STOCKS
Dow (21005.71, +0.01%) could possibly test 20750 or a little lower before again bouncing back towards 21500 in the medium term. Immediate resistance near 21200-21500 levels may hold for a couple of sessions. Overall medium term trend is up.
Dax (12027.36, -0.27%) came off from resistance on the daily candle chart near 12090 and while that holds, we may expect a dip towards 11900 in the next few sessions. Overall view is bullish just now. Only on a break below 11900, can we shift our focus on lower levels of 11800-11700. For now we keep open chances of testing 12100-12170 while above 11900.
Nikkei (19373.60, -0.49%) came back to levels below 19400 after staying at higher levels for only 2-sessions. Was this a false break on the upside? In that case there could be a fall towards 19200-19000 levels in the medium term. Else a bounce back to levels above 19400, may take it higher in line with our expectation.
Shanghai (3229.22, +0.34%) is testing the 21-day MA as an immediate support and if that holds, we could see a bounce back towards 3275 and higher in the medium term. View is bullish for the coming sessions.
Nifty (8897.55, -0.02%) has faced rejection from levels near 9000 but is stuck in the 8850-9000 region for the last few sessions. While crucial resistance near 9000 holds, we may expect a fall towards 8800 or lower in the near term. Else, there could be some consolidation within the 8800-9000 region for some more time.
COMMODITIES
Gold (1234) is trading within its sideways range of 1212-1275. Unless it will manage to close above 1247-50, it will be difficult for gold to move higher.Gold/WTI ratio is at 23.02 with a resistance at 23.50,may came down towards 21 or even lower.
Silver (17.83) is holding its upward trend line support of 17.62.A close above 18 could open up the resistance of 18.60. A close below 17.45 could be trend reversal.
Copper (2.68) is hovering around its pivot of 2.768 of its recent trading range of 2.60-83. It is holding its upward trend line support at 2.65-68 since October 16.
Brent (55.59) and WTI (53.12) both are trading within their sideways ranges of 54-58 and 52-55 with no directional bias. Weekly Brent-WTI spread is at 2.13, took support at 2 and may bounce back towards 2.5-3.
FOREX
With a rate hike in March well accepted and discounted in the prices, the markets will look forward to RBA meet tomorrow and ECB meet on Thursday, 6th March’17. While Geopolitical tensions may drive Yen this week, the Indian markets will wait for the all important State Elections result on Saturday, 11th March’17.
Contrary to expectations, Dollar Index (101.44) retreated sharply but the trend remains up till it stays above the medium term support near 101.00-100.70. It may trade sideways in the range of 100.70-102.25 this week.
The main driver for Euro (1.0607) in the recent times has been the French election and a collapse of the centre-right candidate Francois Fillon’s campaign has shot it up to the 3-week high and our resistance 1.0620 levels but a failure to rise above 1.0620-30 immediately may keep it range bound in 1.0500-1.0630 till the ECB meet on 9th Mar’17.
Dollar-Yen (113.78) has been unnerved by North Korean missile launch this morning and with the uptrend a bit weakened now, horizontal trade in the range of 113-115 looks more likely instead of the previously expected rise.
Fresh concerns about a second referendum on Scottish independence keep Pound (1.2285) weak. As discussed previously, further consolidation may be seen near the interim support 1.2200 before it declines further towards 1.2100-2085 levels.
Aussie (0.7573) is waiting for the RBA meet tomorrow but barring any surprise tomorrow, the central bank is widely expected to keep the rates unchanged. The currency may test the near term support zone 0.7520-00 before declining further to lower levels of 0.7450.
Dollar-Rupee (66.81) remained stable in the very narrow range of 66.80-90 on Friday but may test the long term support near 66.50 from where it may bounce back to 67.00-20 this week.
INTEREST RATES
Probability of a rate hike in March has increased and Yellen has also given an indication of this in her Friday’s speech. The US yields may rise in the near term.
The US yields have risen. The 5Yr (2.00%), 10Yr (2.47%) and the 30Yr (3.07%) are almost stable just now but have come up to test resistance levels which may hold in for the next couple of sessions. The 30Yr (3.07%) may face immediate resistance near 3.10% which could produce some rejection in the near term.
The German-US 2Yr (-2.12%) had bounced back from levels near -2.20% but could see some pause to see another dip in the near term. A rise towards -2.05% is possible on the upside followed by another sharp rejection which could take it lower towards -2.20% again. We need to keep an eye on this closely.
The US-UK 10Yr (-1.29%) has paused near current levels and in case a small bounce is seen, we could expect some recovery in the Pound after the sharp fall seen last week.
The UK yields have risen, the 5YR rising the most from 0.3150% to 0.5740% in just 2-sessions. The 10YR (1.18%) and the 20Yr (1.72%) are also trading higher and could move up in the near term.
