STOCKS
Equities like the Dow and Nikkei may consolidate before moving higher while the Shanghai can dip in the near term. DAX is close to a key resistance. Sensex and Nifty are likely to see an upside breakout of its sideways range and move higher in the coming sessions.
Dow (26384.77, -27.53, -0.10%) has dipped slightly. A narrow range bound move between the support at 26250 and resistance at 26500 is likely in the near term. We retain the bullish bias for the Dow to breach 26500 eventually and target 26750 and 27000.
DAX (12020.28, +20.35, +0.17%) is just below the crucial resistance level of 12030 which has to be broken for it to rise further towards 12100 and even higher levels. But a pull-back from 12030 can drag the index lower to 11850 levels again.
Nikkei (22208.22 +39.11, +0.18%) remains bullish for a rise to 22500-22600. A strong break above 22250 can trigger this rally. Support is in the 21950-21930 region.
Shanghai (3182.88, +5.09, +0.16%) is facing resistance near 3255 and has come-off sharply. A dip to 3130 looks likely in the near term while the index trades below 3200.
Sensex (38905.84, +138.73, +0.36%) and Nifty (11690.35, +46.90, +0.40%) are heading towards their key resistance levels of 39000 and 11700. The bias is bullish. Sensex can rise to 39500-39700 on a break above 39000. Nifty can break 11700 and rise to 11750 and 11800 in the coming sessions/days.
COMMODITIES
Gold and Silver are holding above their crucial supports. Copper retains its sideways range. Oil looks mixed with WTI slightly weaker than Brent.
Gold (1285) fell as expected and made a low of 1283. Though it has bounced from the low, looks weak to test 1283-1280 again. A break below 1280 will see the current down move extending to 1275 and 1270. A strong rise past 1290 is needed to get a breather and move higher to 1300 levels again.
Silver (14.97) has bounced after testing the crucial support level of 15.85. An upmove to 15.10 and 15.20 is possible if it sustains above 14.95.
Copper (2.93) is holding below 2.96 and is retaining its 2.88-2.96 sideways range. As mentioned yesterday, 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 (71.05) continues to trade stable between 70.50 and 72. A breakout on either side of 70.5 or 72 will decide whether Brent will go up to 72.7 or fall to 69.85
WTI (63.35) looks slightly weaker than Brent. Resistance is in between 63.8 and 64. While below 64, it looks vulnerable to dip to 62.8 in the coming sessions. A strong break above 64 is needed to turn the bias positive again.
FOREX
Major currencies continues to hover around their crucial levels. Price action in the coming sessions will need a close watch to get a cue on the next trend.
The Dollar Index (96.97) is managing to hold above the 21-week moving average support level of 96.62. This keeps the possibility alive of the index moving up to 97.20 and 97.35. A break below 96.62 will turn the outlook negative for a test of 96.4 and 96.
The Euro (1.1303) continues to hover around the crucial juncture and has come-off from 1.1321 yesterday. A strong break above 1.1325 is needed for it to gain strength and move up to 1.1350 and 1.1400. Else a dip to 1.1275 looks possible in the near term which will keep our bearish view intact for a test of 1.1250-1.1200.
The Euro-Yen (126.55) is facing resistance bear 126.80 which if holds can drag it to 126-125.75 in the near-term. A strong break above 126.8 is needed for it to extend the current upmove to 127.6 and 128.
Dollar-Yen (111.98) is not getting strong follow-through buyers above 112 and is stuck in between the support at 111.90 and resistance at 112.10. A breakout on either side of 111.90 or 112.10 will decide whether the Dollar-Yen is going up to 112.5 or 111.75-111.50 in the enar term.
The Aussie (0.7170) is holding below the key resistance level of 0.72. Looks like last week’s rally is losing steam and a dip to 0.7150-0.7135 is likely in the near term. A strong breka above 0.72 is needed for it to regain strength and target 0.73 in the short term.
Chinese Yuan (6.7087) is managing to hold above 6.70. A range bound move between 6.70 and 6.72 looks likely in the near term. The Yuan will come under pressure if it breaks below 6.70 which will increase the possibility of a fall to 6.67-6.66.
Dollar-Rupee (69.4250) has risen sharply yesterday and remains bullish for a test of 69.75 in the near term. A break above 69.75 will see the upmove extending to 70. But a pull-back from 69.75 can take the Dollar-Rupee lower to 69.50-69.35.
INTEREST RATES
US yield have dipped slightly while the German yields are testing crucial resistances.
The US 2Yr (2.39%), 5Yr (2.37%), 10Yr (2.551%) and 30Yr (2.97%) have dipped slightly. The resistances at 2.59% on the 10YR and 3.0% on the 30Yr yields seems to be holding well. While these resistances hold, the 10Yr yield can dip to 2.52%-2.50% and the 30Yr can test 2.93%-2.90%.
The German 2Yr (-0.557%) has dipped while the 10Yr (0.059%) and 30Yr (0.719%) has moved up. The 5Yr (-0.373%) remains stable. The 10Yr and 5Yr yields have resistance near current levels and may reverse lower in the coming days to 0.05% and -0.45% respectively.
The 10Yr GOI (7.5381%) yield is facing resistance at 7.57% and may dip to 7.50% in the near term.
