STOCKS
Overall the major indices are trading higher and look potentially strong for the week.
Dow (20412.16, +0.70%) has broken above the 20400 levels without seeing any rejection yet. The bulls look strong and if it maintains above 20400, it could move up towards 20600 or even higher in the near term. A rejection from either 20600 or 20800 is possible in the middle term while the index remains above 20400.
Dax (11774.43, +0.92%) also moved up but could not break above 11820 yesterday. We may see a test of 11820-11930 region in the next few sessions before coming off again.
Nikkei (19431.46, -0.14%) is trading a little lower today. Resistance near 19620 may hold good in the near term bringing back the index towards 19260 or lower. Overall the broad 19000-19620 region could be the band for the next few sessions.
Shanghai (3213.19, -0.10%) looks positive and while above 3200, it can continue the rally towards 3300 in the near term.
Nifty (8805.05, +0.13%) could test 8900-8970 levels in the near term before a corrective dip is seen. Immediate trend is up.
COMMODITIES
Gold (1226.46) has weakened a bit due to a firm Dollar (100.97) but the medium term uptrend remains intact as long as the major support of 1205-1200 holds. This week may see a continued sideways consolidation un the range of 1220-50.
Silver (17.85) is stalling near the resistance of 18.00-10 as expected but near term weakness would be confirmed only on a break below 17.50. Till then, it can oscillate in the narrowing range of 17.50-18.10.
Both Brent (55.78) and WTI (53.08) have suffered rejection at the higher end of their respective ranges as expected which keep the medium term broader ranges of 53-58 and 50-55 intact. This sideways consolidation may continue for the rest of the week.
Copper (2.79) is consolidating the sharp gains made this week but to keep the bullish momentum intact and higher targets of 2.90-95 open, it must hold above the interim support of 2.75
FOREX
The January Consumer Inflation expectations in US has hit a 19-month high, keeping the Dollar firm against the other majors but the Fed chair Yellen’s Congressional testimony tonight may be the near term decider.
Dollar Index (100.99) is sustaining the higher levels as no rejection is visible from the resistance of 101.00. The chances of further rise to 101.75-102.00 have increased now but the near term path may depend on the Yellen testimony tonight.
Euro (1.0598) is trading near an interim support at 1.0590 but may decline further to test 1.0530-00 levels depending on the Yellen testimony.
Dollar-Yen (113.72) has been holding above the support of 113.50 but needs a break above the minor resistance of 114.30 to extend the rise to 115-116.
Pound (1.2523) keeps oscillating in the range of 1.2350-1.2700 which may continue for the rest of the week. From a larger perspective, it must be noted that any Brexit related issues are not impacting the currency that much.
Aussie (0.7672) is stuck in a contracting range of 0.76-0.77 for the 9th session but may break out of the range soon enough. Repeat – while the trend is still up, the proximity of the major resistance near 0.7750-0.7800 warrants caution as the chances of a sudden reversal can’t be ruled out.
Dollar Rupee (67.01) is trading sideways in the range of 66.80-67.07, keeping the bias neutral. Only a break on either side of the 66.80-67.07 range may give immediate direction clarity.
INTEREST RATES
The US yields have risen slightly. The 5Yr (1.93%), 10YR (2.45%) and the 30YR (3.04%) are higher from previous levels of 1.91%, 2.43% and 3.03% respectively. The 30Yr and the 10Yr yield is headed towards 3.1% and 2.50-2.75% respectively in the near term.
The Japanese 30YR (0.85%) yield has risen slightly and could head towards 0.9% in the near term.
The UK yields are also trading higher. The 5Yr (0.48%), 10Yr (1.39%) and the 20YR (1.87%) are all higher from previous levels of 0.45%, 1.34% and 1.83% respectively.
