STOCKS
Overall the indices are stable just now and could be quiet for the next coupel of sessions without much movement expected.
Dow (20914.62, -0.10%) could remain paused within the 21000-20800 region for maybe another couple of sessions before again bouncing back towards important resistance at 21200.
Dax (12095.24, +0.10%) continues to trade along the upper trend line of a medium term channel. There is potential of a rise towards 12220-12300 levels in the near term before a short dip is possible.
Nikkei (19521.59, -0.35%) has scope of moving towards 19800 on a break above 19600 but while below 19600 it could remain stable in the 19400-19600 region. We could see some consolidation for the next couple of sessions.
Shanghai (3246.69, +0.29%) came off sharply after showing an initial rise above 3250 last week. Immediate support seen near 3225 and while that holds, we could see a rebound towards 3250 and higher in the coming sessions.
Nifty (9160.05, +0.07%) saw an intra-day high of 9218 on Friday before coming off to close at lower levels of 9160. Our upside target remains at 9280 for the near term from where a sharp corrective fall is expected.
COMMODITIES
Gold (1233) has closed at higher levels from a weekly low of 1196. We continue to look for a close above 1240-45 levels in the near term to take fresh long positions. But before that it may spend a few sessions within the 1215-45 region.
Silver (17.46) has tested immediate resistance at 17.47-48 before closing slightly lower. A break above that could take it up to 18.00. Overall we need to wait for confirmation for immediate directional clarity.
Copper (2.67) was almost unchanged and trading within a narrow range of 2.65-72. We will remain bearish while it is trading below 2.70-72.Only a close above 2.72 could negate our short term bearish view.
Brent (51.45) and WTI (48.41) still shows no strong sign of recovering as both of them had registered the intraday low at 51.36 and 48.26, close to our supports of 50 and 47.50 respectively. We will remain bearish while Brent and WTI are trading below 53 and 50 levels.
FOREX
As all the major events are past now, a quiet week can be expected with Dollar remaining weak as no fresh triggers are visible in the near term.
Dollar Index (100.16) remains weak and may see a gradual decline towards 99.00 over the week with the upside limited to 100.70-101.00.
Euro (1.0760) is wandering about listlessly near the major resistance 1.08, which if holds, may push it down to 1.07-1.06. Only a firm break above 1.08 opens up 1.10 but the probability of that stands at not more than 40% right now. The current net short position of the speculators is the smallest since May’16, which may well turn out to be an indicator for a top formation. Must be kept in mind.
Dollar-Yen (112.55) is getting closer to our target/support of 112.00-111.70 which is expected to hold by the speculators as the net short positions continue to pile up. But a break below 111.70 may open up much lower levels of 110.00 and even 108.50-00.
Pound (1.2382) has almost achieved our initial target of 1.2410 with a high of 1.2405 and now requires a rise above 1.2430-40 to extend the rally to 1.26 levels.
Aussie (0.7718) is testing the major resistance area of 0.7750-0.7850. As discussed last week, this long term resistance area is a very significant make or break zone which, if overcome, may determine the path for the next few months but it remains to be seen if Aussie manages a break above 0.7750-0.7850 immediately or not.
Dollar Rupee (65.45) has tested and currently holding above our target/support of 65.20. Now a sideways consolidation in the range of 65.20-70 can be expected for the next few sessions before any more major move.
INTEREST RATES
The US yields fell sharply in the last 2-sessios but could see some recovery in the near term. The 5yr (2.02%), 10YR (2.50%) and the 30Yr (3.11%) are trading slightly lower from previous levels of 2.04%, 2.54% and 3.15% respectively.
The German-US 2yr (-2.11%) is testing resistance at current levels coinciding with the resistance at 1.08 on Euro. If the resistance levels hold, we could see a fall in both Euro and the yield spread.
The Japan yields are mixed. The 30Yr 90.84%) could test 0.9% before dipping slightly while the 5YR (-0.13%) and the 10Yr (0.08%) could either remain stable or see some fall in the coming sessions towards -0.15% and 0.05% respectively.
