STOCKS
Dow (21808.40, -0.02%) remained stable below 21900 and has equal chances of moving either towards 21950 or 21700 in the next couple of sessions. Dax (12123.47, -0.37%) on the other hand may remain sideways ranged within 11940-12350 zone as mentioned yesterday.
Nikkei (19334.90, -0.59%) has moved lower and could test our initial target of 19200 on the downside in the next few sessions. A short corrective bounce is possible from 19200 before testing lower levels of 19000 in the longer term. Near to medium term looks bearish.
Shanghai (3364.44, +0.05%) continues to trade higher and we wait to see a break above 3375/80 to ensure bullishness to continue in the near term. Else a short dip is possible from 3380. Overall near term looks bullish just now.
Nifty (9912.80, +0.57%) could possibly test 9950 on the upside today. We need to watch price action closely; in case the index manages to sustain above 9950, it could move up afresh towards 10000-10050 levels again. Else a rejection from 9950 could bring it back towards 9800. For now we give equal chances of movement happening on either side and would like to wait for more clarity. However the weekly charts are indicative of an upmove.
COMMODITIES
Gold (1323) has been stable just above its crucial support of 1300 . The next possible resistance could be 1350. Yesterday, we had clearly mentioned that the current stability in the price is an indication of a base building before a sharp rise, as the bulls are getting stronger to shoot up above 1300 in the near term. The only concern is the near term overbought condition in Gold thus a short term price correction is needed towards 1300 before the next upside rally towards 1350
Silver (17.40) is also testing its resistance of 17.40. The immediate trading range could be 16.70-17.40 .
Copper (3.07) has moved up in line with our expectation. Immediate resistance is poised at 3.12 regions. Copper is highly overbought in near term time frame thus We might see a dip towards 3.00 levels to gather fresh buying momentum.
Brent (52.04) and WTI (47.40) are both trading sideways. While Brent may come off towards 50 while below 53.80, WTI could trade within 50.00-46.50 levels for some more time.
FOREX
Yen (USDJPY = 108.80) has strengthened, with North Korea coming back on the market’s radar, and it seems the Low has been near 108.33. A Day Close below 108.60 and Week Close below 108.00 could be severely bearish. The Euro-Yen (130.19) is stable near yesterday’s levels. But, as mentioned yesterday, a rise past 131.40 is needed to bring in more confidence.
The Euro (1.1967) has risen further since yesterday, seeing a High of 1.1986 in the US session yesterday. Support moves up to 1.18 now and a rise past 1.20 is more likely than not.
Some more strength in the Pound (1.2935) from yesterday, rising past earlier resistance at 1.2915. Might reach up to 1.30 also. The rise from 1.2775 over the last three days makes us reassess our earlier bearishness.
The Aussie (0.7925) has decent Support at 0.7900 and seems to be gearing up for a test of and rise past 0.80, along with a possible rise towards 1350 in Gold.
The Chinese Yuan (USDCNY = 6.6071) has fallen sharply over the last several days, but may have Support at 6.59. A bounce is possible from there. Dollar-Rupee trades near 63.90/95 on the NDF and is expected to have Support in the 63.80-70 region.
INTEREST RATES
Muted price action had been seen in German-US 2 Yr Spread (-2.08%) and the German-US 10Yr Spread (-1.76%) . The recent bounce in German-US 10Yr Spread had helped Euro to moved up in line with our expectation.
We had told that US 10Yr Yield could move lower while it is trading below 2.18 regions and today it is at 2.13.This could be a result of the renewed geopolitical tension between US and North Korea. The US 5Yr has good Support at 1.7%, while the 10Yr has good Support at 2.095%.. We have to monitor the US Security Council meeting on Tuesday.
The Japanese 5Yr JGB (-0.131%) and the 30Yr JGB (+0.83%) are hovering around their respective supports, suggesting a possible bounce.
We are also expecting bounce in UK 5Yr and 30Yr Gilt Yields as they are also testing Supports near current levels (5Yr 0.46% and 30Yr 1.60%).But the 10Yr is trading below its area of support and might moved lower towards 1.00 regions
