STOCKS
Dow (21029.47, -0.24%) dipped slightly yesterday but made an intra-day low at immediate support levels of 21009. If it holds today, we could see a bounce back towards 21100 and higher; else failure to bounce from current levels could open up lower levels of 20900-20800.
Dax (12598.68, -0.24%) is quite and could remain sideways within the narrow 12700-12485 region for the coming sessions (broad range of 12800-12400).
Shanghai (3129.22, +0.62%) is trying to rise eventually targeting levels near 3170 and higher for the near term. Immediate resistance is visible near 3195 from where a short dip is possible in the medium term. For now, Shanghai looks bullish.
The downside limit for Nikkei (19650.86, -0.14%) may be limited to 19450 in the near term whereas the upside seems to be open towards 20000. A test of 19450 is possible before we see a sharp bounce from there towards current levels.
Nifty (9624.55, +0.20%) is rallying upwards as expected and could move towards 9700-9800 as we have been mentioning in the past few editions.
COMMODITIES
Overall mostly all commodities look bearish for the near term and could move lower in the next few sessions.
Gold (1259.74) may fall in the near term as resistance near 1275-1280 seems to be holding well now. A fall towards 1240 or lower to 1220 could be possible in the coming sessions. Near term looks bearish.
Silver (17.23) is trading lower today and could come off towards 17.00 in the coming sessions. A bounce back from 17 could be expected thereafter.
Copper (2.57) has also come off from short term channel resistance near 2.62/65 and while that holds, Copper could come down towards 2.45/40 in the medium term.
Brent (51.61) is trading below immediate resistance near 52.65/70 and while that holds, a dip towards 50 is possible in the next 2-3 sessions before again bouncing back towards 53. On the other hand, WTI (49.30) may also re-test levels near 48.50 in the next few sessions. Near term looks bearish.
FOREX
The chances of the year-end inflation figure coming short of the Fed forecast have increased with the deceleration seen in the Fed’s preferred price measure and weighs heavy on the Dollar Index (97.42). The higher resistance of 98.00 may stand firm now and a gradual decline towards the month low of 96.80 can be expected in the coming sessions.
Euro (1.1175) has tested and bounced back sharply from our support of 1.1100 just as expected and the journey for 1.1300 may have resumed.
There’s no directional preference for Dollar Yen (111.15) in the near term as it keeps oscillating in the sideways range of 110-112 and any attempt to gauge any directional clue from these oscillations may turn out to be deceiving. Better to wait for a breakout.
The pre-election volatility continues for Pound (1.2826) and the possibility of the ruling Conservative party losing majority in the coming election keeps Pound soft but it has managed to hold above the major support of 1.2750-00 so far, keeping the upside chances of seeing 1.2900-1.3000 still open. Repeat – 1.2750-00 is the make or break support level for the near to medium term trend.
Aussie (0.7453) is another clueless currency which may continue its sideways consolidation in the range of 0.74-0.75 for another 2-3 days.
Dollar Rupee (64.66) tested the upper end of the near term range of 64.35-70 yesterday. The rest of the week may see the price contained in the same range with outside chances of testing the major resistance of 64.85 as the bias remains bullish as long as the support of 64.40-35 holds.
INTEREST RATES
The US yields are headed lower in the near term. The 10YR (2.22%), 30YR (2.89%) and the 5Yr (1.77%) are all down from 2.24%, 2.90% and 1.78% respectively and looks bearish on the near term charts. But note that there is an immediate support on the medium term charts which gives some hope of an immediate bounce back in the near term.
The German yields are trading low and looks bearish for the near term. The 10Yr (0.29%) and the 30Yr (1.14%) are down from previous levels of 0.31% and 1.16% respectively.
The German-US 10YR (-1.93%) and the German-US 2Yr (-2.04%) are trading just above support levels and while that holds, the yield spreads could move up in the near term along with the Euro.
The US-Japan 10Yr (2.18%) is also heading towards support just below current levels and while that holds, we could see a bounce back towards 2.2% or higher. But before that the yield spread and Dollar Yen could dip for a couple of sessions.
The 10Yr GOI (6.80%) has fallen from levels near 6.81% seen yesterday. We continue to look for levels near 6.75-6.70% in the medium term.
