STOCKS
Results of the first round of French elections have brought in hopes to the investors throughout the world except China. Macron would face off with Le Pen for the second round on 7th May but the stocks could see some upside before that. .
Dow (20763.89, +1.05%) has risen well from levels above 20400 but could test immediate resistance near 21050-21200 levels from where a short dip is possible.
Dax (12454.98, +3.37%) opened with a gap up and shot up to close at the day’s high of 12454 yesterday breaking above the apr’15 high of 12391. There is a fair chance of testing 12540 today before a pause is seen.
Shanghai (3132.93, + 0.11%) is the only weak performer amongst the other Asian indices. It has broken below the weekly support trend lines and for now only the 3-day support near 3100-3080 is visible which gives some hope of recovery in the medium term. Else an initiation of a sharp fall is possible for the longer term.
Nikkei (19034.74. +0.84%) has been pulled up buy a weaker Yen since the last 2-sessions. Either the index moves up to test 19800 before coming off from there or comes off immediately from current levels. We prefer some more upside while the global indices are moving up on the favored French election results.
Nifty (9217.95, +1.08%) has some scope of testing 9300-9400 levels before seeing a sharp corrective fall from there. A rise yesterday has proved the support near 9100 to be holding well for now. In case this continues, we could see an attempt to rise towards 9300 in the near term.
COMMODITIES
Gold (1275) moved little during the session as it closed near the midpoint of our expected range of 1260-1305. As stated before, the sideways consolidation is expected to continue. 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 (17.87) had also moved lower till 17.54 but managed to close above its crucial support of 17.60-70 levels. Immediate trading range could be 17.60-18.35. We think that the corrective phase could be restricted till 17.60-70 levels due to near term oversold condition.
Copper (2.54) has been stuck in the range of 2.50-2.67. A close below 2.50 could open up 2.48 and 2.45 levels respectively. Only above 2.67, higher resistances of 2.72 -80 can come into consideration.
Brent (51.90) and WTI (50.27) both had moved lower in line with our expectation. They are within their trading ranges of 50.09-52.15 and 50.25-51.70 respectively. Brent may consolidate within these levels for few more sessions though the possibility of a decline towards supports can’t be ruled out. A close below 50.20 could drag WTI towards 48.36 levels. We will remain bearish while Brent and WTI are trading below 53.60 and 51.70 levels respectively.
FOREX
Anxiety over the French elections fading, the focus now turns to the Trump’s plans to be unfolded tomorrow, 25th April. The impact of the Trump-plans can move Dollar sharply in the near term.
Dollar Index (99.13) is trading quietly near the very significant support of 98.90-50 (modified) from where it can still bounce very sharply. The chances of a major reversal from the current levels must be considered despite the prevailing downtrend. As discussed yesterday, the initial signs of a larger degree correction coming to an end are visible, though pending confirmation.
Euro (1.0851) is stable at the higher levels but the maximum upside may be limited to 1.0930-50, though even these levels may not be revisited in the near term. A gradual decline to 1.0700 or lower looks the more likely option.
Pound (1.2779) has been one of the most stable majors in the last few sessions and it may continue its sideways consolidation in the range of 1.2750-1.2900 with a bearish bias. The chances of a retest of 1.2600 in the coming days can’t be ruled out.
Dollar-Yen (110.04) has been struggling around the resistance of 110.10 in line with our expectations but the demand near the immediate support of 109.40-25 has brightened the chances of seeing 111.50-112.00 in the next 2-4 sessions.
Aussie (0.7557) remains absolute quiet as the Australian markets are closed today. Expect the sideways trading in 0.7450-0.7600 to continue for the next week.
Dollar-Rupee (64.44) keeps oscillating in the range of 64.20-70. Immediate minor support comes at 64.40 from where it may bounce back to 64.60 once again but the broader oscillation in the range of 64.20-70 is expected to continue.
INTEREST RATES
Sharp rise in the German yields seen in the last 2-sessions on the Fresnch election reulsts. The 5Yr (-0.35%) and the 30Yr (1.07%) is up from -0.33% and 1.06% respectively while the 10Yr (0.334% is down from 0.3525. There is some more room on the upside for the yields to rise before testing the medium term resistance levels. Near term looks bullish.
The UK yields have fallen slightly yesterday but overall look bullish for the near term. The 5Yr (0.50%), 10yr (1.06%) and the 20YR (1.61%) are down from 0.552%, 1.111% and 1.655 respectively.
The German-US 2Yr (-1.93%) and the 10Yr (-1.94%) have broken above crucial resistances to move up sharply in the medium term. We will have to see if the resistance near 1.10 on Euro is able to bring down the yield spreads in the near term.
