STOCKS
Dow (21408.52, -0.03%) is range-bound in the 21550-21250 region and could possibly continue to remain so for another couple of sessions. A corrective fall towards 21000 is on the cards for the medium term. For now, sideways consolidation may continue.
Dax (12445.92, +0.46%) opened with a gap up but could not move above 12500. Only on a sustained break above 12500 can we negate a possibility of a further fall towards 12300 or lower just now, else the index could start moving towards 12600 again in the near term. 12500 is a crucial level to watch.
Shanghai (3203.93, -0.27%) continues to remain in the near term up channel. A slight dip towards 3200-3190 is possible before resuming the uptrend. Medium term looks bullish.
Nikkei (20135.63, +0.27%) is rising as expected and could move up towards 20200-20300 in the near term.
Nifty (9771.05, +1.09%) shot up sharply yesterday, rising from levels near 9650, surprising the market. Yesterday’s move indicates sharp bullish momentum in force and while that holds, we could see a rise towards 9850-9900 in a few sessions. Near term looks bullish.
COMMODITIES
Gold (1211) and Silver (15.55) are trading within the range of 1188-1231 and 15.20-16.10 respectively. We will remain bearish on Bullion while they are trading below 1250 and 16.50 levels. We think the sideways modes within these ranges are expected to remain unchanged, and a bounce towards there resistances can be seen in the latter part of the week due to near term oversold condition.
No directional movement had been seen in Copper (2.66) as it is trading within the range of 2.66-2.78. We will remain bullish on copper while it is trading above 2.55 levels.
Brent (47.06) and WTI (44.58) are trading marginally higher to keep the upside possibilities open. The recent trading range could be 44.60-48 for Brent and 42-46 for WTI . Both of them are in a neutral trading zone and could move either side.We will be assured of strength of Brent and WTI only when a firm and sustainable closing above 48 and 46 are made by both of them. Otherwise a failure to close above those levels may push them towards 44 and 42 levels respectively.
Gold/WTI ratio (27.31)found support at 26 levels and could move towards 28.5-29 by the end of this week.
FOREX
See good chances of fresh and further strength in the Euro (1.1393) towards 1.1460, possibly higher, with good Support at 1.1360 and 1.1300. The Dollar Index (96.10) remains weak overall with decent chances of decline to 95.50-40.
The Euro holds onto strength against the Yen as well with Euro-Yen (130.10) likely to climb higher towards 131 over the course of the week. The Yen is possibly the weakest currency just now with Dollar-Yen (114.18) also looking like it can rise further towards 115, with intra-day Support at 113.75. The continued rise in the US-Japan yield spread provides Support to Dollar-Yen.
Although the Pound (1.2875) remains weak while below 1.2935, it may also have intra-day Support at 1.2850-40 now. Only if that breaks can we see further decline towards 1.2800-2750. So, the fall from the high of 1.3030 a couple of weeks ago could start slowing down. Careful about getting trapped in a Short there.
We called for a fall in the Aussie (0.7615) to 0.7530 yesterday, but the market appears a little uncertain as some Intra-day Support is also seen at 0.7600-7575. So, there could be spiky movement in the Aussie, a little like in Pound. The cleanest currencies to trade just now might be the Euro and the Yen.
The Chinese Yuan (USDCNY 6.8040) is weakening slowly, with emerging chances of further weakness towards 6.82. This one needs to the watched.
Dollar-Rupee came down to 64.53 yesterday and trades near 64.50 on the NDF just now. Range Support may be expected in the 64.45-40 region today.
INTEREST RATES
The US yields have come off as mentioned yesterday. The 5YR (1.93%), 10Yr (2.37%) and the 30YR (2.93%) are trading slightly lower from previous levels of 1.40%, 1.96% and 2.39% respectively.
The US 10-5Yr differential (0.44%) has reached the resistance and could come off towards 0.4250% by tomorrow.
The US-Japan 10YR (2.27%) has also started come off exactly as expected and could move down towards 2.2% in the near term. This could possibly pull down Dollar-Yen also towards levels near 112.
The German-Us 10Yr (-1.83%) and the German-US 2Yr (-1.99%) both have some scope to move on the upside and could rise in the near term, indicating a stronger Euro.
