STOCKS
Overall stacks are mixed. Dax and Shanghai looks bullish while Dow and Nifty could pause near resistance levels. Nikkei is in a contraction and could remain range-bound.
Dow (20821.76, +0.05%) is trading higher and testing immediate resistance at current levels. A pause near 21000-20890 region is expected in the near term. A short dip towards 20000 is possible before continuing the rally.
Dax (11804.03, -1.20%) came off from 12031 levels but while the 11680 level acts as an immediate support, it could bounce back towards 11930-12000 in the near term,
Nikkei (19060.19, -1.16%) move higher towards 19400 again over today and tomorrow. Clear contraction is visible in the daily charts and the resistance on the weekly charts may indicated limited upside for the near term. The near term contraction could keep the index range-bound for some more time. (Refer to FOREX section below)
Shanghai (3250.10, -0.10%) is in a near term uptrend and could rise towards 3275-3300 in the coming sessions. 3300 could act as an intermediate resistance which could hold in the medium term.
Nifty (8939.50, +0.14%) is trading just below the crucial resistance at 9000. A sharp dip is possible from 9000. Only a break above 9000, if seen could negate the near term bearish view.
COMMODITIES
Recent weakness in Dollar index has boosted almost all the commodities across the board. Gold (1257) has broken its bullish channel resistance of 1247. Immediate resistance is at 1274 and from there it may correct towards 1244.Short term outlook is bullish. Only a close below 1215 could hamper its upward momentum. Silver (18.35) is hovering around its long term trend line resistance of 18.38.We might see short term correction towards 18 but will remain bullish until it is trading above 17.75. We have US FOMC member speech at 9.30 pm IST, which may add some more clarity towards the future price action of Dollar Index.
Copper (2.68) is also holding its crucial support of 2.60. A close above 2.72 could open up 2.81.We have US Core durable good order report at 7.00 pm IST,which may add some volatility into the copper price movement.
Brent (56.14) was almost unchanged within its recent price range of 54.20-57.5 but WTI (54.32) moved a bit higher. A close above 54.50 could take the towards 56.40.
FOREX
The US president is expected to clarify his stance and possible steps for the highly awaited tax reforms and infrastructure spending tomorrow night. The markets may be quiet till then but major directional moves can be expected from 28th Feb night. Almost all the currencies are in an indecisive state now with no clear bias.
Dollar Index (101.13) spent the previous week in the range of 100.40-101.70 just as expected. The range has narrowed down to 100.85-101.85 for the current week and which may see a breakout and a major move within the next couple of sessions. Bias neutral at this point.
Euro (1.0566) is marking time within the range of 1.05-1.06 in line with expectations with a higher chance of a break below 1.05 while below 1.07. Any major move in Dollar Index is expected to influence Euro to the same degree too.
Dollar-Yen (112.19), contrary to expectations, has declined to the near term support zone of 112.00-111.50 as the uncertainty over the US policies continue. It is not clear at this point if this support zone will hold and trigger a bounce or give in for the lower levels of 110.00. A breakout from the 3-month range 18700-19500 of Nikkei (19060.19, -1.16%) may be decisive for Dollar Yen too. Keep an eye.
A failed attempt to sustain above the resistance 1.2525 has modified the near term range for Pound (1.2418) to 1.2350-1.2600, in which it may spend the next 2-5 sessions with no directional bias. The near term support zone of 1.2400-1.2350 is expected to hold.
Aussie (0.7688) has neither broken above the major resistance of 0.77-0.78 nor dropped below the support of 0.7650. It may spend another couple of sessions at least in this range of 0.7650-0.7800 before deciding on a direction.
Dollar-Rupee (66.83) has weakened with a close below 66.90 and now it may go either way from the current levels. Drop to 66.65 and rise to 67.00 are both equally likely.
INTEREST RATES
German and Japan spreads with the US 10Yr yield indicates bearishness in the near term which could lead to Euro weakness and Strength in the Japanese Yen but we need to wait for some confirmation from the price itself.
The German-US 2Yr (-2.11%) looks as if it is ready to dive in to lower levels in the near term breaking below the previous low of -2.11%. While the spread looks bearish it could indicate a fall in Euro in the near term.
The US-Japan 10Yr (2.25%) has broken below the immediate support at 2.28% and if this moves down further, it could also indicate a fall in Dollar-Yen in the coming sessions.
The US yields have fallen sharply as expected, breaking below the immediate supports and could be headed lower for another session before pausing. The resistances on the longer term charts are holding well.
The Japanese yields have fallen sharply, breaking below immediate supports. The 5Yr (-0.15%) and the 30YR (0.81%) could fall some more while the 10Yr (0.06%) could pause near current levels.
