STOCKS
Emmanuel Macron wins the final round of the French elections to become the youngest president, winning by a fair margin of 65% to 35% against Le Pen, as per the preliminary results released yesterday.
Dax (12716.89, +0.55%) moved up half a percent to make fresh highs rising towards 12750 as mentioned last week. While the rally continues, we may see a rise towards 13000-13500 levels in the coming sessions. Near term looks strongly bullish.
Dow (21006.94, +0.26%) has moved up to close above 21000 and while that sustains we could expect a rise towards 21100-21200 levels in the near term. While above 21000, we may negate an immediate correction to 20800 levels. Near term is likely to remain bullish.
Shanghai (3082.69, -0.66%) has broken below our expected 3080 levels and while it is unable to bounce back immediately, we could see an initiation of a fresh fall towards 3000 and lower in the medium term. Near term looks bearish.
Nikkei (19795.19, +1.80%) opened with a gap up after the long holiday, breaking above 19620 on the upside. While it holds above 19620, we may expect a rise towards important resistance at 20000.
Nifty (9285.30, -0.80%) may test supports visible near 9250 and 9200 respectively in the next couple of sessions before again bouncing back towards 9400. A break below 9200 is needed to confirm a down move in the medium term. For now, a short dip to 9200 is expected before a bounce back.
COMMODITIES
Gold (1231) closed at itd week’s low on last Friday. It could test support at 1230 from where a bounce back is expected in the near term. If 1230 holds on a closing basis then sideways consolidation within 1230-1270 continues. Need to keep a close watch on the price action in Dollar Index (98.59) which could give some cue on further Gold direction. We will remain bearish while it is trading below 1265-70 levels and a close beow 1230 could open up 1186 levels as well.
Similar kind of chart has been formed in Silver (16.41) also as it is trading below 17 levels. The bias will remain bearish while it is trading below 17.50 levels though a possibility of a rise towards 17 levels can’t be ruled out due to short term oversold condition.
Copper (2.49) has found resistance at 2.54 levels. Only above 2.68, higher resistances of 2.80 can come into consideration. In the medium term 2.44 are going to be a strong support now but a close below that could open up 2.40-35 ;eves as well.
The energy segment is seeing mild profit booking at lower levels. The interim resistance of 49.20 in WTI and 51.30 in Brent might be tested within couple of sessions. As discussed in last week, the preference may remain bullish in the extreme short term due to oversold condition but the overall bias will remain bearish while Brent (49.84) and WTI (46.87) are trading below 53 and 51 levels respectively.
FOREX
The better than expected US NFP data and the defeat of the far-right candidate Le Pen against the Centrist Macron in the French Presidential election seem to have cancelled each other out as the majors remain in the same quagmire with no directional visibility.
Dollar Index (98.73) is trading just 9 pips away from the levels of 98.82 seen in the previous morning despite the US Jobs report release and the French election result coming in the meanwhile. Neither the support of 98.50-20 has been broken nor has the resistance of 99.50 been overcome in the last 11 sessions which keeps us still waiting for a breakout for directional clarity.
Similar indecision is visible in Euro (1.0976) too, which is almost unchanged in the last 24 trading hours. A Macron win was expected to strengthen the currency but despite the win coming true, it has been unable to rise above the major resistance of 1.10 so far and just like Dollar Index, we wait for a breakout, either above 1.10 or below the support of 1.0890.
Dollar Yen (112.76) is in the same boat as the other majors mentioned above as it wanders just below the major resistance of 113.00. Still, the collapse of volatility signals a trending move to emerge within this week and the success or failure at 113.00 may determine the near term path. Waiting and watching continues.
Pound (1.2954) has made a high at 1.2984 in the last trading session, very close to our immediate target of 1.3000, above which opens up higher targets of 1.33-34 but it may take time. Support comes at 1.2880 and 1.2830.
Aussie (0.7397) is trying to find its feet after testing the support of 0.7370 but it is not clear yet if it is going to be successful or not. As discussed on last report, failure to hold 0.7370 may open up much lower levels of 0.7300 but the chances of a bounce back can’t be fully discarded yet.
The weekly close of Dollar Rupee (64.37) took place just below the immediate resistance of 64.40 and the current NDF rate of 64.30 points to further sideways consolidation in the range of 64.00-64.40 till a break above 64.40 materializes this week.
INTEREST RATES
The German yields are all trading higher after the preliminary results show a win for Macron against Le Pen in the 2nd round of the French elections. The 5yr (-0.30%), 10Yr (0.417%) and the 30Yr (1.19%) are all up from levels near -0.35%, 0.415% and 1.15% respectively. But the medium term charts show decent resistance near current levels and while that holds, the yields could come off after the next 4-5 sessions.
The US yields are trading higher. The 5Yr (1.90%), 10Yr (2.36%) and the 30Yr (2.99%) are trading higher from previous levels of 1.88%, 2.35% and 2.98% respectively.
The German-US 10Yr (-1.95%) and the 2yr (-2.03%) continue to trade above the immediate support levels and while they continue to move up, Euro could also move up in the near term. Note that 1.10 is a crucial levels for Euro and if that holds, the yield spreads could come off as well in the next 2-3 sessions. Need to keep a close watch on all of these.
The Japan-US 10Yr (2.34%) is moving up and while it is headed upwards, Dollar-Yen could strengthen in the near term.
