STOCKS
The Japanese markets are closed today. All other major markets are trading very quietly, mostly waiting for the FOMC comments due tonight and the second round of the French Presidential election on Sunday.
Dow (20949.89, +0.17%) has been stuck in a very narrow range of 20900-21070 for the last 6 sessions but the underlying bullishness can push the index higher towards the resistance of 21400 in the next few days.
Dax (12507.90, +0.56%) has broken into new ground this week as it trades above the 2015 high of 12390. The current rise may extend to 12600-700 before the next bout of profit booking comes.
Shanghai (3140.04, -0.12%) keeps trading in the range of 3100-3180 in line with expectations with 3100 standing firm as a major support. The sideways oscillation may keep the index in this range for the rest of the week and a directional move may be seen next week only.
Nifty (9313.80, +0.10%) has been stalling near the resistance area of 9370-9430 for the last 5 sessions with increasing risk of a correction in the medium term. While 9430 may be tested in the near term, keep any eye for a probable selloff from that area.
COMMODITIES
Muted price action had been seen in Gold (1257) as market is waiting for today’s FOMC statement and FED fund rate announcement at 11.30 P.M IST.Immediate support is at 1239. Buyers will take every dip as a further opportunity for buying while it is trading above 1239. A close above 1264 could open up 1285, which could be a level where the price action has to be checked to assess the chances of further bounce to 1305.
Silver (16.78) is Oversold on the near-term charts and trading within the range of 16.50-17.02.The bias will remain bearish while it is trading below 17.50 levels.
Copper (2.61) has shown some strength as it manages to trade above its crucial support at 2.57. Recent trading range could be 2.60-2.69 and upon 2.69, higher resistances of 2.72 -80 can come into consideration.
Brent (51.73) and WTI (48.03) both had moved lower in line with our expectation. They are within their trading ranges of 50 -52. and 46.20 – 48.80 respectively. Brent may consolidate within these levels for few more sessions though the possibility of a corrective bounce towards resistance can’t be ruled out.Today we have U.S Crude inventory at 8.00 P.M IST with an expectation of a decrease of 3.3M barrel, which could be supportive for oil prices. But we will remain bearish while Brent and WTI are trading below 53 and 51 levels respectively.
FOREX
The markets wait for the FOMC comments tonight and the US jobs data on Friday to provide clues for the near term direction of Dollar. Euro and Pound remains the strongest majors with further upside possibilities emerging.
No change in the technical state for either Dollar Index (98.93) or Euro (1.0934) yet as Euro refuses to yield ground even after the initial rejection from the resistance of 1.0950-60. Coupled with the inability of Dollar to rise above the immediate resistance of 99.35-50, the chances of Euro rising past 1.0960 towards 1.10 and higher are increasing instead of the expected correction towards 1.08. In that case, Dollar may retest the major support of 98.50-00.
Dollar-Yen (112.03) has traded in the range of 111-112 for the last 2 sessions as expected but the bulls may be anxious with the proximity of the resistance of 112.30 and 112.90. From any of these resistances, a correction towards 111.00-110.50 can be expected in the next few sessions.
Pound (1.2943) is gathering fresh steam every passing session as it gets closer to our initial target of 1.3000 and now not only 1.3150 comes into consideration, even 1.3350-1.3400 may be not out of question in the coming days.
Aussie (0.7518) has shot above the immediate target of 0.7500 and now needs a break above 0.7560 to extend the rise towards 0.7600-75. Till the break comes, it may consolidate in the range of 0.7450-0.7550.
Dollar-Rupee (64.2125) ended the first session of the month in the range of 63.95-64.35 as expected. The horizontal trading in this range is expected to continue for another couple of sessions as the FOMC meet may not trigger a lot of activity in the markets.
INTEREST RATES
The US yields are range bound before FED rate announcement. The 2Yr (1.26%),5Yr (1.8%), 10YR (2.28%) and the 30YR (2.97%) are all down by 3-4 bps.
The US T Bond 10-5 Yr Short term Yld Spread (0.485) may find resistance at current levels and could come down towards 0.46-0.45 levels.
