STOCKS
Dow (25792.86, +0.04%) dipped slightly from 26100 levels but while above 25500, the index looks bullish for the medium term. Note resistance visible near 26100 on the daily charts.
Dax (13246.33, +0.35%) has scope of testing 13400 on the upside and could come off from there in the near term. View is sideways for the coming sessions and bearish for the medium term.
Nikkei (23848.71, -0.43%) is trading below immediate weekly resistance and while that holds, a corrective dip is likely in the near term. A break above 24000, if seen could take it higher towards 24200/300 levels before coming off from there. /for the coming sessions we do not prefer a break above 24000.
Shanghai (3460.22, +0.69%) moved up breaking above immediate resistance near 3450. The index looks bullish for the coming sessions and may target 3500 soon.
Nifty (10700.45, -0.38%) and Sensex (34771.05, -0.21%) is likely to see a dip in the next few sessions of the week. Upside is likely to be limited to 10800 on Nifty and 35000 on Sensex.
COMMODITIES
Brent (69.17) and WTI (63.74) have come off as expected and could now continue to dip for a few sessions before trying to re-attempt higher levels. A test of 68 and 61 respectively is on the cards for the coming sessions.
Gold (1338.81) has paused near current levels and may come off to test 1330 in the near term before resuming its rise back to 1340-1350 levels.
Copper (3.2135) rose to almost test 3.30 on the upside before falling off sharply to close at lower levels. News states of a fading demand in China ahead of the Lunar Year. While the price trades below 3.35, the index looks bearish towards 3.15 in the longer run.
FOREX
Euro (1.2282) did see some consolidation yesterday, reaching a low of 1.2216, but is again trading just below its previous high of 1.2297. We could see a break past 1.23 soon for the next upside target of 1.24-1.25 to be tested in time for the ECB meeting next week (Thursday). Note that there is crucial resistance around 1.25 on the weekly line charts, which should ultimately hold in the near term.
Euro-Yen (135.77) is consolidating below 136 for the time being, but we might see a move past 136 as Euro moves past 1.23. There is resistance on daily candles near 137 which might be tested if Euro tests 1.24-1.25.
Dollar-Yen (110.66) tested support on the 3 day and weekly candles around 110.30 yesterday and may now gradually move up towards 112 by the end of this week. Upside may be restricted by crucial resistance near 112.5 on the weekly line charts.
Our expectation of a dip from Resistance near 1.3820-50 on the Daily candles for Pound (1.3794), seems to be holding on well for now. It might dip further towards 1.37, but the downside in the near term could be restricted to 1.36 (support on daily candles).
The Aussie (0.7969) has seen a high of 0.7999 today and is trading near 0.7970 currently, which might be reflective of some profit taking underway. This is an important resistance (as seen on weekly line chart) and could hold for the time being.
Dollar-Rupee (64.0375) saw a fast uprise yesterday and could now come off towards 63.90/85 on the downside in the coming sessions with an initial test of upside resistance near 64.20/25. It would be important to keep an eye on USD-CNY (6.4290) which is trading above the crucial 61.8% retracement level (6.3934, on the monthly chart) of the rise from Jan’14 to Dec’16 and this could be a crucial reversal level for the long term. A reversal on USD-CNY could signal long term bullishness for Dollar-Rupee.
INTEREST RATES
There is further yield curve flattening underway for US Yields as US 5 Yr (2.3602%) & 2 Yr (2.0224%) are seeing a continuing uprise while the 10Yr (2.5462%) & 30 Yr (2.8349%) continue to consolidate.
The US 10 Yr- 5 Yr spread (0.186%) now seems to be breaking support near 0.19-0.20% on the short term chart while the 30-10 Yr Spread (0.2887%) is moving towards previous lows near 0.25 on the long term chart.
Japanese 10 Yr Yield (0.085%) is continuing its ranging between 0.07% and 0.088% as expected. There is resistance near 0.17-0.18% for Japanese 10 Yr – 5 Yr spread (currently near 0.17%) and for Japanese 5 Yr (-0.085%) near current levels on the medium term chart. This suggests greater likelihood for the 10 Yr to trade near 0.07-0.075% for the next few sessions.
