STOCKS
Dow (21008.65, -0.10%) is trading low but while above 20900, there is still some scope of a bounce towards 21170. Else a fall towards 20800 is inevitable.
Dax (12615.06, +0.13%) tested 12700 yesterday but came off sharply to close lower. The charts indicate there could be some more of sideways consolidation in the near term within 12700-12500 region.
Shanghai (3106.21, -0.35%) came off from 3145 and is trading low today. The fall may extend to 3070 before again picking up upside momentum.
Nikkei (19841.40, +0.97%) moved up sharply targeting levels of 20000 again. But overall ranged movement within 20000-19450 is possible unless a sustained break on either side is seen.
Nifty (9621.25, -0.03%) could pause near 9650 for a couple of sessions before again resuming the rally towards 9700-9800. Overall near term looks sideways to bullish.
COMMODITIES
Gold (1270.00), contrary to expectations, has risen to test the resistance zone of 1275-85. The price action here will determine by the next week if a major bearish reversal is seen from the current levels or another rally to 1295-1300 before any decline comes.
Silver (17.34) has been forming a contracting triangle in the narrow range of 17.20-47 for the last 3 sessions which hint at a rise to 17.60-70, contrary to our bearish expectations.
Copper (2.57) remains almost unchanged which remains bearish below the short term channel resistance near 2.62/65 and the chances of a decline to 2.45-40 remains open but it could be prudent to be prepared for a sudden turnaround to the upside in the medium term.
Brent (51.15) is recovering after making a low at 50.21, very close to our target of 50.00 and now may rise to 52.70-53.00. 50.00-49.70 remains the immediate support zone. WTI (48.72) has overshot our target of 48.50 by registering a low at 47.72 and now it may recover to 50.00 levels if Brent recuperates to 52.70-53.00.
FOREX
Dollar Index (97.00) has achieved our initial target of 96.80 but the trend still remains firmly down as long as it remains unable to rise above the last swing high of 97.80 and the long term support of 96.50 may be tested in the coming days.
Euro (1.1240) has rallied as expected as it takes a breather around the current year high of 1.1267 but the rise may soon resume for 1.1300.
Dollar Yen (110.95) shows no particular intent for any directional move yet as it keeps oscillating around 111.00, exactly in the middle of its range of 110.00-112.00. As discussed yesterday, it’s better to wait for a breakout as any attempt to gauge any directional clue from these oscillations may turn out to be deceiving.
Our initial target of 1.2900 for Pound (1.2873) has been met and while our next target of 1.3000 may be achieved in the next few sessions, the chance of a prolonged phase of sideways consolidation in the broader range of 1.2750-1.3000 is brightening. Repeat – 1.2750-00 is the make or break support level for the near to medium term trend.
Aussie (0.7390), contrary to expectations, has broken below the support of 74.00. If a recovery above 74.00 is not seen immediately, then it may be dragged to the previous swing lows near 0.7325.
Another subdued session for the Dollar Rupee (64.50) with a narrower intraday range for the day as it spent the trading hours in the band of 64.49-57. Neither the support of 64.40 or the resistance of 64.75-85 was tested, providing no fresh clue about the next directional move. We keep waiting for the volatility to expand, triggering a breakout from the range of 64.40-85.
INTEREST RATES
The US 10-5Yr (0.45%) has come off without testing the higher levels of 0.475%. While trading lower, it may move towards 0.42% in the coming sessions.
The US yields are trading low. The 10YR (2.21%) and the 30Yr (2.87%) have fallen from levels near 2.22% and 2.89% respectively and look bearish for the near term.
The German-US 2Yr (-2.03%) and the German-US 10Yr (-1.91%) have both bounced from immediate support levels as expected along with the rise in Euro. While the yields still look bullish, we could expect some more upmove this week.
