STOCKS
Asian equities are up. Other global indices like the Dow and DAX have also bounced from their key supports last week and looks bullish in the near term. The Indian indices, which have been stuck in a narrow range in the past week looks likely to break the range on the upside and move higher in the short term.
Dow (26412, +269.25, +1.03%) has risen above 26250 and is bullish to test 26500. A pull-back from 26500 can take it lower to 26250 again. But the bias on the chart is bullish for the Dow to breach 26500 and rally to 26750 and 27000 in the short term.
DAX (11999.93, +64.73, +0.54) can extend its upmove to 12100 on a break above the immediate resistance level of 12030. A strong break above 12100 will negate the bearish view for a fall to 11800-11700 that we were expecting last week. The index can then target 11200 and then probably reverse lower again.
Nikkei (22190.71, +320.15, +1.46%) has risen past the key 21930-21950 resistance region which will now act as a good support. While above this support region, the outlook will be bullish for a further rally to 22500-22600.
Contrary to our expectation for a fall to 3150 and 3130, (Shanghai (3244.13, +55.51, +1.74%) risen back sharply above 3200. The index can revisit 3280 levles again in the near term.
Sensex (38767.11, +160.10, +0.41%) is still stuck in between 38500 and 39000. But the bias on the chart is turning bullish for it to break 39000 and rally to 39400-39500 in the near term.
Nifty (11643.45, +46.75, +0.40%) has held very well above 11550 all through last week. The possibility is turning high for the Nifty to break above 11700 and move higher to 11750 and 11800 in the coming days.
COMMODITIES
Gold and silver can see some more dip in the near term. Copper is mixed and range bound. Oil has to hold above a key support to move further higher, else a corrective fall is on the cards.
Gold (1289) remains pressured on the downside. While below 1300, the outlook is negative for a fall to 1285 and 1290. A break below the immediate support level of 1287 can trigger this fall.
Silver (14.95) can fall to 14.85 and 14.80 while it trades below 15.
Copper (2.94) has been volatile between 2.88 and 2.96 over the last couple of weeks. A breakout on either side of 2.88 or 2.96 will decide whether copper will go up to 3.0 or fall to 2.84.
Brent (71.30) has been stuck in between 70.30 and 72 over the last one week. As long as the support in the 70.50-70.30 region holds, the outlook is bullish in the near term for a test of 72.70 – the 61.8% Fibonacci retracement resistance.
WTI (63.55) has a crucial support at 63.40 which has to hold to keep the bullish view intact for a test of 66. If WTI breaks below 63.40, a fall to 63 or even 62 cannot be ruled out. retracement resistance level.
FOREX
Most currencies are trading at crucial, could-go-either-way junctures. This week can see them pick up a trend one way or the other. Lots of economic data releases this week.
The Dollar Index (96.83) is looking weakish, contrary to expectation of a rise towards 97.25/35. Or it could still be bullish given Support at 96.62, the 21-week Moving Average. Crucial to see if this holds or breaks this week.
The Euro (1.1313) is at a crucial juncture now. It broke above 1.1300 on Friday to see a high of 1.1324, but then retreated from there. It might either move up some more towards stronger Resistance at 1.1400 (proving our bearishness), or it could dip back to 1.1250-1200. We just have to wait to see which way it goes.
The Euro-Yen (126.69) might have the potential to move up towards 128, but for that it has to remain above 126.00-125.50 and also rise to 127 over today-tomorrow.
Dollar-Yen (111.99) has immediate intra-day Resistance at 112.50 but that might break for a rise to stronger, longer-term Resistance at 113.50 during the week, where some profit-taking can come in.
The Aussie (0.7178) is testing important Resistance at 0.72. If last week’s rally sustains, it may try to move further up towards 0.73 over the next couple of weeks.
Chinese Yuan (6.7091) trades below immediate Resistance at 6.72. Further dip below 6.70 will accentuate overall bearishness towards 6.67-66. Else, there can be some chances of a small rally towards 6.75-78. Trend might become clear today itself.
Looking at the 3-day Candles, Dollar-Rupee (69.1550) appears to be totally indecisive between 68.50-69.75. Intra-week Support at 68.75, Resistance at 69.35-50. Might be good to stand aside and watch.
INTEREST RATES
Both the US and Euro bond yields have risen on Friday and are closer to key near-term resistances. Both the US and Euro yields can fall after testing those resistances.
The US 2Yr (2.40%), 5Yr (2.38%), 10Yr (2.56%) and 30Yr (2.98%) yields have risen sharply on Friday. But key resistances are ahead at 2.59% for the 5YR and 3.0% for the 30Yr yields which is likely to cap the upside and push the yields lower again.
The German 5Yr (-0.37%), 10Yr (0.058%) and 30Yr (0.703%) yields have risen on Friday while the 2Yr (-0.554%) remained stable. The 10Yr has resistance at 0.07% and the 30Yr has it at current levels and the yields can reverse lower in the coming days.
The 10Yr GOI (7.5654%) yield has risen sharply on Friday breaking above 7.55%. But a resistance is at current levels. A strong break above it is needed to take the yield further higher to 7.60% and 7.63%. A pull-back from current levels may drag the yield to 7.53% and 7.50% again.
