STOCKS
Dow (21478.17, -0.01%) has not been able to move above 21570 in the last few sessions but at the same time the bears at resistance near 21500/600 do not seem to be strong enough to push the index sharply to lower levels. While it sustains above 21400, upside possibility remains high.
Dax (12453.68, +0.13%) seems to be bouncing from levels near 12300. The interim support turned resistance at 12500 is important for now and while the index trades below 12500, we could possibly see another leg of rejection after the ongoing “pause phase” which could last for another 2-3 sessions.
Shanghai (3208.66, +0.05%) bounced sharply to close above 3200, breaking the ongoing sideways movement within 3200-3170 levels. A rise towards 3220 is possible before a slight dip is seen. Overall medium term looks bullish towards 3250.
Nikkei (20027.42, -0.27%) is testing immediate support near 19980 and if that holds, we could see a rise back towards 20250 in the next couple of sessions.
Nifty (9637.60, +0.25%) was stable yesterday, trading above 9600. While it sustains at current or higher levels, our initial target of 9700 could be tested soon. A few sessions of sideways consolidation is possible before resumption of an upward rally. For now, near term looks bullish.
COMMODITIES
Gold (1223) is trading within the range of 1190-1230 and Silver (16.00) is within 15.80-16.50. We will remain bearish on Bullion while gold and silver are trading below 1250 and 16.50 levels respectively. We are now awaiting U.S. non-farm payrolls for June, due on tomorrow at 6:00 pm IST, for more insight into Fed policy and the future path of U.S Dollar.
No directional movement had been seen in Copper (2.66) also as it is trading within the range of 2.66-2.78.If 2.66 holds then we might see 2.82 within few days of time otherwise it might come back towards 2.55 levels. We will remain bullish on copper while it is trading above 2.55 levels.
Brent (47.97) and WTI (45.30) fell just a day before of the release of U.S weekly crude oil inventory data (8:30 pm IST,expected -2.4M B), as traders wanted to book profits after a streak of 8 up days in a row. As we have said that this short term rally hasn’t affected the midterm bearishness while Brent and WTI are trading below 54 and 51 levels. In very short term time frame, 48 (Brent) and 45.80 (WTI) could be the pivots, where the price action may determine the near to medium term path. A surplus or a less than expected shortage in weekly inventory could bring further bearish possibilities towards 44 (Brent) and 42.10 (WTI) into consideration
FOREX
No set date for US Fed balance sheet reduction and concerns over persistent soft inflation limits Dollar strength.
Dollar Index (96.28) has retreated a bit from our resistance of 96.50-60 and Euro (1.1338) still trades above the support of 1.1290, keeping bidirectional possibilities still open despite our preference for further Dollar strength in the coming days. As discussed in the last two days, till now, most of the majors are in a normal correction and further break of major supports are required before the downtrend can be confirmed. Therefore we wait for clarity.
Dollar Yen (113.04) is stuck in a range of 112.75-113.50 for the last 3 sessions but the bias remains bullish for 114.30-115.00 till the support of 112.60 holds.
It is a critical moment for Pound (1.2933) as it must rise right now if it has to keep the immediate upside momentum intact. Failure to rise today may rob it of the upside momentum and the support of 1.2880 may be challenged.
Aussie (0.7598) breached the support of 0.7580 briefly before recovering but now the lower support of 0.7530-15 come into focus which may be tested by the next week.
Dollar Rupee (64.78) spent the day in the range of 64.60-90 for the day and this range may continue for the rest of the week.
INTEREST RATES
The US yields may remain stable today but could start falling from current levels in the coming sessions. The 30YR (2.85%) could come off towards 2.83% while the 10YR (2.33%) and the 5Yr(1.93%) could move down to 2.30% and 1.90% respectively .
The Japanese yields are all rallying upwards and look bullish for the medium term. the 5YR, 10YR and 30Yr are a trading at -0.05%, 0.09% and 0.88%. the 30YR may head towards long term resistance near 1.12 while there could be less scope on the upside for the 10Yr and the 5Yr.
The UK yields have also risen sharply in the last few sessions but could now pause for some sessions or maybe dip slightly before resuming the near term uptrend. Medium term looks bullish.
The German yields are also trying to rise and could eventually move up with interim dips. But also note long term resistances are hovering above current levels and could push the yields lower in the longer run.
