STOCKS
Global equity indices are either stable or undergoing a short term correction. Support levels are visible and could be tested this week before a bounce is seen in the medium term.
Dow (26430.57, -0.21%) continues to trade above 26000 support and is likely to move up in the near term towards 27000.
Dax (11977.22, +0.25%) has support in the 11800-11600 region and could produce a bounce in the medium term towards 12200.
Nikkei (23450.31, -0.081%) is heading towards support at 23000 and while that holds, a bounce back towards 22400 or higher is possible. Failure to sustain above 23000 could make it vulnerable to fall towards 22000. While above 23000, near term looks bearish with some chances of a bounce back soon,
Shanghai (2726.88, +0.22%) has support at 2700 and lower at 2600. For now the index may sustain above 2700 and trade sideways. But possibility of a fall towards 2600 cannot be negated just now.
Nifty (10301.05, -0.45%) dipped some more yesterday closing at immediate support levels near 10300. While 10300 holds, Nifty could bounce back towards 10500 in the near term; else it could continue to fall to test lower support at 10000 by next week.
COMMODITIES
Brent (84.74) and WTI (74.41) are trading higher again today. While above 82 and 73 respectively, the Crude prices look bullish in the near term. Note resistances at 86 and 77 respectively which if holds, we could see some sideways consolidation in Brent (within 82-86) and in WTI (within 73-77) for the coming sessions.
Gold (1192.60) is stable near 1190 unable to decide on further direction just now. A slow and steady move towards 1210 is possible in the near term. Overall the sideways consolidation is likely to continue for some more sessions.
Copper (2.8030) is again headed towards 2.85. A sustained break above 2.85-2.90 is needed to trigger further up move in Copper prices. Failure to do so could bring the prices back towards 2.70 in the near term.
FOREX
Watch resistances at 1.155, 1.325 and 0.72 on Euro, Pound and Aussie respectively.
Dollar Index (95.60) : A rise towards crucial resistance on weekly candles near 96.5 in this week / by next week is quite likely. Note that resistance on weekly line chart was slightly lower near 95.5 which is already broken – a week close above 95.5 could hence be a bullish indicator for the weeks ahead.
Euro (1.1511): While below 1.155, it should test 1.14 (support on weekly candles) by next week. For that, it would need to decisively break below interim support near 1.1475 on daily candles. Alternatively, if 1.155 is breached, then we might have to start looking at the upside.
Dollar Yen (112.99) : There is some interim support near 113 (on daily line chart) for Dollar Yen. A break below that should take it to trendline support at 112.0-111.5 by next week. If this lower support is also broken, it could confirm that Dollar Yen has topped out near 114.5. The horizontal resistance near 115 might just hold strong.
Euro-Yen (130.06) has channel resistance on daily candles near 131.5 and immediate support provided by the 21 weeks MA near 129.15. Current preference is for a fall to 127 in the next couple of weeks.
Pound (1.3161) seems to be breaking above immediate resistance near 1.3150 on daily candles. Higher above, there is resistance near 1.325 as well. Also, note immediate support at 1.30. While it remains below 1.325, preference is for a break of 1.30, leading to a fall to 1.28 (lower support) in the next couple of weeks.
Aussie (0.7115) has broken above 0.71 and could now move up towards resistance near 0.720 which could keep the upside capped. Note that the 21 weeks MA near 0.733 is an important level, whose break could make us start looking only at the upside for Aussie.
Dollar Rupee (74.395): Look for Resistance at 74.50-60-70-80 today. If this Resistance also breaks, then 75.50 would come into play. If the Resistance holds, some profit-taking back down towards 74.00-73.70 might be seen.
INTEREST RATES
India 10 year yield (8.08%) against expectation, has again gone up above the 8% level. Higher up, there is crucial resistance near 8.20%-8.25% which should keep the upside capped.
Last week’s US employment data showed that the US unemployment rate has fallen to a 48 years low of 3.7% – this figure has resulted in a rise in US Yields. Yesterday’s session however saw some consolidation after new highs were reached.
The US 10 Year (3.21%) and 30 year (3.37%) both came off from resistances in the 3.25%-3.30% and 3.40%-3.45% regions respectively. If the decline sustains for a few sessions, then the above resistances might become important levels to watch in the near term.
The 10 Year German-US spread (-2.66%) is likely to stay below -2.60% in the near term and gradually move down towards -2.80% over the next few weeks.
German 10 year yield (0.55%): Resistance on medium term chart near 0.57%-0.60% should make the yield dip towards 0.40% from here.
Japan 10 year yield (0.15%) could be bullish towards target levels of 0.20%-0.25% in the next 2-3 weeks.
