STOCKS
Dow and Dax looks bullish. Shanghai could see some more dips or remain stable. Nikkei is at important support levels and a bounce or break on either side would decide further direction. Nifty is at crucial levels; need to see if t sustains above 11500 or comes off from there.
Dow (25758.69, +0.35%) and Dax (12331.30, +0.99%) have both moved up and closed just above immediate resistances on the daily candles. If Dow sustains above 25750 and Dax remains above 12300, the indices could move up in the near term towards 12600/650 and 12500 respectively. 3-day candle support on Dax is holding just now.
Nikkei (22182.21, -0.076%) has come down and could test support near 22000 in the near term. If the index manages to hold above 22000, it could move up towards 22400 and higher in the medium term. In case a break below 22000 is seen, it could indicate bearishness towards 21800-21600 levels going forward.
Shanghai (2724.91, +0.98%) tested an intra-day low of 2653 today coming down to our initial important support. While 2650 holds, the 2750-2800 in the coming sessions but a break below 2650, if seen could make it vulnerable to further downside towards 2600 or even lower in the longer run.
Nifty (11551.75%) could trade along the weekly trend resistance and gradually move up towards 11600-11800 in the near term. We would also remain cautious whether the index remains above 11500 for the next few sessions or comes off below 11500 again as that could indicate lack of strong upside momentum just now.
COMMODITIES
Gold and Copper have risen slightly but have resistances above current levels which could limit strong upside. Crude could trade sideways.
Nymex WTI (65.52) and Brent (72.21) have risen from levels seen yesterday. But the resistance near 66.50-67.00 on WTI is important and if that holds, price could come down to re-test 65-64 levels in the near term. Brent on the other hand could see some consolidation in the 73-71 region. A break on either side would give some cues on further direction.
Gold (1200.30) has managed to rise and test 1200. Immediate resistance is seen at 1210. A rise past 1210 is needed to take the price back towards 1225-1230 and even higher in the longer run. There is some hope for bullishness while above 1200.
Copper (2.6735) has moved up slightly. As mentioned yesterday, there is trend resistance near 2.70. If 2.70 holds, we could see another downleg back to 2.65-2.60 else Copper could move up to 2.80+ levels in the medium term.
FOREX
Dollar Index (95.55) has been coming down in the last 3-4 sessions after testing 97 on the upside. The index is in a very near term channel and could come down further to test support near 95.00-94.50 levels in the near term. Also note there is initial support at 95.50 which if holds just now could prevent further fall below 95.50 and instead take the index back to higher levels. See this support at 95.50 on the 3-day charts.
Euro (1.1518) has moved up sharply on weakness in Dollar. It is yet to test the upper resistance of 1.1550 mentioned yesterday and while below 1.1550, there could be chances of a near term dip; else a rise towards 1.1600-1.1625 looks possible.
Dollar Yen (110.00) is trading at support levels just now. A break below 110 could make it vulnerable for a further fall towards 109.30. The weekly chart looks strongly bearish just now. Also keep an eye on immediate support at 22000 on Nikkei which if holds could possibly pull up Dollar Yen also from current levels. 109.50-109.30 is an important support zone for the near term.
Euro Yen (126.73) has support at 124 and earlier support turned resistance at 127 on the weekly chart. If 127 holds, we could see a fall to 124 in the near term.
Pound (1.2824) has risen above 1.28 and while that sustains some more upside towards maximum of 1.290-1.295 is possible. Looking at the 3-day and weekly chart, medium term looks bearish with possible downside towards 1.26 and lower.
Dollar Rupee (69.83) has a possibility of coming down towards 69.50 in the near term. For upside while below 70.10, we could negate any fresh weakness in the Rupee.
INTEREST RATES
Quite a dip in the US 10yr (2.83%) from 2.86% on Friday, bringing it towards the lower end of the projected 2.82-90% range. The 30Yr (2.99%) has dipped below 3.00%, but has an important Support near current level, which can produce a bounce back up towards 3.10%+ while it holds. This suggests that the US 10Yr too might remain in the projected 2.82-90% range, at least till the FOMC Minutes on Wednesday.
Of course, if the Support at 2.99-97% breaks on the 30Yr, we could be looking at a totally different scenario for US bonds. There are already murmurs in the market that the FED could be close to the end of tightening.
German yields are steady at -0.28% (5Yr), 0.30% (10yr) and 0.96% (30yr). However, very importantly, the German-US 2Yr Spread (-3.23%) seems to have bottomed at -3.28% and is rising. The German-US 10Yr Spread (-2.53%) also seems to be breaking its downtrend. They seem to have helped the Euro (1.1518) climb past 1.1500.
The Japanese 30Yr (0.84%) still remains below Resistance for now. We will be watching to see if it breaks higher or not.
The Indian 10Yr GOI (7.8377%) has been moving up from 7.70% since the beginning of the month but has important and possibly strong Resistance coming up at 7.90%. Likely to hold.
