STOCKS
Dow (20404.49, -0.58%) has closed below our expected 20410 levels on the downside. The immediate price momentum indicates further scope of a fall towards 20250-20200 levels in the next 1-2 sessions.
Dax (12016.45, +0.13%) is trading just above immediate support levels of 11960-11930 region and while that holds, a bounce back towards 12200 is possible in the near term.
Shanghai (3167.59, -0.12%) now faces important resistance near 3175/3180 levels and while the price stays below 3175, there is a fair possibility of testing 3100 on the downside.
Nikkei (18489.05, +0.31%) could remain in the 18600-18200 region this week. But the fall may not be over yet. We will have to be ready to look for another downleg below 18200 in the medium term.
Nifty (9103.50, -0.02%) made an intra-day low of 9075 yesterday, trying to attempt below 9100. We may look for a fall towards 9000-8900 in the medium term before a bounce back.
COMMODITIES
Gold (1281) has moved lower in line with our expectation. More correction towards 1260-65 can be expected due to near-term overbought condition. We have been expecting 1260 for gold to hold for some time as buyers are taking every dip as a further opportunity for buying. 1301 could be a level where the price action has to be checked to assess the chances of further bounce to 1328 to 1350 levels.
Silver (18.15) also closed below its support at 18.30. We might see 17.70 within few days of time and we will remain bearish while it is trading below 18.30 levels. We think that the corrective phase could be restricted till 17.70-80 levels due to near term oversold condition
Copper (2.51) has been stuck in the range of 2.50-2.66. A close below 2.50 could open up 2.48 and 2.45 levels respectively. Gradual buying at 2.45 levels can’t be ruled out due to near term oversold condition.
We have clearly mentioned yesterday that “increase in EIA data could keep lid on the bullish momentum and could open up 52.50 levels for Brent and 50 levels for WTI as well”. Yesterday,Crude oil prices fell, hitting their lowest in 11 days as EIA report said shale oil output in May was expected to post the biggest monthly increase in more than two years. The respective daily lows for Brent was 52.59 and WTI was 50.09. We have witnessed similar kind of fall on 9th march,2017, and we had successfully warned our clients about that fall too.
Now,increase in U.S. oil inventories is again raising a concern whether the United States will remain the world’s biggest oil importer, which is a price supporting indicator, or if its soaring production and bloated stocks lead to lower imports and trigger shipments to the rest of the world, which would weigh on oil markets.
FOREX
All the majors are in a consolidation mode as the markets wait for the French poll to start on 23rd April though the final voting will be on 7th May.
Dollar Index (99.62) has marked a low at 99.45, just a bit higher than our target/support of 99.20-10 but the target may still be achieved if 100.00 holds as resistance in the near term.
Euro (1.0713) is taking a pause after the sharp rise from 1.06 to 1.0735 in just 2 sessions but the uptrend may resume any day, pushing it higher to 1.0780-1.0830.
Dollar Yen (108.96) continues its horizontal movement in the range of 108.00-109.40 and a major trending move can be expected only on a break from this range. Currently no directional bias but the trend still remains down with major support coming at 107.85.
Pound (1.2783) may spend the next few sessions in the range of 1.2600-1.2900, consolidating the recent gains made in the sharp rise from 1.2364 to 1.2900. While 1.3300 may be seen in the medium term, 1.2900 may hold as resistance in the near term.
Aussie (0.7507) has failed to bounce from the immediate support of 0.7525, weakening the technical structure. Now it may spend the coming sessions in the narrow range of 0.7450-0.7600 before any directional move.
Dollar-Rupee (64.58) is trading at 64.70 in the NDF at the moment. If it manages to sustain above 64.70-80 in the onshore market, then 65.20 may open up as the higher target but a failure near 64.70-80 may keep it in the narrow range of 64.40-70.
INTEREST RATES
The US yields are trading lower on Dollar weakness yesterday. There is immediate support below current levels and we could see a bounce back in the yields next week.
The German short end yields have risen and could move up for another 2-3 sessions before facing rejection from near term resistances. For now, the immediate trend is up.
The German-US 2Yr (-1.98%) and the 10Yr (-2.01%) are testing crucial resistances near current levels. We will have to watch if the resistance manages to produce rejection in the next couple of sessions; else we may expect a further rise in the yield spreads indicting a stronger Dollar against major currencies.
The UK 10Yr (1.05%) and the 20yr (1.59%) have moved up a bit from immediate support levels and could rise some more for a few sessions before resolving on the downside. As mentioned yesterday, long term looks bearish.
The 10 Yr GOI (6.8525%) has enough scope of rising towards 75 in the medium term. But a decent resistance is visible near 6.90% which if holds could delay a rise towards 7%.
