STOCKS
Dow (20943.11,-0.16%) has come off as expected and could test levels near 20780 in the near term before bouncing back from there. A test of higher levels near 21000 may be delayed for now.
Dax (12757.46, +0.07%) is all set to test 13000 as soon as possible. It is almost stable just now but could continue to move up in the coming sessions.
Shanghai (3043.97, -0.29%) is coming off as expected and could soon test 3000 on the downside. Near term looks bearish.
Nikkei (19929.27, +0.15%) has slowed down as it is heading towards important resistance levels near 20010. A rejection is expected in the next week.
Nifty (9407.30, +0.97%) made an intra-day high of 9415 yesterday, closing the day on a higher note. The 9400 resistance has shifted to 9500 and the 9460-9500 would be crucial levels to watch in the near term.
COMMODITIES
Muted price action has been seen in Gold (1220) as it is trading within the narrow trading band of 1220-31. If these levels hold on a closing basis then sideways consolidation within 1220-1260 continues. Need to keep a close watch on the price action in Dollar Index (99.47) which could give some cue on further Gold direction. We will remain bearish while it is trading below 1256-60 levels and a close below 1220 could open up 1186 levels as well.
Similar kind of trading pattern has been formed in Silver (16.23) also with a strong bearish bias. But as the scrip is highly oversold in near term chart, a possibility of a rise towards 17 levels can’t be ruled out.
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 regions. But we will remain bearish on copper while t is trading below 2.67-72 levels.
As we have mentioned in our yesterday’s morning briefing, a decrease (-5.2M Barrel) in U.S crude oil inventory had helped Brent (50.42) and WTI (47.53) to close higher. The current trading ranges for Brent and WTI are 49.50 – 51.40 and 47 – 49 respectively.
FOREX
Dollar strength prevails with the weakness in majors expected to continue.
Dollar Index (99.60) is gradually advancing towards our target of 100.00-50 with support coming up at 99.35-25.
This Dollar strength keeps the Yen (114.16) weak as Dollar Yen enjoys the higher levels without much selling pressure. As long as the pair trades above 113.30-10, the possibility of further rally towards 114.60-115.00 remains open.
Euro (1.0877) is yet to find its floor as the decline may extend to 1.0800 levels with the immediate upside capped at 1.0940-60.
Pound (1.2942) stands very quiet as it waits for the BOE interest rate decision today. Immediate resistance and support are modified to 1.3040 and 1.2860. Larger trend in the medium term remains up.
Aussie (0.7347) is finding it difficult to rise above 0.7400 as the trend remains firmly down. With the resistance of 0.7400-30 limiting the upside, the lower target of 0.7300 may be achieved in the next few sessions.
Dollar Rupee (64.62) met our near term target of 64.70-75 in the previous session. While a pause can be expected in the range of 64.40-75 digesting the recent gains, the pause may be followed by further rise towards 65.10-25 if a sustained move above 64.75 is seen.
INTEREST RATES
The US yields have moved up a bit. The 5Yr (1.93%), 10Yr (2.40%) and the 30Yr (3.03%) are up from levels near 1.90%, 2.38% and 3.00% respectively.
The German-US 2yr (-2.03%) has broken above the immediate support and may head lower indicating a fall in euro in the near term. In case this proves to be a false break, we would see an immediate rise back above -2% in the next couple of sessions.
The Japan-US 10Yr (2.35%) is slowly inching up and is pulling up Dollar yen along with itself. A rise towards 2.40% is possible leading Dollar-Yen towards 115 levels in the medium term.
The Japanese yields are all in a short term rally and looks bullish for the coming sessions
