STOCKS
Dow (21310.66, -0.46%) has come off from important long term resistance near 21500 and while that holds, we could possibly see a fall towards 21100 before bouncing back afresh.
Dax (12671.02, -0.78%) is trapped within the near term resistance and support levels of 13000 and 12600. In case the falling momentum continues, we could possibly see a dip below 12600 in the near term; else a rise back towards 13000 is possible.
Shanghai (3176.73, -0.45%) has come off slightly as expected and could continue to fall towards 3160-3150 levels while the resistance near 3200 holds.
Nikkei (20166.21, -0.29%) looks bullish just now and has the potential to move up towards 20500 while supports near 20000 and 20200 hold. Although the movements in the last few sessions have been very narrow, this could act as a good base building to rise up sharply in the near term.
Nifty (9511.40, -0.66%) could have possibly ended the immediate correction and could bounce back towards 9550 today. A break below 9480, if seen could turn the index more bearish towards 9400-9390 levels. But preference is for an immediate bounce from 9480 back towards 9600.
COMMODITIES
While Dollar Index (96.06)had failed to hold it’s gain above 97 levels, Bullion has strengthened again against Dollar yesterday. Gold (1252) and Silver (16.74) are trading well above their crucial support at 1233 and 16.50 respectively. A break below 1245 is necessary for gold to turn bearish towards 1231 for the near term else a bounce back could take it higher towards 1262. Silver is trading within the range of 16.50-17.05 and a close above 17.05 could open up 17.50 levels as well.
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 and 2.80 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.
Both Brent (46.87) and WTI (44.09) closed higher in line with our expectation. Market is waiting for today’s U.S weekly crude inventory data (8:00 pm IST) with an expectation of a shortage (-2.1 MB) in inventory and prices could move according to the outcome. If the anticipation of -2.1 M Barrel of shortage will match the actual outcome then that could be beneficial for both Brent and WTI. Otherwise a surplus or a less than expected shortage could bring further bearish possibilities into consideration. The immediate trading range for Brent and WTI are 46-48 and 43-46 respectively.
FOREX
Dollar Index (96.06) moved lower contrary to our expectation and now trading within the range of 96-97 regions.We think it could consolidate for a while at current levels due to short term oversold condition.We will remain bearish on dollar index while it is trading below 97 levels.
Finally Euro (1.1349) had breached the crucial resistance of 1.1210-30 and closed at day’s high. Immediate trading range could be 1.1207-1.1426 and the bulls need to trade above 1.1207 levels to keep the bullish momentum intact. We might see range trading for next few days as Eur/Usd is overbought in near term time frame.
Dollar-Yen (112.09) may test 112.50 over today and tomorrow followed by a dip towards 111.50. Note 112.50 is a decent resistance and could possibly hold the price lower.
Pound (1.2816) is trading at the upside limit of the 1.2540-1.2820 region mentioned yesterday. A rise towards 1.29 is possible if it breaks above 1.2820; else a fall to 1.27 is possible in the near term.
Aussie (0.7588) has been testing immediate upside resistance zone of 0.7625-0.7635 since mid-June but has nt been able to break on the upside yet. While below 0.7625, the currency pair could move down to 0.7550 or remain stable. Only on a break above 0.7635, shall we focus on higher levels.
Dollar-Rupee (64.52) was almost stable yesterday and we may expect the 64.40-64.70 region to hold for some more sessions.
INTEREST RATES
The German-US 2Yr (-1.92%) is headed towards -1.90% along with the sharp rise in Euro yesterday. Immediate trend looks bullish. We could possibly see a test of -1.90% before falling off from there.
The US yields are trading higher but is likely to remain sideways for the rest of the week. The 5Yr, 10YR and the 30Yr are trading at 1.81%, 2.20% and 2.75% respectively.
The US 10-5Yr (0.39%) has bounced from channel support and could move up towards 0.40% and higher in the coming sessions.
