STOCKS
Equities in the G3 (USA, Europe and Japan) have rallied as expected, but China and India could be vulnerable to some downside.
As expected, Support at 24250 is holding well enough on the Dow (24640.24, +1.46%). A further rise to 24750-25000 might be thought of.
Even the DAX (11354.72, +1.45%) saw a good bounce yesterday, imparting greater strength to the Support at 11000. We may now look for 11600 while above 11200 and 11000.
The Nikkei (21856.69, +0.19%) has also just risen above 21800 and could move up to 22100-200 if the rally sustains, which might happen.
As it turns out, the Nifty (10628.60, +0.97%) managed to rally a bit yesterday and avoid further near-term bearishness. However, important Resistance at 10725 could still push the Nifty down all over again, unless it is broken. The corresponding Resistance on the Sensex (35354.08, +1.07%) comes in at 35600 and also has the potential to push the market down unless broken.
As cautioned, the Shanghai (2586.71, +0.42%) could be a loss leader and we may have to be prepared for a fall towards 2550 or even 2400.
COMMODITIES
Precious metals are trading lower today while crude prices have risen a bit.
Although Brent (60.16) and WTI (51.26) might have lower supports near 56 and 47.50 respectively, the crude prices have seen a decent rise from lower levels seen yesterday. Brent could test the earlier support turned resistance near 62 on the upside while a possibility of testing 56 remains intact. WTI could also test 53 on the upside this week before coming off from there. A break above 62 and 53 respectively is needed to initiate some more upside for the Crude prices going forward.
Gold (1222) is trading just below immediate resistance near 1230 but is yet to see a sharp rejection just now. If a sharp fall is not seen from here just now, the price could attempt to eventually break on the upside after seeing some stable movement in the 1218-1230 region for a few sessions. A fall below 1218 could take it lower towards 1210-1208 before bouncing back towards 1230 again.
Silver (14.20) is headed downwards and could target 13.80 before again bouncing back towards 14.
Copper (2.7490) has also come off and could head lower to 2.65 in the coming sessions before it bounces back from there. Near term looks bearish.
FOREX
Euro (1.1333) tested a high of 1.1384 yesterday but again came off from there. It has decent resistance zones at 1.136-1.138 and higher up at 1.140-1.142, which should keep the upside capped in this week. A further fall below 1.13 in the week looks possible.
Dollar Index (97.05) has immediate support between 96.75 to 97.00. While above 96.75, it should rise towards resistance on daily and 3 day line chart near 97.50-97.75 in coming few sessions.
Dollar-Yen (113.45) has risen to test levels near 113.5 as expected. It can now rise further in the near term towards 114.0-114.2 – seen as resistance on daily candles and daily line chart.
Pound (1.2812) – Some support might be emerging for the Pound near 1.28 on daily candles. It could range between 1.2800-1.2875 for the next 1-2 sessions and then break on the downside towards 1.27 after that.
Aussie (0.7223) – While below immediate resistance on daily candles near 0.725, Aussie could move lower towards 0.719 in this week.
Euro-Yen (128.61) – While below resistance on daily candles near 128.75, it could move lower towards 128 in the next 1-2 sessions. With Dollar Yen looking bullish towards 114, Euro would need to become bearish towards 1.12 for Euro Yen to break below 128.
Dollar Rupee (70.875): Dollar Rupee may test 71.30 on the upside before seeing another decline towards 70.20/40 again in the near term.
INTEREST RATES
Decent bounce in the US 2Yr (2.82%) and 10Yr (3.06%) suggesting that Supports at 2.80% and 3.00-05% respectively are holding in the near term at least. Now, the Supports would break either if the US GDP data comes in a little weaker than expected on Wednesday or if any of the Fed members start becoming dovish ahead of the Dec FOMC. Else, the Supports may continue to hold ahead of the FOMC.
German yields are more or less near Friday’s levels. The Germany-Italy 10Yr Spread (-2.90%) has Resistance near current levels of -2.90% and could move lower towards -3.5% while that holds, keeping the Euro weak in the near term.
The 10Yr GOI (7.7257%) has not broken below interim Support at 7.70% as yet, but should be overall bearish for 7.65-7.60% and lower while below 7.80%. That said, maybe the near term could see a bit of an uptick in the 10Yr GOI yield, especially if the US Bond yields move higher.
