STOCKS
Overall stocks are mixed. While Dow, Dax and Shanghai look bullish, Nikkei may consolidate in the near term. Nifty looks potentially bearish for the coming sessions.
Dow (20611.86, +0.52%) continues to rise vertically and is headed towards 20800 in the near term. Thereafter we could possibly expect a short corrective dip towards 20400-20200 levels.
Dax (11793.93, +0.19%) closed at slightly higher levels. While support at 11600-11650 holds, the index has potential to move higher in the coming sessions. We keep open the higher target levels of 11930-12000 as mentioned yesterday.
Nikkei (19349.24, -0.46%) is finding it difficult to move above 19500 just now and is stuck in the broad 19620-18870 region. It may continue to remain within the said zone for some more sessions in the near term.
Shanghai (3211.19, -0.06%) tested the daily trend-line resistance at 3235.98, coming off from there yesterday. While the resistance holds, the index could come off to 3200 and then bounce back again towards 3225-3250 levels in the medium term.
Nifty (8724.70, -0.77%) saw its first sharp fall this year coming down from levels near 8821. In case it continues to fall further, we may see a fall towards 8700-8635 levels in the near term before bouncing back towards 8800.
COMMODITIES
Almost all the commodities are mute with no discernible activity.
Gold (1226.46) has tested the support of 1215 as expected and the following bounce from the support may push it to 1240-50 once more but any fresh strength in Dollar (100.93) may keep it stable in the range of 1215-40 if not outright weaken.
As discussed yesterday, Silver (18.016) remains in an uptrend with no real momentum. If the Gold-Silver ratio (68.55) rallies from the current levels as expected, then any weakness in Gold due to Dollar strength may trigger a sharper decline in Silver. Immediate resistance remains unchanged at 18.10.
Nothing changed for Brent (55.70) and WTI (53.06) in the last session. Repeat – both are trading exactly at the midpoint of their respective ranges of 53-58 and 50-55 with no directional bias and this horizontal movement may continue for a few more days.
Copper (2.746) is trading quietly in the range of 2.70-85 which may continue for the next 5-10 days.
FOREX
Dollar is correcting after a 10-day rally but if the immediate support holds, Dollar may firm up again and the majors may weaken.
Dollar Index (100.93) has made4 a high at 101.76 and corrected just as expected. It is currently testing the support near 100.85 which must hold to keep the near term trend up and push it higher towards 100.50-75 once more.
Euro (1.0615) has tested and bounced from the support area of 1.0530-00 just as expected but unless it can sustain above 1.0625-35, it may decline to sub-1.06 levels once again.
Dollar-Yen (113.86) has corrected after registering a swing high at 114.95, almost identical with our target of 115. If the immediate support at 113.65 holds, then a fresh bounce to 114.50 and higher can be seen.
Pound (1.2457) has tested the lower end of the narrower range 1.2400-1.2600 before bouncing back to maintain the sideways mode. No greater expansion than 1.2350-1.2700 is expected in the rest of the week.
Aussie (0.7707) is struggling near the major resistance zone of 0.7750-0.7800 as expected and a failure to rise above 0.7800 soon may push it to 0.7650-30 or even lower levels.
As long as Dollar Rupee (66.90) manages to hold above 66.80, the chances of a recovery to 67.10+ can’t be ruled out but now there may be slightly higher chances of a fall towards 66.70-50, but that could be the end of the current decline.
INTEREST RATES
The US yields continue to rally. The 5YR (1.99%), 10Yr (2.48%) and the 30Yr (3.07%) are all trading higher from 1.97%, 2.44% and 3.04% respectively. But we may soon see a pause or a corrective dip in the near term.
The US 10-5YR (0.50%) has come off by 1bps and could be headed towards 0.49-0.48% in the next few sessions before bouncing back.
The UK yields have bounced well and are heading towards resistance levels visible on the near term charts. Near term looks bullish followed by a sharp fall in the medium term.
