STOCKS
Almost all stocks look bullish for the medium term except Nikkei. Dax may consolidate in the near term before rising up sharply.
Dow (20689.24, +0.19%) is trying to rise above 20800 while above support near 20450. A failure to rise past 20800 could see a consolidative phase with some downside possibilities; else a break above 20800 is needed to take it to higher levels near 21200-21250.
Dax (12282.34, +0.21%) has played out exactly as expected. A rise to 12375 before falling off to 12220. Now while support at 12220 holds, it would try to rise back towards 12400 levels. The next 2-3 sessions could trade within 12400-12220 region.
Nikkei (18861.68, +0.27%) may test support near 18650 before again bouncing back to higher levels. Immediate resistance is seen near 19070 which if holds could keep the index in the 19070-18650 region for the next few sessions.
Shanghai (3257.64, +1.09%) opened with a gap up and could be headed towards 3275-3280 levels in the near term while support near 3200 holds.
Nifty (9237.85, +0.70%) had moved up quite a bit on Monday and could easily head towards our initial target of 9280 in the coming sessions. Momentum seems to be strongly bullish and a rise towards 9400-9500 levels in the longer term would not be a surprise if 9280 breaks in the initial testing.
COMMODITIES
As seen most of the times in the last few days, Gold (1253) and Silver (18.25) remained indifferent to the global cues and closed below their respective resistances levels of 1263 and 18.50, indicating a complete absence of directional clarity. . We have been expecting 1237 for gold and 17.90 for silver to hold for some time and gradual buying at lower levels can’t be ruled as buyers are taking every dip as a further opportunity for buying.
Copper (2.64) is trading within a range of 2.57-2.70. Only above 2.70, higher resistances of 2.80 can come into consideration. In the medium term 2.55-57 are going to be a strong support now but a close below that could open up 2.55 and 2.49 levels respectively.
Both Brent (52.83) and WTI(51.21) have found support and trading within the range of 52.09-53.45 and 50.30-51.7, though the possibility of a decline towards supports can’t be ruled out. We have US crude oil inventory data at 8.00 pm IST and the U.S. data forecast is -0.1M, decrease in weekly inventory. But a lower than expected decrease or an increase in inventory could open up 50 levels for Brent and 48.25 for WTI respectively.
FOREX
Absolutely no movement in Dollar this week so far but some volatility can be expected after the Fed and ECB minutes release today. Rupee may see some adjustment to the existing positions before the RBI meet tomorrow.
Dollar Index (100.50) has been trading in the narrowest range seen in a long time and this thin range of 100.35-70 may be resolved soon, probably to the higher side. Similar inertial is seen in Euro (1.0676) too, where the risk of further decline to 1.0580 levels remain still open.
Dollar-Yen (110.74) has broken the support of 110.90-75 and the chances of the upside being capped to 112.00-20 for the week are much higher now with the bears staying in control and immediate support coming near 110.10-109.90.
Pound (1.2440) is in a gradual contracting phase inside our range of 1.2350-1.2600 which may continue for the rest of the week.
Aussie (0.7567) has registered the weekly low so far at 0.7541, marginally higher from our target/support of 0.7530 and now may bounce towards 0.7650-80 in the coming days if 0.7530-00 holds.
The closing above the immediate resistance of 65.00 has opened up 65.20 for Dollar Rupee (65.02) but the chances of the resistance 65.20 holding and pushing Dollar Rupee down once again remain strong at the moment. Even in the best case scenario, the upside may be limited to 65.50-60 in the near term with the downside still open.
INTEREST RATES
The US-Japan 10YR (2.28%) has broken below the support near 2.3% which may now act as an immediate resistance for the coming sessions. In case the yield spread remains below 2.3%, it could possibly come down towards 2.25-2.20% in the near term. That could possibly indicate a fall in Dollar-yen in the next 2-3 sessions.
The US yields have risen slightly. The 5YR (1.88%), 10yr (2.35%) and the 30Yr (2.99%) are up 2-3bps and could rise some more in the near term.
The UK-US 10YR (-1.30%) is headed downwards and if it moves down further towards -1.33%, Pound could extend some more losses in the near term.
The German-US 10YR (-2.10%) is trading just above support levels and could bounce from there. Also watch out for a bounce in Euro in the coming sessions.
