STOCKS
Dow (20658.02, +0.01%) is almost stable and in a sideways consolidation mode as expected. Some steady movement in the 20780-20500 region is possible in the next couple of sessions before breaking on either side.
Dax (12200.52, -0.20%) is testing support near 12200 or could test lower support near 12100 from where an immediate bounce is expected in the coming sessions. But on a medium term some sideways movement could be expected as there is not much scope on the upside beyond 12400 just now. A dip below 12100, could take it towards 12000 or lower before recovering again.
Asia-Pac is weak with the Chinese and Japanese stocks looking weak.
Shanghai (3262.10, -0.22%) came off from daily resistance near 3280 and while that holds, we could see a fall towards 3250 again before bouncing back towards 3300 in the medium term.
Nikkei (18708.49, -0.48%) has not been able to sustain at higher levels and may re-test 18600 or lower in the near term. A sustained movement below 18600, if seen, could eventually lead to a fall in the index for the medium term.
Nifty (9181.45, -0.18%) could fall to 9130 today before possibly bouncing back again from there in the coming sessions.
COMMODITIES
Gold (1251) was almost unchanged and it keep trading in the narrow range of 1237-1263, which may continue for some days. Global cues are in favor of gold as the break below 100.50 for Dollar Index (101) could be resulted in good gains for bullion. We have been expecting 1237 for gold to hold for some time and gradual buying at lower levels can’t be ruled out as buyers are taking every dip as a further opportunity for buying.
Silver (17.95) has tested its support at 17.70 and settled marginally higher. Immediate trading range could be 17.80-18.30 but a close below 17.70 could open up 17.50 as well. Overall silver looks weak but we need to wait for confirmation for immediate directional clarity.
Copper (2.61) has been stuck in the range of 2.55-2.70 with no visible intent for a breakout. Range bound trading may go on for some time. In the medium term 2.55-57 are going to be a strong support now but a close below that could open up 2.50 and 2.45 levels respectively.
Brent (56.01) and WTI (53.07) had closed above their respective resistances, which has opened up higher levels of 57 and 54. Immediate trading range for Brent and WTI could be 54-56.40 and 51-53 and considering the short term overbought state, possibility of a near term correction can’t be ignored.
In case of any surplus in U.S crude inventories, the upside in the near term may be limited to 56.40 and 53. The trend is bullish in the near term time frame and any corrective fall may add fresh longs at the lower levels.
FOREX
Nothing changed in the global scenario as the political tension over Syria and North Korea lingers. Dollar stays strong against the majors and Rupee may conditionally weaken a bit more.
Dollar Index (101.05) is stalling near our resistance of 101.55-75 and only a successful break above the resistance can open up further upside. In case of a failure here, a gradual decline towards 100.00 can be seen. Prefer to watch the price action here for clarity at this point.
Euro (1.0585) is timidly holding above the support of 1.0550 till now but no strength is visible yet. The persistent decline in the German-US yield spreads (check Interest Rates section) keep the currency weak and if 1.0550 breaks, the decline may extend to 1.0450.
Dollar Yen (110.65) has been rejected exactly from our resistance of 111.60. Unless an immediate break above 111.60 is seen, the risk of a break below the support of 111.10-109.90 may be back. No clear bias in the near term though the trend remains down in the medium term.
Pound (1.2419) has bounced back from our support of 1.2350, increasing the chances of further sideways movement in the broader range of 1.2350-1.2600. Immediate resistance comes at 1.2465 which may be tested soon.
Aussie (0.7495) sustains the lower levels with no apparent strength. Our downside target of 0.7450 remains unchanged with even 0.7375 a possibility.
Dollar-Rupee (64.56) has made a high of 64.5750 yesterday, very close to our immediate target of 64.60. As the pair trades at 64.72 in the NDF at this moment, a successful break above 64.60-70 in the onshore market may push it higher towards the major resistance of 65.10-25 in the next few days.
INTEREST RATES
The US yields do not look as if they are willing to move up just now contrary to our expectation of a rise mentioned yesterday. Some consolidation near current levels is possible for a few more sessions before moving up sharply. The yields have again moved down to re-test support levels and may not have much scope on the upside just now.
The 5YR (1.88%), 10Yr (2.35%) and the 30YR (2.98%) are down from 1.91%, 2.38% and 2.98% respectively.
The German-US 2Yr (-2.10%) and 10Yr (-2.14%) have moved up slightly but overall looks bearish over the medium term. A slight rise could be expected over today and tomorrow followed by a dip back toward current levels or even lower.
The 10Yr GOI (7.0569%) could rise towards 7.15-7.20% in the next 4-5 sessions before dipping towards 7%.
