STOCKS
Important resistances are seen above current trading levels of Nifty, Nikkei and Dax. Shanghai is trading near important support levels and could either break below or bounce back from current levels. Dow on the other hand has some scope on the upside and looks bullish for the coming sessions.
Dow (25316.53, +0.30%) closed above 25250 yesterday also and could move up in the coming session targeting 25750. Near term looks bullish.
Dax (12766.55, -0.35%) has risen a bit but has immediate resistance near 12900 and further up at 13100. Overall we could see some range trade in the 13100-12400 region in the near term. Either the index could come off from 12900 or test 13100 before coming off sharply from there.
Watch price action near current levels on Nikkei (22767.18, +0.32%) as it trades just below the important daily trend resistance. While below 22800 there is scope for the index to come off towards 22400-22200 levels.
Shanghai (3052.86, -0.47%) is back to levels near 3050 and while the support holds, the index is likely to be trapped in the 3100-3050 region. A break below 3050, if seen would turn bearish for the medium to long term opening chances of fall towards 2900 or even lower. Need to keep an eye at current levels.
Nifty (10767.65, -0.0065%) too has important resistance near 10850 and while that holds, index is likely to come off towards 10650. A break on either side of the 10850-10600 levels would determine the next course of direction.
COMMODITIES
Copper (3.2824) could see some corrective dips after rising sharply to 3.30 from levels near 3.05 in the past 5-6 sessions. A fall towards 3.25-3.20 is possible before the price again starts to move up.
WTI (65.73) could remain below 67 for the next few sessions. Only on a sustained break above 67, the index could rise towards 69-70 levels.
Brent (76.55) has near term resistance at 78. But if the index breaks above 78, there is enough room on the upside towards 80. Some range trade is possible in the coming sessions. A break below 76 could take it down to 74 before bouncing from there.
Gold (1299.57) is trading in a near term channel and could rise towards 1310-1320 in the coming sessions. But we cannot negate a fall back to levels below 1300 in the near to medium term.
FOREX
Dollar index (93.43) could move lower this week towards levels near 93. Support near 92.8-92.6 (earlier resistance line on weekly line chart) could be crucial and a break below that could be the first signs of a bearish Dollar Index in the weeks to come.
Euro (1.1797): Euro is likely to see an upmove towards 1.1875 in this week. Levels near 1.19 could be a crucial resistance zone. A decisive breach beyond 1.19 could make the Euro bullish in the medium term.
Dollar Yen (109.49) could move lower towards support trendline on daily candles near 109 in the next 1-2 days, after which a bounce back to levels near 109.75 is likely. A break of 109 however could make the Dollar Yen bearish in the coming weeks.
Euro Yen (129.17): After testing resistance on daily and 3 day candles near 130 last week, the Euro Yen is dipping. An upmove in the Euro towards 1.1975 while Dollar Yen stays in the 109.0-109.5 zone in the next 1-2 days gives a target of 129.4-130.0 for Euro Yen, implying that the downmove from resistance might not be very swift. Let’s wait and watch.
Pound (1.3415): Pound had dipped after testing resistance on daily candles (near 1.347) last week. It looks bearish in this week towards levels near 1.33-1.32.
Dollar Rupee (67.5050) : There could be a dip towards 67.3-67.1 in the coming 1-2 sessions. Below that, previous low near 66.80 would be another crucial level, whose break would open up 66.5. Rise beyond 67.85 (less preferred currently) would confirm a rally towards 68.5 (or higher).
INTEREST RATES
Current yields: US 10 Year (2.96%), 30 Year (3.10%), 5 Year (2.80%), 2 Year (2.50%)
A host of key data releases and major events are lined up this week, which could have a significant impact on global yields. The week starts in the backdrop of the rather controversial G7 meet, in which trade worries got further aggravated. This could be one factor inducing risk averseness. The US-North Korea summit in Singapore could be another event which moves investor sentiment. Adding to that, there is the US CPI data release on 12th June, FOMC meet on 13th June , US Retail Sales data release on 14th June and the ECB meeting on 14th June as well.
A rate hike by the US Fed should have already been factored into current yields and hence, might not move yields much. Any increase in CPI or Retail Sales would certainly be bullish for yields. At the same time, some hawkishness could be expected from the ECB which would be bullish for German yields and consequently, for US yields as well. A rise for the US 10 Year yield beyond 3% again or a drop towards 2.60%-2.55% might well hinge on the events of this week. Let’s see how it plays out.
