STOCKS
Dow (26115.65, +1.25%) has immediate resistance near 26200 and if that holds, we could see a short dip to 25600-25800 levels.
Dax (13183.96, -0.47%) could be headed towards 13000 in the near term or remain paused for a few sessions, trading near current levels. The 3-day chart indicates some more bearish moves in the coming sessions before trying to move up beyond 13400 in the longer run.
Nikkei (23978.61, +0.46%) has moved up today also and a maximum upside of 24200-24300 looks probable in the near term before a sharp fall is seen. The resistance on the weekly charts are holding for now and could produce a rejection in the next few sessions.
Shanghai (3458.68, +0.41%) looks bullish for the near term and could rise towards resistance near 3500-3550 levels in the coming sessions. A corrective fall from 3550 levels looks possible in the longer run.
Government’s decision to lower its additional market borrowing by 60% triggered the rise in the banking stocks which took the Sensex (35081.82, +0.89%) to levels above 35000. The upside momentum is likely to continue today also keeping the index above 35000.
Nifty (10788.55, +0.82%) could head towards 10800 or slightly higher today but is expected to be short lived.
COMMODITIES
Brent (69.56) and WTI (64.18) could possibly trade below immediate resistances near 70 and 65 respectively. A few sessions of sideways and ranged movement is possible before a short dip towards 68 and 63 levels respectively.
Gold (1326.70) has come off from levels near 1345 without moving up to higher resistances near 1350/1360. While the price remains below 1330, we may expect movement in the 1330-1315 region for some time before again attempting to move up towards 1350. It would be important to keep a close watch on the Dollar Index moves above 91 in the near term.
Copper (3.20) could come off to test 3.15 on the downside. Near term looks bearish.
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.
