STOCKS
The Dow (24207.16, +141.57, +0.59%) saw a high of 24288.61 yesterday, rising into the 24100-500 Resistance region mentioned yesterday. It is highly Overbought in the near term now and we continue to be cautious at these levels, as they could invite profit-taking.
Similarly, while the DAX (10931.24, +39.45, +0.36%) has risen some more yesterday, we think Resistance at 11000 could trigger profit-taking.
Watch Resistance at 2627 (21-MA on the Weekly Line chart) on the Shanghai (2570.42). A break thereof is needed to confirm the anticipated long-term bullishness.
The Nikkei (20442) dipped a bit yesterday, but as suggested, remains a “buy on dips” up to 20000-19800.
The Sensex (36321.29) and Nifty (10890.30, +3.50, +0.03%) are trying to break past the mentioned Resistances at 36500 and 11000. Let us watch if they are able to do so.
COMMODITIES
Overall commodities are stable. A sharp movement is likely to be seen in the near term.
Brent (61.03) and Nymex WTI (52.03) are stable just now and are well holding below the immediate resistances at 62 and 54 respectively and could dip slightly before resuming the rise back to higher levels. The rest of the sessions this week could be stable.
Narrow and small movements are seen in Gold (1294.60) for the last few sessions. Immediate support is seen at 1290 on the daily candles which if holds could possibly take the price towards 1300-1320 levels in the near term. At the same time note resistance near 1300 on the 3-day line chart which indicates a fall towards 1250 in the medium term. We need to watch price action near current levels to get clarity on immediate direction.
Silver (15.63) could fall towards 15 after some ranged movement within 16.0-15.50 region is seen. Long term down channel remains intact as seen on the weekly candles.
Copper (2.6715) is trading sideways in the 2.62-2.68 region and if it sustains above 2.62, it could try to move up towards 2.70 and higher in the near term. A break above 2.70 is needed to trigger further bullishness towards 2.80/85. Else a fall back towards 2.60/55 could be on the cards. Long term support on the line charts indicate a rise in the longer run.
FOREX
Rise in Dollar Index (96.12) and corresponding fall in the Euro (1.1389) could keep the pressure on for a couple of sessions. Euro could test 1.1350-1.13 on the downside while Dollar Index could be limited to 96.50. Only if the Dollar Index breaks above 96.50, could we expect a sharp rise back towards 98 while Euro could come off towards 1.12.
The Euro-Yen (124.12) managed to rise from levels near 123.6 seen yesterday. While there is enough room for a fall towards 122.80-122.00 levels; the pair needs to rise above 125.20 to move higher towards 127-128. While below 125.20, view remains bearish.
Dollar Yen (108.99) seems to be tilting to the upside. While 107-108 holds, Yen could weaken towards 110 on the upside. Near term looks bullish for Dollar-Yen.
Pound (1.2874) and Aussie (0.7168) have dipped slightly. While Pound faces resistance near 1.2930, Aussie has some room towards 0.73. In case Copper rises past 2.70 on the upside, Aussie could resume rising towards 0.73 in the near term. Pound if holds below 1.2930 could be bearish towards 1.2750 in the next few sessions.
USD-CNY (6.7641) has dipped a bit but looks bullish towards 6.80 in the near term.
Dollar Rupee (71.25) closed higher breaking our expected near term resistance at 71.15. While the pair manages to trade higher it could target 71.40/60 levels by next week if bullish momentum continues. Else a small dip could be seen towards 71.00-70.90 before again rising higher. The NDF is trading at 70.90 indicating a possible gap down or session opening below 71.25 today. Also note decent resistance near 71.25 (38.2% retracement of a fall from 74.50 in Oct’18 to 69.23 in Jan’19) which could hold for a session or two.
INTEREST RATES
US Yields have been creeping up for the last few days and the Curve has been getting steeper at the Far end. Now, there is Resistance coming up near 0.60% on the 30-5 Spread (0.53%) and near current level (0.35%) on the 30-10 Spread. The 30Yr (3.07%) itself has Resistance near 3.09% and could start coming down faster than the rest of the Curve in the coming sessions.
The German-US 10Yr Spread (-2.50%) has been coming off from -2.44% and might dip towards -2.55% in the coming weeks as the German 10Yr (0.22%) could dip towards 0.20% or even lower. If so, it might be a little bearis.
The US-Japan 10Yr Spread (2.73%) has moved up from 2.64% at the beginning of the month and could move up some more towards 2.75%
The 10Yr GOI (7.5633%) has immediate Resistance at 7.59%, the 38.2% retracement of the fall from 8.18% to 7.22%. Maybe it holds. In case it breaks, the next upside target would be 7.70%.
