STOCKS
Dow (22284.32, -0.05%) looks bearish towards 22200-22100 levels and could soon test these levels. While below 22400, near term looks bearish.
Dax (12605.20, +0.08%) is stuck below the 12675 level and could trade sideways for a few more sessions. A test of 12500 or lower is possible going forward.
Nikkei (20270.97, -0.29%) could come off towards 20100 in the near term. The stability in Dollar Yen is holding the index from falling sharply just now but in the medium term, the index looks bearish.
Shanghai (3344.67, +0.03%) is almost stable near previous levels and could trade sideways for a few sessions before deciding on further direction. Equal possibilities of either a rise towards 3360 or a fall towards 3300 exists.
Nifty (9871.50, -0.01%) could have possibly formed a double top and if the pattern turns out to be valid, there is more room on the downside for Nifty in the coming sessions. A break below 9800 would confirm its extension towards 9700-9600 in the coming sessions.
COMMODITIES
Precious metals may show some weakness in the near term. Crude prices are mixed, little room on the upside but could come off thereafter. Copper looks weak too for the coming sessions.
Brent (58.63) has some more room on the upside and looks bullish while WTI (52.12) is testing weekly resistance just above current levels. Brent could possibly move up towards 60-62 levels while WTI may come off in the coming sessions.
Brent-WTI spread (6.55) is down from previous levels of 7.15 but the spread could be headed towards 8 in the near term.
Gold (1295.22) came off sharply from 1313 yesterday and closed at levels below 1300. This was contrary to our expectation of testing 1320.Note that 1285-1290 region is an immediate support and could push the index to levels above 1300 again. But while the US Dollar Index (93.05) gains towards 94, Weakness in Gold could persist.
Silver (16.85) has some chances of testing 16.50 in the coming sessions. Overall near term trade could be seen below 17.00-17.20 levels.
Copper (2.9230) could trade below 2.95/98 in the coming sessions and the 3-day and the weekly charts indicate some potential fall towards 2.85-2.80 in the medium term. Our view is bearish for the near to medium term.
FOREX
As it turns out, the Dollar Index (93.05) is trading above 93, a level we thought would not break easily. A high of 93.29 was seen yesterday and a further rise to 93.50-94.00 is now possible. The Euro (1.1790) too has broken below 1.1800 and can see further decline towards 1.1750-10, as warned yesterday. The time frame could extend to next week.
Dollar-Yen (112.38) saw a good bounce yesterday on overall Dollar strength, suggesting that the sideways range of 110.50-113.00 mentioned yesterday may have some merits. The Euro-Yen (132.50) has moved up alongwith Dollar-Yen but has important Resistance in the 133.00-50 region.
The mentioned Support at 1.3430-00 on the Pound (1.3436) has held on first testing yesterday, but could be vulnerable to a break. If that happens, a fall to 1.3315-3265 will come into the picture.
The Aussie (0.7872) has disappointed a bit by being unable to hold above the support at 0.7900 mentioned yesterday. This brings up chances of further decline to 0.7750 now.
Dollar-Yuan (USDCNY = 6.6346) continues to rise. targeting 6.65. Dollar-Rupee (65.45) may face Resistance in the 65.50-60-75 region today.
INTEREST RATES
Contributing to the Euro (1.1790) weakness, the German-US 2Yr Spread (-2.18%) has broken below -2.13% and may dip some more towards -2.23%.
The UK-US 10Yr Spread (-0.91%) looks consolidative near current levels and seems to suggest chances of further rise towards -0.85%. This does not go well with expectations of Pound weakness (see Forex section above). So we need to watch this for a while.
US Yields (5Yr 1.86%, 10Yr 2.24%, 30Yr 2.78%) have seen an uptick in the wake of Yellen’s speech last night, but face important Resistances near/ just above current levels. Need to watch whether these will hold or break.
The Indian 10Yr GOI (6.6689%) should have Resistance at 6.70% in the near term.
