STOCKS
Global indices like the Dow, DAX which were looking mixed have turned positive now. News on China’s PMI entering into the expansion phase have given a boost to the Asian indices – Nikkei and Shanghai. Indian equities can also take cues from them and move higher.
Dow (25928.68, +211.22, +0.82%) has risen breaking above the 21-day moving average (25722) which may now act as a good support. The near-term outlook is positive for a test of the next resistance at 26060, a strong break above which can pave way for a test of 26250. But a pull-back from 26060 can drag the index lower again to 25750 or 25720.
DAX (11526.04, +97.88, +0.86%) has an immediate resistance at 11542 (21-day moving average). A strong break above it can take it higher to 11720 in the near term. But a pull-back from the 21-day moving average resistance can drag the index to 11350 in the coming days.
Nikkei (21679.44, +473.63, +2.23%) has surged breaking above 21400 and has the potential to target 21900-21950 while it sustains above 21500.
Shanghai (3153.98, +63.23, +2.05%) has risen above the key resistance level of 3120. A decisive close above 3120 will mark the end of the sideways consolidation and the resumption of the overall uptrend targeting 3280 in the coming days,
Sensex (38672.91, +127.19, 0.33%), though reflects indecisiveness from Friday’s candles looks strong on the weekly charts. Strong support is in the broad 11600 and 11500 region and remains bullish for a rise to 39000 and 39600 in the short term.
Nifty (11623.90, +53.90, +0.47%) has bounced sharply from around its support at 11570 on Friday. The bullish outlook is intact for the index to test 11750 and 11800 in the coming days.
COMMODITIES
Gold looks weak in the near term while silver is mixed and can remain range bound. Copper has gained momentum and can inch further higher. Oil continues to consolidate with a bullish bias.
Gold (1292) has turned weak after last week’s sharp fall. As long as it trades below 1300, a fall to 1280 or even 1270 cannot be ruled out in the coming sessions.
Silver (15.15) is getting support from the psychological level of 15. But it needs to breach the immediate resistance at 15.20 to extend the current bounce-back move to 15.35. Inability to breach 15.2 can pull it to 15 again and keep it range bound between 15 and 15.2 for some time. The next support below 15 is at 14.85
Copper (2.95) has surged much higher than our expected level of 2.91 and looks bullish to test 2.97-2.98.
Brent (68) continues to oscillate between 66.5 and 68.5. The bias remains bullish for Brent to break 68.5 and rise to 69.7 and 70 in the near term.
WTI (60.45) can rise to 61.5 and 62 if it sustains above 60. It continues to looks relatively stronger than Brent on the charts. But a dip below 60 can drag it to 58.5.
FOREX
Currencies may trade weak against the US Dollar and may continue for a few sessions.
US Dollar looks strong for the near term. The 3rd vote for the withdrawal agreement for Brexit would be important to watch.
Dollar-Index (97.23) is almost stable above 97. While the index sustains above 97, it could head towards 97.75 on the upside which could act as a decent resistance for the medium term.
While upside scope of testing 97.75 remains on the Dollar Index, Euro (1.1227) could test 1.12/11 on the downside. View is bearish as seen on the 3-day candles.
Euro-Yen (124.81) has interim resistance at 125 and while that holds, there is scope for a fall in the near term towards 124 /123 levels. On a sustained break above 125.00/20, we could expect a possible rise towards 126.
Dollar Yen (111.15) has near term resistance at 111.50 which if holds could push the pair back towards support at 110.50-110.00. Immediate view is bullish with a possible fall in the medium term.
Aussie (0.7125) has risen in the last 2-sessions but could face resistances near 0.7150 and 0.72 respectively. While any of the above hold, Aussie may come off to 0.7050 or lower towards 0.700-0.695 in the medium term.
The Vote on withdrawal agreement on Friday faced rejection and the MPs are scheduled to vote for the other part (political declaration outlining the future relationship with the bloc) today. Pound (1.3030) is looking weak and if it manages to break below immediate support at 1.30, it could turn bearish for the medium term targeting1.29-1.28 levels in the near term.
USDCNY (6.7056) has immediate support at 6.70 which if holds could push the pair back towards 6.74 in the near term. A break below 6.70, if seen could turn bearish where the Yuan could strengthen towards 6.68-6.67 levels.
Dollar-Rupee (69.16) is trading above near term support at 69. While that holds, there is scope of rising towards 69.50 or higher in the near term.
INTEREST RATES
The US yields have bounced well and could now rise in the near term. The 10YR (2.44%), 5Yr (2.27%) and 30Yr (2.84%) have moved up. The 10YR could rise towards 2.46/50% while the 30YR could rise towards 2.90%.
The German-JGB 10Yr (0%) has fallen sharply and unless it recovers from here, it could turn more bearish in the near term towards -0.05% pulling down Euro-Yen to levels of 124-123.
The UK-US 10Yr (-1.45%) has also fallen from resistance near -1.38% and while that holds, the yield spread could fall further towards -1.51% indicating further weakness for the Pound.
The 10YR GOI (7.4858%) is stuck above important support at 7.45%. A break on either side would be crucial.
