STOCKS
Dow (21080.28, -0.01%) was closed yesterday. As mentioned yesterday, 21200 is an important resistance for the near term. In case it breaks on the upside, the index could rally towards 21400-21600 else a fall back towards 21100 is possible in the coming sessions.
Dax (12628.95, +0.21%) is stable and may continues to remain sideways within 12800-12400 (broad region of trade for at least this week)
Shanghai (3110.06, +0.07%) looks bullish in the near term towards 3170. A small dip to 3070 is also possible before the index starts to rise higher.
Nikkei (19576.19, -0.54%) seems to be confused on which direction to take. Immediate movement within 19500-20000 is possible but only if it breaks on either side, can we confirm on further direction. For now, some sideways consolidation is possible.
Nifty (9604.90, +1%) has been rising in line with our expectation. 9700-9800 is on the cards for medium term.
COMMODITIES
As this moment, the Support at 1248 has held on intra-day basis and Gold (1270) has moved up a bit. Given that the Support at 1248 has held, some more rise towards 1275-80 is possible. For the near term, the market seems to be trading in a 1248-80 range now and the medium term range is now 1220-1280. The big question is whether we will see a rise past 1280-1300 or not in June.
Nothing new to add in Silver (17.43) also as the recent trading range is 17.36-87 and the medium term range is now 16.69-17.87. Both Gold and Silver are entering in a short term overbought zone thus chances of a correction can’t be completely ignored.
Copper (2.55) is hovering around it’s support area of the short term range of 2.55-2.62 with no directional clarity. Only above 2.62, higher resistances of 2.67-72 can come into consideration. A close below 2.55 levels could open up 2.44-46 levels as well.
Brent (52.20) and WTI (49.84) are hovering around their respective pivots of 52.77 and 49.54 of their short term trading ranges of 51.32-54.60 and 47.50-51.20 respectively. We will be assured of strength of Brent and WTI only when a firm and sustainable closing above 54.60 and 53 are made by both of them. A daily close below the respective supports could open up 49.50 levels for Brent and 47.50 for WTI as well.
FOREX
The dovish sentiment expressed in the ECB chief Draghi’s statement about the European bond buying program has kept Euro (1.1128) weak but the proximity of the major support 1.1100-1.1075 and the lack of downside momentum still point towards the possibility of a turnaround this week. In a similar vein, the strength of Dollar Index (97.67) looks suspect even above the interim resistance of 97.55 and the near term upside may be limited to 98.00 at most.
Dollar Yen (110.87) keeps oscillating in the range of 110-112 and may continue that for a few sessions more. The bullish options remain open till 110 holds but the prolonged weakness in EURJPY (123.38), which may 122.80-60 or even 122.00 before bouncing back, raises questions about the upside chances. If a break below 110 is seen, then a resumption of the larger downtrend may be confirmed. Waiting for clarity.
The major support of Pound (1.2818) around 1.2750-00 holds for now and short covering may push the currency higher to 1.2900. The volatility is expected to remain high till the June 8 election with 1.2750-00 being the make or break support level for the near to medium term trend.
Aussie (0.7424) has been trading sideways in the range of 0.74-0.75 as expected and may continue that for the rest of the week.
Dollar Rupee (64.49) remains in a consolidative mode as expected which may continue for another couple of sessions. The immediate range is expected be 64.35-64.70.
INTEREST RATES
The UK 10Yr (1.01%) is testing support near current levels and could bounce back in the near term while the 20Yr (1.57%) and the 5Yr (0.46%) have some more scope on the downside to test medium term supports.
The Japanese yields have risen slightly and could move up in the near term. The US-Japan 10Yr (2.20%) could be headed towards 2.15% in the near term.
The resistances coming from mid-2015 have held well for the German yields and the yields have come off sharply in the last few sessions. The yields look bearish in the near term. The German-Us 10YR (-1.94%) and the German-US 2Yr (-2.04%) have fallen sharply but could face some support just below current levels from where a bounce is possible for the near term.
The 10Yr GOI (6.8125%) may rise towards 6.85% or higher in the near term. Immediate support is visible in the 6.75-6.70% region.
