STOCKS
Dow, Dax and Nikkei may face resistances above current levels and could possible come off by the end of the week while Nifty and Shanghai looks bullish for now. Nifty is also heading towards crucial resistance from where it may come off sharply.
Dow (20269.37,+0.48%) is trying to move up. Immediate resistance is seen in the 20300-20400 region which could push off the index in the near term back towards 20000.
Dax (11666.97, +0.21%) is trading at important resistance of 11700 and could turn bullish towards 11820-11930 levels only on a break above current resistance. In case 11700 holds, we could see some consolidation in the 11700-11500 region again.
Nikkei (19500.91 +0.63%) could test 19615/20 on the upside before coming off slightly from there. Only on a break above 19620 can we shift our focus to higher levels for the near term.
Shanghai (3209.83, +0.41%) has broken above the immediate resistance at 3200 and is now headed towards 3225-3300 levels in the near term. The index looks bullish on the 3-day candle chart.
Nifty (8793.55, +0.17%) has created some room on the upside towards 8900 after consolidating in the last week. The index looks potentially strong towards 8900-9000 in the near term from where a sharp correction is possible.
COMMODITIES
Gold (1230.09) has held above 1220 to bounce a bit as expected and now may test 1240-50 in the next couple of sessions. It may oscillate in the range of 1220-1250 this week.
Silver (17.94) has rallied to the near term target/resistance of 18.00-10 sooner than expected but may stall and correct from these levels in the near term. A consolidation in the range of 17.50-18.10 may be more likely for the week.
Both Brent (56.73) and WTI (53.87) are approaching the higher end of their respective medium term ranges of 53-58 and 50-55. It remains to be seen if profit booking emerges at the higher levels once again, keeping the range intact.
Copper (2.81), contrary to expectations, enjoyed a huge breakout above the medium term resistance of 2.75-80 as the supply from the two largest mines of the world has been shut down. With this momentum, it may rise to 2.90-95 levels very soon.
FOREX
Not only the US equities but Dollar is also boosted by the Trump promise of a huge tax plan and a smooth meeting between the US President and the Japanese PM has weakened Yen.
Dollar Index (100.92) is testing the resistance of 101.00 for the second time in as many days which must be broken above to extend the rise to 101.75-102.00. The near term path depends on the congressional testimony of the Fed chair Yellen but the near term downside may be limited to 100.00 even if it fails to rise above 101.00 immediately.
Euro (1.0620) is trading near the previous week’s low of 1.0607 and may decline below 1.06 if Dollar manages to break above 101.00. The near term upside may be limited to 1.07 in case any short covering emerges.
Dollar-Yen (113.93) has been rising gradually for the last 3 sessions and may rally to 115-116 if it manages to stay above 113.50.
Pound (1.2488) is unaffected by the global cues at this point and it may continue the sideways movement inside the range of 1.2350-1.2700 for a few sessions more.
Aussie (0.7670) is trading at the higher end of the 6-day range of 0.76-0.77 but while the trend is still up, the proximity of the major resistance near 0.7750-0.7800 warrants caution as the chances of a sudden reversal can’t be ruled out.
Dollar Rupee (66.88) has managed to stay above 66.80 till now but it is yet to confirm a reversal. Unless it rises above 67.07 in the next couple of sessions, the possibility of a break below 66.80 may strengthen, bringing the long term support of 66.50-35 into consideration and we may have to abandon our preferred bullish view.
INTEREST RATES
The US yields have risen from immediate supports on the daily near term charts but while crucial resistances hold, the medium term outlook remains bearish. 3.10-3.25% levels on the 30Yr (3.02%) and 2.50-2.75% on the 10Yr (2.43%) are important resistance zones to keep an eye on.
The UK-US 10Yr (-1.08%) has fallen sharply from resistance near -0.90% and could come off a little more in the next few sessions pulling down the Pound also to lower levels.
The UK yields have risen slightly but the longer term charts look potentially bearish in the near term. The 5Yr (0.45%), 10Yr (1.35%) and the 20YR (1.83%) may fall some more in the coming sessions.
The German-US 2YR (-2.01%) has fallen exactly in line with our expectation and while the spread continues to move down, the Euro could also fall in the near term. Look at Currencies section above)
