STOCKS
Dow (21409.55, 0.07%) has been stuck in the very narrow range of 21330-530 for the last 8-9 sessions and a downward break from that range for lower levels of 21200 may be expected this week. In case the support of 21200-150 holds, then the larger uptrend may resume for new highs.
Dax (12770.83, +0.29%) remains trapped in a corrective mode but as long as the support 12650-30 holds, the chances of a fresh high at 12900-13000 remain open.
Shanghai (3183.47, -0.06%) has achieved the immediate target of 3180 already and now faces the resistance of 3200-10 which, if not overcome immediately, may initiate a correction to 3160-50 in the next few sessions.
Nikkei (20213.62, +0.30%) has hit a fresh 23-month high at 20250 and may register higher highs near 20500 if the support of 20000 holds.
Nifty (9574.95, -0.57%), contrary to expectations, broke below the support of 9600. The 4-week long support of 9560-50 may determine the near term path as it must hold for the bulls but a breakdown may sub-9500 levels. It is not clear if the support will hold or not in this expiry week.
COMMODITIES
Gold (1244) and Silver (16.53) are going nowhere as they keep trading in the narrow range of 1233-1248 and 15.93-16.77 respectively. Global cues are not in favor of gold and silver too as the break above 99.70 for Dollar Index (97.13) could be resulted further losses for bullion. If 1233 for gold and 16.45 for silver fail to hold for the current week then gradual selling for the target of 1195 and 15.93 can’t be ruled as seller will take every bounce as a further opportunity for selling.
Copper (2.65) moved higher in line with our expectation and trading within a range of 2.60-65. Only above 2.65 higher resistances of 2.69 can come into consideration. In the medium term 2.55-57 are going to be a strong support and we will remain bullish while it is trading above those levels.
Brent (46.12) and WTI (43.45) closed higher and trading as per our recommended levels. We will remain bullish in extreme short term time frame while Brent and WTI are trading above 46 and 43 levels. We have weekly U.S. crude inventory data tomorrow and a deficit could help Brent and WTI to move towards 46 and 48 regions respectively.
FOREX
No conclusive Dollar direction yet but a sharp move can be expected later in the week.
Dollar Index (97.40) is yet to rally for our higher targets of 98.10-40 but the slow correction and the recovery from the support zone of 97.10-96.90 in the last session keeps the possibility of the larger uptrend resuming still open.
Euro (1.1187) has been facing rejection from the immediate resistance of 1.1210-30 repeatedly but the bears still need a break below 1.1160 to bring up bearish momentum. A break below 1.1160 may invite 1.1100 and lower levels.
Dollar-Yen (111.90) has achieved our initial target of 112.00 and may meet our next target 113.00 in a few more sessions. Any interim correction may be limited to 110.90-70.
Pound (1.2720) keeps trading in the range of 1.2540-1.2820 as expected and the rangebound movement may continue for a few more days. With the bounces coming slower than the declines, the downtrend remain in force.
Aussie (0.7588) has bounced back from 0.7530 levels, well short of our downside support of 0.7490 but face resistance near 0.7620-35.
Dollar-Rupee (64.52) spent another quiet session to end the week inside the range 64.10-75. This collapse in volatility may see expansion in the coming 5-7 days and trigger a breakout from the range. Till then, play the range.
INTEREST RATES
The US yields are falling but might get support at current levels due to oversold condition in the near term. The near term yields had stopped falling while the longer end yields have been falling over the last 1-2 weeks, flattening the yield-curve.
The US 10-5Yr (0.39%) had broken the downward channel support and could test 0.375% on the downside. We think 0.375 is going to hold as US 10Y yield at 2.12,is highly oversold and could bound back towards 2.19 levels within a few days of time.
