STOCKS
Dow (21479.27, +0.61%) rose towards 21600 but came off sharply to close at lower levels. Immediate hurdle could be faced near 21600-21750 levels before targeting 22000 on the upside. Further upside could be limited just now and a sharp corrective fall is on the cards for the medium term. We need to be cautious near current levels.
Dax (12437.13, -0.31%) came off last week from important resistance near 13000 and could possibly come down to test 12000 in case it breaks below 12400. Movement looks bearish for the current week.
Shanghai (3191.94, +0.29%) continues to remain in the sideways consolidation mode as expected. Immediate resistance is seen near 3200 which seems to be holding quite well for now.
Nikkei (19928.79, -0.52%) is trading lower. There is some chance that it may test 19700 on the downside before again trying to move up towards 20250. On the weekly charts, the index is in a sideways consolidation mode within 19700-20250 levels.
Nifty (9613.30, -0.02%) tested 9650 yesterday but came down to close at 9613. While it manages to sustain above 9615-9625 levels, there could be some chances that it moves up towards 9700 in the next couple of sessions but at the same time it could also come off below 9600 just now. There is no directional clarity just now. We would like to wait and watch.
COMMODITIES
Gold (1222) is trading within the range of 1190-1230 and Silver (16.16) is within 15.80-16.50. On 27th June, we had clearly mentioned that ‘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’. We will remain bearish on Bullion while gold and silver are trading below 1250 and 16.50 levels respectively.
No directional movement had been seen in Copper (2.68) as it is trading within the range of 266-2.78.If 2.66 holds then we might see 2.82 within few days of time. We will remain bullish on copper while it is trading above 2.55 levels.
Although Brent (49.56) and WTI (47.01) are trading near their resistances of 50 and 48.50 levels but this recent bounce hasn’t affected their midterm bearishness much and we will remain bearish while Brent and WTI are trading within 54 and 51 regions respectively. We have U.S weekly crude oil inventory data tomorrow, which could be a decisive factor to determine the future course of action.
FOREX
All eyes will be on the Fed minutes from its Jun’17 policy meeting to find clues about the rate path in the coming months which may move Dollar tonight.
Neither Euro (1.1361) has declined below the support of 1.1320-1.1290 nor Dollar Index (96.13) has broken above the resistance of 96.50-65 to provide us the confirmation for the preferred scenario of continued Dollar strength in the coming days. Repeat – We expect Dollar to stage a turnaround to the upside soon but we are still waiting for confirmation. Till now, most of the majors are in a normal correction and further break of major supports are required before the downtrend can be confirmed.
Dollar Yen (112.96) is in a sideways corrective mode for the last 2 sessions but as long as the support of 112.60 holds, the chances of further upside to 114.30-115.00 remain open.
Pound (1.2938) has managed to stay above the support of 1.2880 so far, keeping the near term trend up so far and the possibilities of resuming the uptrend in the coming sessions open.
Aussie (0.7619) has been hurt by the RBA maintaining status quo and the upside momentum is gone. If the next support of 0.7580 holds, it may attempt a recovery but the bears may return at the higher levels.
Dollar Rupee (64.74) tried to rally above 64.90 but failed to sustain the upside momentum, as frequently seen in the recent days. It corrected to close below 64.80 but as long as the support of 64.60 holds, the chances of another rise to 64.90-65.00 remain open.
INTEREST RATES
The US yields have risen sharply since last week. The 5Yr (1.91%), 10Yr (2.32%) and the 30YR (2.84%) are all up from previous levels near 1.85%, 2.25% and 2.82% respectively. The 30Yr is heading towards resistance near 2.92% while the 10YR could rise to 2.4% before coming off again by the end of the week.
The German-Japan 10Yr (0.39%) is trading just below resistance levels and could come off sharply from there in the near term. this could indicate that the EUR/JPY (128.32) could also come off in the near term maybe towards 127 or even lower.
The German yields are rising and could face long term resistance above current levels. While the resistances hold, the yields could come off in the near term.
