STOCKS
Nifty, Dow, Dax and Shanghai look bullish just now with resistance coming up above current levels. We could possibly see a rise in the next 3-4 sessions before a sharp corrective fall. Nikkei is almost range-bound and could be stuck to the immediate channel.
Dow (20624.05, +0.02%) was closed yesterday but could move towards 20800 tonight. . As mentioned yesterday, we need to see if it turns down from 20800 or breaks higher.
Dax (11827.62, +0.60%) has moved higher from previous levels but needs to break above 11893 to move higher towards 12000. It could possibly take a couple of sessions to move higher.
Nikkei (19339.63, +0.46%) is rising in line with our expectation ad could move towards 19500 just now. Resistance is seen at higher levels near 19620 which is likely to hold in the medium term.
Shanghai (3244.02, +0.13%) has moved up to test 3250 as expected. A small dip here could be expected before it starts rising towards 3275-3300 levels in the longer term. Overall trend is bullish.
Nifty (8879.20, +0.65%) recovered losses seen on Friday coming back to levels above 8850. It could test crucial resistance near 9000 from where a sharp corrective fall may be expected. Immediate view is on the upside.
COMMODITIES
Gold (1232) may test the support of 1215 due to fresh strength in Dollar (101.16).
Silver (17.91) is also trading within its previous range of 17.60-18.35. But as long as copper is holding above 2.65-70 region, its difficult to expect fresh low in Silver.
Brent (56.26) and WTI (53.75) both are trading within their respective ranges of 53-58 and 50-55 with no directional bias and this horizontal movement may continue for a few more days.
Copper (2.75) is trading within the range of 2.60-83 though it is still holding its upward trend line support since October 16.
FOREX
The market is searching for clues if the Fed will hike rates in Mar’17 or not while Dollar is strengthening on the back this continued speculation.
Dollar Index (101.20) is trading close to the interim resistance of 101.25-40 and a break above 101.40 may take it to the major resistance of 101.70-90. The immediate bullish sentiment is in line with our expectations and may keep Dollar in the range of 100.40-101.70 for the rest of the week.
Euro (1.0584) is weakening as expected and may test the interim support of 1.0550-40 in the way of 1.0500-1.0450 levels if 1.0550 fails to contain the decline.
Dollar-Yen (113.53) is trading above the resistance of 113.50 which confirms a very short term bottom at 112.58 with increasing chances of testing the major resistance near 114.80-115.00.
Pound (1.2453) is in a contracting phase for the last few sessions and a breakout from the range of 1.2375-1.2525 may emerge soon. Bidirectional possibilities open at this point so bias is modified to neutral.
Aussie (0.7674) has been testing the significant near term support 0.7650 for the last 3 sessions but yet to bounce back. Repeat – 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.
Dollar Rupee (66.92) tested the immediate support of 66.90 below which the major support band of 66.70-50 come into play while 67.15-20 can be tested again if 66.90 holds. It remains to be seen in the opening hour today if 66.90 holds or breaks. Bias neutral at this point.
INTEREST RATES
The US yields were closed yesterday but could open on the upside today. The 5YR (1.93%), 10YR (2.45%) and the 30Yr (3.05%) may rise towards 1.96%, 3.00% and 3.10% respectively in the near term.
The German-US 2Yr (-2.07%) has fallen sharply from levels near -2.00%. It could possibly extend the fall towards -2.11%, seen previously on 28th Dec’16. In that case we could expect some more fall on the Euro, given the rise in the Dollar Index above 101. (Refer to FOREX section above)
The Japanese yields are rising. The 5YR (-0.10%) could rise a little more towards -0.08% in the next couple of sessions before coming off from there.
