STOCKS
Global indices remains mixed. Dow is struggling to breach a key resistance and can fall if it fails to break it. DAX, Nikkei and Shanghai looks to remain range bound. The rally in the Indian indices seems to have paused. Sensex and Nifty can witness a dip in the near term before resuming the overall uptrend.
Dow Jones (25,709.94, +7.05, +0.03%) seems to be not getting strong and fresh buyers to take it beyond the 21-day moving average resistance level of 25,786. A strong break above this resistance is needed for the index to move higher to 26,000 and 26,150 levels again. But, while below 25,786, a fall breaking below the support at 25,500 targeting 25,100 cannot be ruled out in the near term.
DAX (11,587.47, +15.06, +0.13%), as mentioned yesterday can remain range bound between 11,400 and 11,650 for some time. The bias within this range is bullish and the index is likely to break the range above 11,650 eventually and target 11,800.
Nikkei (21,504.73, +217.71, +1.02%), though has been volatile over the last few days, is managing to hold above the 100-day moving average support at 21,297. A break below this support will bring renewed pressure and drag the index to 21,000. But while Nikkei sustains above the 100-day moving average, a test o 21,600 is possible.
Shanghai (3,042.77, +52.09, +1.74%) fell to test 2970 as expected yesterday and has reversed sharply today. A sideways consolidation in a sideways range between 2950 and 3100 within which a rise to 3050 and 3070 is possible while it sustains above 3000.
Sensex (37,754.89, +2.72, +0.01%) and Nifty 50 (11,343.25, +1.55, 0.01% ) have closed on a flat note yesterday. An intermediate dip to test the supports at 11,300 on the Nifty and 37,600 on Sensex looks likely. If Sensex and Nifty declines below these supports, then the downmove can extend to 37,250-37,150 (Sensex) and 11,225-11,200 (Nifty).
COMMODITIES
Gold, Silver and Copper witnessed a sharp fall yesterday. While gold has room to dip further, silver and copper has key support near current levels. Oil looks mixed. While Brent has come-off from a key resistance and can dip further, WTI is managing to hold above a key support.
Gold (1294) and Silver (15.20) fell in line with our expectation. However, the quantum of fall in both were much deeper than what we had anticipated. While below 1300, gold can revisit of 1290 and 1280 levels in the near term. Silver on the other hand, has a key support at 15.10. While it hold, a bounce to 15.35 and 15.45 is possible. But a break below 15.10 can test 15 or even 14.85
Copper (2.89) fell sharply yesterday as against our expectation for a rise to 2.95 and is poised at a crucial support. A bounce from current levels can take it back to 2.93. But a break below 2.89 can drag it to 2.87 and 2.84 in the coming days.
Brent (67.13) has come-off after testing 68. The expected break above 68 seems to be getting delayed as the 64-68 sideways range continues to remain intact. While below 68, Brent can break 67 and fall to 66.30 or even 65.80 in the coming sessions.
But unlike Brent, WTI (58.5) has not seen any pull-back yesterday and is managing to sustain above 58. This keeps the possibilities alive of WTI moving higher to 59.5 and 60.3. Support is at 57.9, a break below which will negate the expected upmove mentioned above and in turn will drag WTI lower to 57.15 or 56.75.
FOREX
Overall currencies are mixed. Rupee looks strong while Euro, Yuan, Pound may weaken a bit against the US Dollar in the coming sessions.
Dollar-Index (96.70) bounced a bit yesterday. Note that the daily candles show immediate support ay 96.25 which if holds could gradually take the index to higher levels of 97.25-97.75 again in the medium term. Only on a break below 96.25, if seen would we consider further bearishness in the Dollar Index towards 95.75 or lower. Preference is for a bounce from 96.25.
Euro (1.1315) is likely to test immediate resistance near 1.1350 or higher at 1.14 from where a fall is likely to be seen in the coming sessions towards 1.1250-1.1200. Medium term looks bearish.
Euro-Yen (126.43) has resistance at 126.8 on the daily candles. A rejection from there could push it back to 125-124 levels in the near term. View is bearish for Euro-Yen and could support a possible fall in Euro as well.
Dollar Yen (111.75) has risen a bit yesterday and could be headed towards our target resistance near 112.50 in the next 1-2 sessions.
Aussie (0.7084) is trading between 0.70-0.7150 and is likely to remain in the said region for the coming week too.
Pound (1.3244) is holding below 1.34 and could be headed towards 1.31 before again bouncing back from there. Near term looks bearish.
USDCNY (6.7254) has broken above 6.72, the trend resistance on the daily charts and while the pair moves up it could target 6.74/75 in the coming week. 6.70 could be a decent support for the medium term.
Dollar-Rupee (69.3625) has scope of falling towards 69.10-05 or even 68.87 in the near term. While below 69.50, downside momentum could remain intact. On the upside trade could be restricted near 69.75.
INTEREST RATES
The US yields are mixed. The 2YR (2.47%), 5Yr (2.43%) and the 10Yr (2.63%) have dipped from 2.48%, 2.44% and 2.64% levels while the 30Yr (3.05%) is up by 2bps.
The UK-US 10YR (-1.41%) has broken above immediate resistance contrary to our expectation. Unless the spread falls back immediately, it could continue to rise towards -1.37% pulling the Pound up in the near term.
The UK yields are trading higher. The 20Yr (1.67%) may head towards 1.71%, while the 10Yr (1.22%) could rise towards 1.26%.
The 10YR GOI (7.5533%) has risen and could test 7.60% before again falling from there. A break above 7.60% could take it higher towards 7.65% which could be in favor of Rupee weakness in the medium term. Watch yield movement near 7.60%.
