STOCKS
Asians are trading lower on increasing concerns/uncertainty over the US-Iran conflict. On the one hand, the US has said that it is ready to negotiate and not looking for any war. On the other hand, the US is ready to announce additional sanctions on Iran today. Indices like the Dow, DAX, Nikkei and Shanghai can see intermediate dips before their overall uptrend resumes. Sensex and Nifty, though are retaining their sideways range, looks vulnerable to break their range on the downside and fall in the coming days.
Dow (26719.13, -34.04, -0.13%) has come-off from it intermediate resistance at 26900. The outlook is bullish. But, a dip to test the supports at 26630 and 26580 is likely first before we see the uptrend resuming towards 27200 and 27500.
DAX (12339.92, -15.47, -0.13%) is not gaining strength to breach 12400 decisively. However, while above the support at 12300-12285 support zone, the outlook is bullish for it to breach 12400 and rise to 12600 and 12800 in the coming weeks.
Nikkei (21255.20, -3.44, -0.02%) has come-off sharply on Friday. Immediate supports are at 21250 and 21190. While above 21190, the bullish outlook for a rise to 21750 will remain intact. A break below 21190 will negate the bullish view and drag the Nikkei lower to 21000.
Shanghai (3003.81, +1.83, +0.06%) has decisively broken its 2835-2950 range on the upside last week as expected. A strong break above the immediate resistance at 3020 will pave way for 3050 and 3100. While 3020 holds, an intermediate dip to 2950 is possible before we see 3050-3100 on the upside.
The resistance near 39750 on the Sensex (39194.49, -407.14, -1.03%) and 11850 on the Nifty (11724.10, -107.65, -0.91%) has been holding very well. Sensex can fall to 38500 – the lower end of its 38500-39750 range. Nifty can test 11600 – the lower end of its 11600-11900 range. The bias is bearish for the indices to break their range on the downside and fall to 38000 (Sensex) and 11500-11450 (Nifty)
COMMODITIES
Overall commodities look bullish towards immediate resistances. We could see some rise in the near term before the commodities face rejection from respective resistances.
Gold (1410.20) is trading above 1400 again testing immediate resistance near 1410. Failure to fall from here immediately would indicate further bullishness towards 1425-1450 in the near term.
Silver (15.38) however is trading below immediate resistance near 15.60/65 as seen on the 3-day candles. While the resistance holds, silver could trade within 14.70 and 15.60/65 in the near term.
Copper (2.7045) could test resistance near 2.75/80 from where a rejection is possible in the medium term. On the downside 2.60 continues to remain as strong weekly support which is not likely to break. A small rejection from 2.80 is possible for the near term followed by resumption of upside rally in the longer run.
Crude prices rose sharply last week on US-Iran tensions and a drop in US Crude stockpiles. But after word came in that Trump has cancelled attacks on Iran and that some hope of positive talks between US and Chine in the G-20 summit this weekend could keep Crude prices stable.
WTI (57.78) has resistance on the daily candles near 60 which is likely to hold in the near term. A rise in Nymex WTI if seen could be short lived.
Brent (65.37) has immediate resistance near 67 while above 64 and could see a dip from there. Note that 67-69 is an important resistance zone and is likely to hold and push back Crude prices towards 64 or lower in the medium term.
FOREX
Dollar Index (96.11) is trading above support at 95.78 and while that holds, the index could attempt to rise towards earlier support turned resistance near 96.50. A break below 95.78 would turn bearish for the medium term towards 95 or even lower.
Euro (1.1383) has given bullish signal breaking above 1.1350. While the pair trades higher, it could target 1.14-1.15 in the near term.
Dollar-Yen (107.35) is trading above support at 107 and could trade within 107-108 region for now. A weaker Dollar Index could drag down Dollar-Yen towards 106 on the downside which is a crucial long term support. For now we may expect 107 to hold.
Euro-Yen (122.20) has bounced well from 121. Note that 122.50 is an immediate resistance which if holds could push back Euro-Yen towards 121. A break above 122.50 would take the pair higher towards 123-124 in the longer run.
Aussie (0.6955) is also trading below immediate resistance on the daily candles and could face a short rejection before moving higher towards 0.70.
Pound (1.2752) looks bullish towards 1.28-1.29 while above 1.2750.
USDINR (69.56) has room to test 69.25 on the downside and has resistance near 69.75 and higher at 69.90. Overall the pair is expected to trade within 69.75-69.25 in the near term.
INTEREST RATES
The US 30Yr (2.59%) and 10Yr (2.05%) yields have risen on Friday while the 5Yr (1.79%) and 2Yr (1.77%) remained stable. The 30Yr has resistance in the 2.60%-2.62% region which can cap the upside and pull it lower again towards 2.50% and 2.45% in the coming days. Similarly the 10Yr has resistance at 2.10% and can remain pressured on the downside to test 2.0% and even lower levels.
The German yields have been inching lower along with their trend line supports. The 30Yr (0.29%), 10Yr (-0.29%), 5Yr (-0.63%) and 2Yr (-0.75%) have fallen on Friday. The 30Yr can inch lower to 0.25% while it remains below 0.30%.
The 10Yr GoI (6.9945%) can consolidate in a broad sideways range between 6.90% and 7.10% within its overall downtrend. The bias will continue to remain negative for the 10Yr GOI to break 6.90% and fall to 6.80%-6.75% in the coming days.
