STOCKS
Dow (21080.28, -0.01%) is almost stable near previous levels and could head towards resistance near 21170 as mentioned last week. The index could trade within the 21170-21000 region for at least the next couple of sessions before any sharp directional move is seen.
Dax (12602.18, -0.15%) is now in a pause mode and is trying to attempt some lower levels. Overall 12400 continues to remain the downside limit for the near term while 12800-12850 is an important near term resistance which could hold for sometime. View remains sideways to bearish for the near term.
Shanghai (3110.06, +0.07%) has scope on the upside and could move up in the medium term. While support near 3000-3020 holds, medium to long term looks bullish.
Nikkei (19713.21, +0.13%) is trading higher today. Immediate support seen near 19600-19400 which could keep the index higher in the coming sessions. A period os sideways consolidation is possible for the near term.
Nifty (9595.10, +0.90%) saw a sharp rally as expected. We may look for levels near 9700-9800 in the medium term.
COMMODITIES
Today U.S market will remain close due to Memorial Day thus we may witness less volatility in the commodities section. We are doubtful about the sustainability of Gold (1266) beyond 1275 levels. If Gold could not hold its ground beyond these levels, it could fall towards its crucial support of 1249, which could be a level where the price action has to be checked to assess the chances of further fall to 1230 regions. A failure to hold 1249 could keep the price range-bound in the 1220-1250 regions for a short term time period.
Similar kind of trading pattern has been seen in Silver (17.35) also. The recent trading range could be 17.02-17.75 and a close below 17 levels could open up 16.50 levels as well.
Copper (2.53) has found resistance at 2.62 levels and trading within the narrow range of 2.45-2.55 levels. Only above 2.62, higher resistances of 2.67-72 can come into consideration. In the medium term 2.44 are going to be a strong support now but a close below that could open up 2.40-35 levels as well.
Brent (52.12) and WTI (49.76) are holding their respective supports of 51.20 and 49.50 but the same is not implying strength. We will be assured of strength only when a firm and sustainable closing above 54.60 and 53 are made by both Brent and WTI respectively. A daily close below the respective supports could open up 49.50 levels for Brent and 48 for WTI as well.
FOREX
Volatility may be very low today due to the markets closed in US, UK and China today. It remains to be seen if the ECB president Draghi’s speech in European Parliament today can trigger any significant moves in Euro.
Euro (1.1165) remains in the normal corrective mode. While the major support 1.1100-1.1075 is expected to trigger a turnaround to the upside, if the interim support zone of 1.1150-40 holds, then the recovery may come sooner and in a sharper manner.
A recovery in Euro in the next couple of days may weaken Dollar Index (97.48) again which is trading above our resistance of 97.45 but the strength is suspect so far. If it fails to sustain above 947.45-55 in a firm manner, then a reversal towards 97.00 can be seen once again.
Dollar Yen (111.37) has been consolidating sideways in line with expectations in the narrow range of 110.80-112.00. As discussed last week, while above important support at 110, there is scope for an upmove towards 114.0-114.5 in the medium term. Keep an eye on the immediate support of 110.80 which if holds, can push the price up sharply in the next few sessions. EURJPY (124.33) needs to hold above the support of 124.00 to aid Euro and weaken Yen.
Pound (1.2814) is feeling the UK election jitters as the June 8 vote nears. A sharp crash came in the last session as the gap between the conservative party and the opposition Labour party shrank to 5 points only from the 24 points seen early in the month. The bulls need the major support 1.2750-00 to hold but it will need the Conservative party lead to widen again. The polls can keep the currency volatile till June 8.
Aussie (0.7443) has weakened as expected and may trade sideways for 2-3 sessions in the range of 0.74-0.75.
Dollar Rupee (64.44) may remain in a consolidative mode. Further strength in Nifty could take Rupee towards 64.00 else a bounce back towards 64.70 is expected.
INTEREST RATES
The Japanese yields are moving lower and could test support below current levels. If the supports hold, the yields may bounce back to higher levels in the coming sessions. Medium term looks bullish.
The UK yields are also trading low and could move down further in the near term. Thereafter the yields may go into a sideways mode for a few sessions before bouncing back to higher levels.
The German-US 2Yr (-2.02%) and the German-US 10Yr (-1.91%) are coming off from the medium term resistances and while that holds, the yield spreads could come down further possibly pulling down Euro also to lower levels. In that case, further upside for Euro could be limited just now.
The US yields are trading sideways and could remain stable near current levels for sometime. On a medium term, there could be some rise from current levels.
