STOCKS
Overall the equities are mixed. Dow and Shanghai looks bullish while Dax and Nikkei are sideways. Nifty could be on the verge of seeing a sharp fall in the near term.
The US markets are closed today on the eve of Washington’s birthday. Dow (20624.05, +0.02%) has moved up slightly and a small dip from 20800 can be expected in the near term. A break above 20800 could turn very bullish towards 21000 or higher. Near term looks strong.
Dax (11757.02, -0.22) is finding some difficulty in breaking above the previous high of 11893.08 and at the same time is holding well above the 11500-11400 support region. Unless we see a break on either side, the index may continue to trade sideways in the near term.
Nikkei (19207.30, -0.14%) is also stuck in the 19000-19620 region and may remain so for some more sessions. We could see a rise to 1950 over today and tomorrow.
Shanghai (3214.20, +0.38%) may bounce back from support at 3200 to rise again towards 3225-3250 levels. Near term looks bullish.
Immediate support near 8800 seen on the Nifty (8821.70, +0.50%) which could take it towards crucial resistance at 9000. A sharp corrective fall is expected in the coming sessions either from current levels or after testing crucial resistance near 9000.
COMMODITIES
Gold (1234) may test the support of 1215 due to fresh strength in Dollar (100.95). It may keep it stable in the range of 1215-40.
Long term (since April 2011) trend line resistance for Silver (17.94) poised at 18.35 region. Unless the same has been penetrated on an closing basis, silver may be range bound between 18.35-17.60.
Nothing changed for Brent (55.78) and WTI (53.43) 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. Brent-WTI ratio (1.63) is also moving downwards, may find support at 1.00.
Copper (2.71) is trading within the range of 2.60-83 with no directional bias.
FOREX
With the US market closed today, the forex market is expected to remain quiet for the day. This week, the volatility may come down.
Dollar Index (100.95) has bounced back from 100.40, a bit short of our target/support of 100.20 and a break above 101.25-40 may confirm a near term bottom at 100.40. The next 2-5 sessions may find Dollar trading in the range of 100.40-101.70.
Euro (1.0609) failed to retrace more than 50% of the decline from 1.0829 to 1.0519 and came down once again. Now a break below 1.0580 may extend the fall to 1.0500-1.0450 levels.
Dollar-Yen (113.08) has been only mildly affected by the January Trade Balance (-¥1086.9b versus -¥625.9b expected)missing expectations and bounced back from 112.60, slightly below our support of 112.85. But to hold above the low of 112.60, it must rise above 113.50 in the next couple of sessions.
Pound (1.2412) is trying to expand the near term range of 1.2400-1.2600 to the lower side in line with our expectations. The medium term upside chances remain open till the support at 1.2350-40 is protected.
Aussie (0.7670) is testing the near term support at 0.7650. It remains to be seen if it manages to bounce from the support or not as a break below 0.7650 may weaken the uptrend considerably. The major resistance remains unchanged at 0.7750-0.7800..
The GST council was successful in passing only a single draft law on Saturday but three other crucial laws were stuck. Dollar Rupee (67.01) may open slightly higher today with the trend up above the near term support at 66.90
INTEREST RATES
The US yields may possibly remain stable near current levels before coming off below immediate supports. The 5Yr (1.90%), 10YR (2.2%) and the 30Yr (3.02%) are almost stable and may remain so for another 2-3 sessions.
The Japanese 5YR (-0.10%) and the 10Yr (0.089%) have fallen disappointing trade figures came out this morning. However, the 30YR (0.917%) has risen from levels near 0.88% and looks bullish for the near term.
The UK yields are all trading lower. The 5YR (0.393%), 10Yr (1.3020%) and the 20YR (1.80%) are down by 1bps and could fall some more before bouncing back in the next few sessions.
The Indian 10YR GOI (7.00%) closed higher last week and we may expect it to trade in the 6.88-7.04% region for the coming sessions.
