STOCKS
Dow and Dax are trading higher; Dax and Shanghai looks bullish for the near term. Nikkei is consolidative. Nifty has crucial resistance just above current levels.
Dow (20775.60, +0.16%) and Dax (11998.59, +0.26%) are trading higher. We need to watch price action of Dow near 20800 which is an immediate resistance and could produce small rejection in the near term. On the other hand, Dax looks bullish towards 12090- 12100 levels.
Nikkei (19312.07, -0.35%) is almost stable and lacks momentum just now. Stuck within the 19000-19620 region, iwould be difficult to get any immediate directional clarity unless we see a break on either side of the range.
Shanghai (3251.59, -0.30%) is trading perfectly within the daily up-channel and while that holds, we could see a rise towards 3275-3300 in the coming sessions with some small intermediate dips. Overall trend is up for the near term.
Nifty (8926.90, +0.21%) has come up to test the previous high near 8968 seen in Sep’16 and while that could act as an immediate resistance, we could see a corrective fall from current levels towards 8700. Only a break above 9000, if seen (less likely)can we negate an immediate correction from current levels.
COMMODITIES
Gold (1237) and Silver (17.98) both are trading within their sideways channel of 1217-47 and 17.60-18.35 respectively with no directional bias. A break below 1226 (Gold) and 17.90 (Silver) could open up the lower bands of the channels.
Copper (2.71) was unable to close above its pivot of 2.76 of its recent trading range of 2.60-83, though it is still holding its upward trend line support at 2.68-70 since October 16. A close below that could open up 2.55-60 levels.We have US unemployment data at 7.00 pm IST, which could influence the price of copper as well as silver.
Brent (56.29) and WTI (54.06) both are trading within their respective ranges of 54-59 and 50-56.Today we have US crude inventories data at 9.30 pm IST, which may add volatility.
FOREX
Although the FOMC Minutes yesterday talked about a rate hike "fairly soon", US Yields (10Yr 2.41%) have dipped a little and the US Dollar Index (101.37) has also paused for a while just below 101.50. The overall Dollar strength still dominates while above 100.50, but a rise past immediate crucial Moving Average Resistances near current levels need to be broken in order to propel the Dollar Index higher towards 102+.
The Euro (1.0550) indeed saw a limited downside at 1.0500 yesterday and has bounced slightly. While the overall trend suggests an eventual break below 1.0500 while the Euro stays below 1.07, a couple of days of sideways movement between 1.05-06 could be seen.
Dollar-Yen (113.25) has good Support at 113.00 and can rise to 114+ while that holds, in line with the view expressed yesterday. The Euro-Yen (119.60) could test 120.20 in the near term (today).
Despite attempts to the upside, there has been weakness in the Pound (1.2445) since yesterday as it has been unable to rise above 1.2525. A break below 1.2400 could be bearish towards 1.2250 next week. A two-way possibility here.
The Aussie (0.7683) may be finding Resistance near 0.7700 in the near term. Stronger Resistance also available at 0.7800. Upside might be limited while these hold.
Dollar-Rupee (66.97) could see a bit of a rise if the Sensex/ Nifty were to fall today, especially since the RBI seems to have been buying continously above 66.90. The market is closed for Mahashivaratri tomorrow.
INTEREST RATES
The US yields have come down to re-test immediate support on the near term charts. A break below the support levels could initiate a sharp fall in the near term. Else we could possibly see some more sideways movement before a break on the downside.
The German-US 2Yr (-2.11%) has bounced slightly from -2.13% and in case it fails to rise immediately from current levels, we could see a further fall in the spread favoring Dollar strength in the near term. In that case, Euro could move down at a faster pace. (Refer to FOREX section above)
The Japanese yields have fallen. The 5YR (-0.117%), 10Yr (0.08%) and the 30Yr (0.85%) have fallen from levels near -0.115%, -0.09% and 0.87% respectively. The 5Yr and the 30YR has support at current levels and could possibly recover in a few sessions while the 10Yr may fall a little more in the near term.
The 10YR GOI (7.0964%) has been rising sharply and could test immediate resistance at 7.10%. Failure to fall from 7.10% could turn very bullish towards 7.2% in a short span of time. Surprisingly Dollar-Rupee has lost its correlation with the GOI in the recent sessions and the rise in the GOI is unable to pull up Dollar-Rupee to higher levels. So the GOI may possibly not act as an important cue for Rupee in the near term.
