STOCKS
Dow (20894.83, +0.43%) and Dax (12619.46, -0.15%) are almost stable trading slightly lower than the previous close. Dow is testing decent support just below current levels and could either bounce back or continue to trade sideways in the near term while Dax has come off from important resistance and could have some more room on the downside before any reversal is seen. A fall towards 12400-12300 is possible in the near term in Dax while Dow may try to move up towards resistance at 21000-21200. Both looks bearish for the medium term.
Shanghai (3072.46, -0.10%) is in a perfect channel visible on the 3-day and weekly candle charts. The channel support has held well and could help Shanghai bounce back towards 3200 in the next couple of weeks. While support near 3000 holds, we could negate bearishness for the near term.
Nikkei (19653.96, -0.12%) looks bearish while resistance at 20000 holds. If not an immediate fall, the index could trade sideways within the 19400-20000 region before moving down.
Nifty (9438.25, +0.11%) is holding well above 9350 support but at the same time is not able to move above 9530 just now. Some more sideways consolidation is possible for the next couple of sessions before some directional clarity is visible.
COMMODITIES
While Dollar Index (96.78) is well on its course towards 96 with no sign of strength yet, Bullion has strengthened against Dollar yesterday. Gold (1262) and Silver (17.16) are trading well above their crucial support at 1247 and 16.93 and trading at their respective highs. But we would like to be on selling side while gold is trading below 1280 and silver below 17.50 levels due to their short term overbought condition.
Copper (2.58) has found resistance at 2.62 levels. Only above 2.62, higher resistances of 2.68-72 can come into consideration. In the medium term 2.55 are going to be a strong support now but a close below that could open up 2.44-35 levels as well.
We have been tracking the resistance of 54.20 in Brent and 51.20 in WTI for the last few days and they have held, driving the energy pack down as expected. Both Brent (53.60) and WTI (5.73) have already lost approx 20 pips in the opening hour and the chances of more sideways movement in the range of 52.50-51.20 for Brent and 49.17-51.20 for WTI are stronger now. Both Brent and WTI are overbought in short term time frame thus chances of a fall towards their respective supports can’t be ruled out.
FOREX
Dollar Index (96.89) remains extremely weak as it gets closer to our target/support of 96.50-00 which is expected to be met this week. On the other hand, a strong Euro (1.1249) is not far away from our initial target/resistance of 1.1300. If any profit booking is seen in Euro either near 1.1300-30 or near the higher long term resistance of 1.1400-50, then corresponding short covering can be expected in Dollar near 96.50 or 96.00. Better to watch them as a pair at this point.
Dollar Yen (111.18) shows no intention to make any significant move as it continues to trade sideways in the range of 110-112 which may extend for the rest of the week.
Pound (1.2984) is in an interesting position as the trend remains up but the upward momentum is still lacking. The chances of a sudden sharp rise to 1.3200 can’t be ruled out while the probability of further sideways consolidation in the range of 1.2850-1.3050 remains in consideration too. Wait for clarity but no bearish scenario can be considered while above 1.2850.
Aussie (0.7494) is testing the resistance of 0.7500 above which the downside target of 0.7300 will be negated and higher upside targets of 0.7550-0.7600 may open up.
Dollar Rupee (64.55) broke below 64.50 but the intraday bounce from the interim support of 64.42 and closing above 64.50 raises suspicion about the bearish scenario. Any bounce to 64.67-72 may rob all clarity and bidirectional possibilities may be revived. We prefer to wait for clear signals.
INTEREST RATES
The US yields could remain near current levels in the coming sessions with a preference of upside in the near term. Overall yields look bullish for the medium term.
The UK-US (-1.16%) has come off slightly but the previous resistance could now act as an important support which could possibly indicate an upside for the yield spread in the medium term. If that happens, we could turn bullish for Pound in the longer run.
The German-US 10 Yr (-1.85%) is headed towards resistance near -1.75% and while it moves up, Euro could test 1.13 or higher in the medium term.
