STOCKS
Dow (20896.61,-0.11%) continues to remain in a sideways consolidation within 20780-20980 region as mentioned least week. Immediate support near 20780 is expected to hold in the near term. Only in case of a break below 20780, we may expect a fall towards 20600-20400 levels.
Dax (12770.41,+0.47%) is just above support near 12690 and while that holds, we could see a bounce back towards 12800 and higher in the near term. Near term looks bullish while above 12690.
Shanghai (3088.62, +0.17%) tested 3020 last week before bouncing back sharply from there. It is trying to inch up towards 3130-3170 levels which could be tested in the near term before a sharp fall is seen.
19610-20010 is the immediate region of trade for Nikkei (19842.15, -0.21%) in the near term. Only a break out on either side of the range could give a clear directional view for the medium term.
Nifty (9400.90, -0.23%) came off from levels below our resistance zone of 9460-9500 and while that holds, we could expect a correction towards 9270 in the coming sessions before a bounce back towards 9400. .
COMMODITIES
Muted price action has been seen in Gold (1229) as the same traded within the 1220-31 region last week. If the rise continues we may possibly see a test of 1255-65 levels in this week. A failure to break above 1265 could keep the price range-bound in the 1220-1265 regions. A Close below 1220 could open up 1186 levels as well.
Similar kind of trading pattern has been seen in silver (16.49) also. The scrip is highly oversold in near term chart, thus a possibility of a rise towards 16.80-95 levels can’t be ruled out.
Copper (2.53) is hovering around its crucial resistance of 2.53-55 and if these levels break then we might see a bounce towards 2.60 regions in very short term time period. We will remain bearish on copper while t is trading below 2.67-72 levels in the medium term time frame.
Sideways consolidation in the broader ranges of 49.50-51.50 for Brent and 46.80-49.30 for WTI continues as expected. Holding above the interim resistances of 51.50 in Brent and 49.30 in WTI implies strength in oil prices in the extreme short term. Still, the bulls will be assured of strength of Brent (51.40) and WTI (48.25) only when a firm closing above 53 and 51 are made by both Brent and WTI respectively.
FOREX
Slightly worse than expected US Retail Sales and Inflation data has weakened Dollar. It may take another couple of sessions to clear up if it is only a correction or a complete reversal.
Dollar Index (99.22) has lost the bullish momentum with a break below 99.25 it remains to be seen if a recovery emerges from 99.00-98.85 or not. Trend neutral in the range of 99.00-100.00 and a clear break from this range is required to get a directional move.
Similar loss of bullish momentum is visible in Dollar Yen (113.34) too, though it is still trading above the near term support of 113.10. The price action here may determine if another bounce towards 115.00-50 will come or not. Prefer to wait for a session and watch.
It has been a day of very sharp gains for Euro (1.0931) last Friday but for sustained strength, it needs a clear break above 1.0940-50. Otherwise a turnaround to the downside can’t be ruled out. With EURJPY (123.86) also stalling around an intermediate resistance around 124.20-50, it would be prudent to watch the price action of Euro at the current levels before taking a firm directional call.
Pound (1.2892) bounced back from the previous week’s low near 1.2825 and kept the trend still up in line with expectations. It has been moving sideways roughly in the range of 1.2800-1.3000 which may take a few more sessions before resolving.
Aussie (0.7395) tested the upper end of the range of 0.7325-0.7425 but the sharp rejection from there implied persistent weakness. As discussed last week, a resumption of the major downtrend may be expected this week for the target/support of 0.7300-0.7290 from where a significant recovery may be expected.
Dollar Rupee (64.30) ended the week in an indecisive manner as it closed with no specific directional clue. The narrow range of 64.25-45 is the neutral zone as a break above 64.45 will denote strength and a break below 64.25 may provide fresh downside momentum. It must be noted that the Indian CPI for April has come at 2.99% against 3.81% in March.US April CPI has just come at 2.99% which brings the inflation differential down to 0.79% only, making Rupee depreciation more difficult.
INTEREST RATES
The Japan yields have come off a bit from near term channel resistance as mentioned last week. The 5Yr (-0.13%), 10Yr (0.04%) and the 30Yr (0.83%) are down from -0.12%, 0.05% and 0.84% respectively and may come off in the near term. Immediate movement could be on the downside.
The UK yields continue to fall as expected. The 5yr (0.50%) could head towards 0.40% while the 10Yr (1.09%) and the 20YR (1.66%) could head towards 1% and 1.5% respectively.
The German-US 2yr (-1.98%) is rising again but is trading within very narrow region of -1.95% and -2% and a break on either side would indicate the further direction in Euro. The German-US 10yr (-1.93%) is headed higher and could rise towards -1.90% in the next few sessions.
