near 97-96.89 as suggested on Friday. Immediate view is bearish while below daily trend resistance at 97.50.

Euro (1.1170) could test 1.11795 on the upside today and has potential to test 1.12 from where a pullback is expected. Watch price action on Euro above current levels.

Dollar-Yen (108.22) is rising from important support at 108 and while that holds, there is scope of seeing a rise towards 109.50 in the near term. Immediate view is likely to be bullish while above 108.

EUR-JPY (120.88) has been stuck in the sideways range of 120.5-121.5 region for the past few sessions and could eventually come off below 120.5 in the near term targeting 120-119.5.

Pound (1.2940) has not broken above the psychological levels of 1.30. But at the same time the currency has not been able to fall sharply from 1.30 and pose repeated attempts back towards 1.30. If this continues, the price may move up sharply breaking 1.30 on the upside soon. Although our preference would be to see a fall from here, we do not negate a possibility of a sharp upmove above 1.30.

Aussie (0.6921) has risen from support near 0.6875 on the daily candles and while that holds, it could test long term resistance at 0.6950 before coming off from there. Only on a sustained rise above 0.6950, if seen would indicate fresh upwards rally (less likely while 0.6950 holds).

The USDCNY (7.0237) has moved down on optimism of US-China deal. There is support at current levels and while that holds, a bounce back towards 7.06/08 could be expected. However, we would be cautious of seeing a fall below 7 in the next few sessions.

Dollar-Rupee (70.82) is likely to re-test 70.75/70 today. But while above 70.70, we have scope for seeing a rise towards 71.06/08-71.25 on the upside. A fall below 70.70 should be seen and sustained to negate a rise towards 71.25 (looks less likely on the charts as support near 70.70 looks strong just now)

INTEREST RATES

The US Treasury yields have declined across tenors last week as their key resistances have hed very well. They have room to fall further in the coming days. The German Yields at the far end can consolidate in the near term while those at the near-end can dip before resuming their overall uptrend. The Indian 10Yr (07.26 GS 2029) has a key support which is likely to hold and push it higher in the coming days.

The US 2Yr (1.55), 5Yr (1.54%), 10Yr (1.71%) and 30Yr (2.19%) Treasury yields have come-off across tenors in the past week thereby negating our earlier bullish view. As mentioned on Friday, the yields can fall further in the coming days. The 10Yr can test 1.60%-1.55% on the downside while the 30Yr can fall to 2.10%-2.05%.

The German 10Yr (-0.39%) and 30Yr (0.14%) yields are consolidating sideways within their overall uptrend. The can remain in the range of 0.075-0.17 (30Yr) and -0.41- -0.35 (10Yr) for some more time before the uptrend resumes. On the near-end the 2Yr and 10Yr have room to test -0.70% and -0.65% respectively in the near-term after which the uptrend can resume.

The 10Yr (07.26 GS 2029) GOI (6.6632%) has key support at 6.60% which is likely to hold and push the yield higher towards 6.70% and 6.80% in the short term.

The 10Yr (06.45 GS 2029) GOI has closed lower at 6.4498% on Friday as compared to 6.4516% on Thursday.

Author: Kshitij Consultancy Service
Website: http://www.kshitij.com
Kshitij Consultancy Service