STOCKS
Dow (20054.34, -0.18%) is unable to gather momentum for a sharp rise from current levels. However, we keep open, chances of rising towards 20200 and higher in the medium term. For now, there could be some consolidation in the 20200-20000 region.
The 11928 resistance is holding well on the Dax (11543.88, -0.05%) and while the index trades below the resistance, we may see a test of 11400 support levels in the next few sessions. A bounce from 11400 is expected in the near term.
Nikkei (18976.16,-0.17%) continues to remain stable. While immediate support near 111.36 holds on Dollar-Yen and the currency pair remains within 111.36-112.60 levels, Nikkei could find it difficult to make a sharp break on either side of the 19258-18651 region. Near term could possibly remain consolidative.
Shanghai (3180.57, +0.41%) has clearly broken above the daily candle resistance near 3160. Now the next resistance is coming up at 3200 which is crucial to decide on the medium term direction for the index. Looking at the weekly charts, it is like a conflict between the resistance at 3200 and the a possible rise towards 3400. A small dip from 3200 is possible before finally breaking on the upside in the longer run.
Nifty (8769.05, +0.01%) rose back to levels above 8750 in the 2nd half of the session yesterday after the RBI kept rates unchanged. We could possibly expect some strength in the index towards 8800-88500 in the near term. Overall trend is up.
COMMODITIES
Gold (1240.80) has been in a nonstop rally so far, indifferent to the highly overbought state. With the momentum not faltering yet, we have to consider higher levels of 1275-80 if it manages a break above 1250, as discussed yesterday.
Silver (17.75) remains in an uptrend but the gradual loss of momentum may encourage the bulls. It may ride on the back of Gold to higher levels but any weakness in Gold may push it below the support of 17.60 towards 17.20 fast. Cautious.
Both Brent (55.36) and WTI (52.56) have bounced back from their respective supports in line with expectations and keep the chances of our preferred upside breakout from their respective 6-week ranges of 53-58 and 50-55 open so far.
Copper (2.672) is trading sideways in the range of 2.61-2.70 as expected and that may continue for a few days more.
FOREX
Dollar is trying to make a base and its bullish reversal is yet to be fully confirmed. RBI has signaled an end to the accommodative stance which has strengthened Rupee.
Dollar Index (100.31) is stuck in the range of 100.00-101.00 for the last couple of sessions and requires a break above 100.75-101.00 to confirm a fresh uptrend. The immediate trend is neutral with bidirectional possibilities open.
Euro (1.0685) has bounced from 1.0650, brightening the chances of sideways consolidation in 1.0650-1.0800 for the next few sessions.
Dollar-Yen (112.12) is making a base in the narrow range of 111.50-112.70. Despite the dominant downtrend, the chances of rising to the major resistance of 113.50-60 remain open till the immediate support of 111.30 holds.
Pound (1.2506) is trading sideways in the range of 1.2350-1.2700 as expected which may continue for a few more sessions before any directional bias emerges.
Aussie (0.7614) is trading quiet but it needs to stay above the near term support 0.7570 to keep the chances of another rise to 0.7725-50 open where the bears may return again and push the price down.
Dollar Rupee (67.19) bulls have been disappointed by the RBI policy of maintaining the status quo and may test the major support zone of 67.00-66.90 by tomorrow.
INTEREST RATES
The RBI kept rates unchanged disappointing the market sentiments. Although not much movement was seen in the stock market, the yields shot up yesterday to rise from 6.5683% to 6.8920% levels, all in a single session. While it continues to move up, we may see a rise towards 6.9-7.0% soon.
The US yields are falling. The US 10-5Yr spread (0.52%) has come down as expected and could move lower towards 0.50-0.48% in the near term before bouncing back from there. The 10YR (2.34%) is down 4bps and is falling faster than the 5Yr (1.82%) which is down 2bps. The 10YR may continue to fall faster in line with our expectations.
The German-US 2YR (-1.94%) is trading at resistance levels and if it holds, we could see some fall in the Euro in the near term.
The UK yields are down too. The 5Yr (0.42%), 10YR (1.32%) and the 20Yr (1.79%) are trading lower than previous levels of 0.44%, 1.3750% and 1.8530% respectively.
