STOCKS
The strong jobs data from the US on Friday has dashed the hopes of an immediate rate cut from the Fed. As such the equities have seen some profits being taken-off from the table. However, the bigger picture continue to be in favor of the equities. Significant support in the indices like the Dow, DAX and Shanghai can limit the down and trigger a fresh leg of rally in the coming days.
Though the Dow (26922.12, -43.88, -0.16%) has closed in red on Friday, the bounce from its intra-day low of 26733 indicates lack of strong sellers to drag it lower. This keeps the broader bullish view intact. Dow may consolidate between 26500 and 27000 for some time before a fresh rally to 27200-27500 is seen.
DAX (12568.53, -61.37, -0.49%) has support at 12450. While above this support the broader bullish view is intact to see a rise to 12800 and 13000 in the coming weeks. A near-term consolidation between 12450 and 12650 is possible before we see a fresh rally targeting the above mentioned levels.
Nikkei (21554.38, -192, -0.88%) looks mixed and can consolidate between 21500 and 21750 for some time. A breakout on either side of 21500 or 21750 will decide the next direction of move.
Shanghai (2958.47, -52.59, -1.75%) has declined sharply breaking below 2970. It is now hovering above the crucial support level of 2950 which we expect to hold and trigger a rise to 2970 and 3000 again.
Sensex (39513.39, -394.67, -0.99%) and Nifty (11811.15, -135.60, -1.14%) have declined sharply on Friday. They have crucial supports near current levels at 39500 (Sensex) and 11800 (Nifty) which needs to hold to avoid further fall. A break below these supports can drag them to 39000 (Sensex) and 11650 (Nifty) in the coming days.
COMMODITIES
Gold and Silver have come-off sharply on profit-booking after the US jobs data on Friday. Both, gold and silver have room on the downside but crucial supports are coming up which will need a close watch to see if they manage to bounce-back from there or not. Copper can dip in the near-term while oil remains mixed and can trade in a broad sideways range.
Gold (1399) has key resistances at 1403 and 1410 which can cap the upside in the near term. While these resistances hold a fall to 1380 can be seen this week. The level of 1380 is a crucial support, a break below which will confirm a double top reversal pattern on the daily chart.
Silver (15.02) has resistance at 15.10 and can fall to 14.80-14.75 in the coming days. The level of 14.75 is a crucial support which has to hold to avoid further fall towards 14.50.
Copper (2.66) can dip to 2.62-2.60 while it remains below the 2.68-2.70 resistance zone.
Brent (64.35) can rise to 65.50 and 66 in the near term while it remains above 64. A break below 64 will negate this rise and drag it to 66.
Nymex WTI (57.61) looks mixed in the near term and can remains sideways between 56 and 58. The broader bias is bearish and we expect it to break 56 eventually and fall to 54 and even lower levels in the coming days.
FOREX
Dollar has got a boost from the strong nonfarm payroll numbers on Friday. The outlook is bullish and the greenback can strengthen further in the coming days which in turn can drag the major lower in the coming days.
Dollar Index (97.25) has risen above 97 and remains bullish. A rise to 97.80-98 is possible in the coming days while it remains above the 97.00-96.90 support zone.
Contrary to our expectation, Euro (1.1225) has declined below the support at 1.1250 and is under pressure. The next support at 1.12 can be tested now and a break below it can drag the Euro lower to 1.1150. Resistance is at 1.1250.
Dollar-Yen (108.50) has bounced sharply above 108 again and looks bullish in the near term. A test of 108.75 and 109 is possible while it remains above 108.35
Euro-Yen (121.80) is range bound between 121 and 123.5 and can move higher to 123-123.5 within this range in the coming days. A break above 122 will trigger this rise.
Aussie (0.6981) has tumbled below 0.70 and is hovering above a key support level of 0.6950. The bias is negative for it to break 0.6950 and fall to 0.6900 or even lower in the coming days. Resistance is in the 0.6990-0.7000 region.
Pound (1.2525) is managing hold above the key support level of 1.25. Though an intermediate bounce to 1.26 cannot be ruled out in the near-term, the broader view remains bearish for it to break 1.25 and fall to 1.2350 in the coming days.
USDCNY (6.8925) has surged in early trades today and can test the resistance at 6.90. A break above 6.90 will take it to 6.92-6.93. But a pull-back from 6.90 can keep the pair in the 6.83-6.90 range for some more time.
USDINR (68.4250) has support in the 68.40-68.35 region which can hold for a while and trigger a bounce to 68.80 or even higher levels in the near term. But the broader view remains bearish for the USDINR to break 68.35 eventually and fall to 68 in the coming days.
INTEREST RATES
The strong US nonfarm payroll numbers have given a breather to the yields as it has reduced the chances of an immediate rate cut from the Fed. The yields have bounced on Friday and can either consolidate or see an intermediate bounce within their overall downtrend.
The US Treasury yields are up sharply across tenors. The 2Yr (1.85%), 5Yr (1.82%), 10Yr (2.02%) and 30Yr (2.53%) were up between 6 and 9 bps. The 10Yr (2.02%) has bounced back above the 2% mark. It can move further up to 2.08%-2.10% in the near term while it remains above 2.%. Similarly, the 5Yr (1.82%) can rise to 1.88% and 1.90% while it sustains above 1.80%.
The 5Yr (-0.64%), 10Yr (-0.37%) and 30Yr (0.24%) German yields were up sharply while the 2Yr (-0.76%) was down marginally. The yields can move further higher in the near term .The 5Yr can test -0.60% while the 10Yr can move up to -0.32% and -0.30%.
The 10Yr GOI tumbled to 6.5636% on Friday and has bounced from there. Strong support is in the 6.60%-6.55% which can halt the current downtrend and trigger a reversal to 7.00% and 7.10% in the coming weeks.
