STOCKS
Dow (20975.78, -0.17%) tested 21050 on the upside before coming off from there. Some profit taking is possible in the 21050-21100 region just now with a possible extension of the current rise towards 21200. Some corrective dip is preferred for the medium term before continuation of the long term uptrend.
Dax (12749.12, +0.43%) has enough room on the upside nut we stick to our earlier target of 13000 which could be achieved over today and tomorrow. Thereafter a small dip is possible before moving higher in the longer run.
Shanghai (3082.87, +0.08%) is almost ranged within the 3100-3060 region and a break on the down side is needed to accelerate a fall towards 3000. Else some sideways consolidation is possible in the medium term.
Nikkei (19903.06, +0.30%) is close to testing our first target resistance near 20010 and while that holds, a small dip is possible back towards 19500. Else a sharp and sustained break above 20010 may take it higher towards 20800 in the longer term.
Nifty (9316.85, +0.03%) may continue to be trapped in the 9400-9260 region. We may possibly expect a sharper move in the next couple of weeks.
COMMODITIES
Recent strength in Dollar index had pulled down Bullion near their key support areas. Gold (1222) is hovering around its crucial support of 1220. Recent trading range could be 1187-1220. We will remain bearish on gold while it is trading below 1260 but chances of a short term bounce back towards 1240 can’t be ruled out due to oversold condition.
Silver (16.19) is trading within the range of 15.80-16.90.The bias will remain bearish while it is trading below 17.50 levels.
Copper (2.50) is hovering around its crucial support of 2.48-50 and if these levels hold then we might see a bounce towards 2.60 region. But we will remain bearish on copper while t is trading below 2.67-72 levels.
Brent (548.98) and WTI (46.18) both had moved lower in line with our expectation. They are within their trading ranges of 46.62-49.50 and 43.75-47.15 respectively. Brent and WTI may consolidate within these levels for few more sessions though the possibility of a corrective bounce towards resistance can’t be ruled out. We have U.S weekly crude inventory today at 8:00 pm with an expectation of decrease by 2 million barrels. If the actual figure could match the expectation then we might see some short term rally in both Brent and WTI.
FOREX
Dollar gathers strength and after a pause after the 3-day rally, may rise further which implies weakness for the majors. Indian currency segment is closed for the day due to Buddha Purnima.
Dollar Index (99.43) has broken above the resistance of 99.50, signaling a near term bullish reversal which may take it to 100.00-50 after the current correction ends by 99.25-00.
Euro (1.0894) has broken the support of 1.0880 before a minor recovery and now some more downside may be pending, with the possibility of sideways consolidation negated. The current bounce may be limited to 1.0940-60 from where the next rejection may come for the downside target 1.0800 levels.
Dollar Yen (113.77) has registered a high of 114.33 so far, close to our target of 114.60 but the higher targets of 114.60-115.00 may still be achieved if it manages to stay above the support of 113.30-10. Bias bullish till 113.10.
Pound (1.2946) remains in a sleeping mode though the bullish momentum is still intact. Immediate resistance is modified to 1.3030 and support comes up at 1.2900 and 1.2850.Repeat – bias remains bullish with a fair possibility of horizontal trading in 1.2850-1.3050 in the near term.
Aussie (0.7356) continues its downside journey with the upside for the week possibly limited to 0.7430. Target on the lower side remains unchanged at 0.7300.
INTEREST RATES
The US yields are all stable. The 10- 5Yr (0.47%) has fallen slightly and could come down to test 0.46-0.45% before bouncing back again
The German-US 2yr (-2.01%) is testing short term channel support and while it holds, we could see a bounce back towards -1.95% and if that happens, we could see a rise in Euro in the coming sessions.
The Japan-US 10Yr (2.35%) has reached our initial target and could now see a small dip in the next couple of sessions. This could pull down Dollar-Yen for a short time before rallying towards higher levels.
The rising UK-US 10Yr (-1.19%) indicates a rise in Pound too in the near term. The yield spread could move up towards -1.15% in the coming sessions.
