STOCKS
Equities continue to trade mixed. Indices like the Dow, Sensex and Nifty have to sustain above their near-term supports in order to keep the chances alive of seeing one more leg of an upmove before a sharp correction comes into the picture DAX is hovering near a key resistance which has to be broken in order to see a further rise. Nikkei has come down and keeps the sideways range intact and can fall within this range this week. Shanghai is looking strong and can see a further rise in the coming days. The US markets are closed today on account of a public holiday.
Dow (29398.08, -25.23, -0.09%) remained subdued below 29500 but is likely to get support at 29200 and 29000. While above these supports a break above 29500 and a rise to 29750 and 30000 cannot be ruled out in the short-term. But as mentioned last week we remain cautious to see a sharp corrective fall after the rise to 29750-30000. The US markets are closed today.
DAX (13744.21, -1.22, -0.01%) sustains higher but seems to lack momentum to breach the crucial resistance level of 13800. While this resistance holds, a sideways consolidation between 13600 and 13800 is possible in the near-term. But a strong break above 13800 will then pave way for a test of 14000 and even higher levels. We will have to wait and watch.
Nikkei (23537.08, −150.51, +0.64%) has declined below 23600 thereby keeping the 22800-24140 sideways range intact. Inability to bounce above 23600 from current levels can drag the index lower to 23000 and 22800 – the lower end of the range this week.
Shanghai (2948.37, +31.37, +1.08%) has begun the week on a strong note after holding well above 2900 all through last week. The price action on the daily chart is reducing the chances of seeing a corrective fall to 2875-2850 that we had been expecting since last week. While above 2900 a rise to 2975-3000 and even 3050 looks possible in the coming days.
Sensex (41,257.74, -202.05, -0.49%) has declined below 41400 and is likely to test 41100-41000 while it remains below 41400. Crucial support is in between 41000 and 40900. A break below 40900 will negate the chances of seeing a rise to 42000-42200 that we had been mentioning last week.
Nifty (12113.45,-61.20, -0.50%) is struggling to breach 12200 decisively. 12100 is an important level to watch now. A break below it can take the index lower to 12000 and reduce the chances of seeing 12400-12500 on the upside that we had expected last week. The price action around 12100 will need a close watch.
COMMODITIES
Commodities are trading higher. Crude could now see some more of rise in the coming weeks recovering the recent sharp fall. Gold could test 1590-1600 from where a rejection is possible. Silver and Copper looks bullish.
Brent (57.13) has moved up as expected. While there is scope for further rise in the prices we would watch immediate resistance near 58 just now. A rise above 58 could take it higher towards 60 in the medium term. Nymex WTI (52.25) is also moving up and could test 54 on the upside.
Gold (1586) is holding above 1560 and could test 1590-1600 in the near term. It would be important to see if 1590-1600 holds to push back prices back towards 1560 in the near term.
Silver (17.84) is holding above support at 17.50 and while that holds, it could continue to rise towards 18.00-18.50 in the near term as seen on the daily candles.
Copper (2.6160) is looking bullish towards 2.65 in the near term.
FOREX
US Dollar Index (99.11) is trading near the high of 99.17 and it would be important to see if the index faces rejection from here itself or rises higher towards 99.70-100 in the near term.
Euro (1.0838) is stable but could see some more dip if the Dollar Index continues to move higher. Watch price action near current levels.
Dollar-Yen (109.83) has not been able to move above 110 despite the sharp rise in dollar Index as the stability near higher levels on Gold could prevent a sharp rise in USDJPY. Possible weakness in the bulls could be indicative and we may expect a fall from here in the near term.
EURJPY (119.03) has to bounce back immediately to see an upmove towards 120 else a sustained fall below 119, if seen could keep its near term downtrend intact with a possible fall towards 118-117 in the medium term.
Pound (1.3046) is stable and needs to sustain above 1.30 in order to move up towards 1.32.
Aussie (0.6726) is looking bullish with a possibility of rising towards 0.6775. A rejection from 0.6775 could bring it down again towards 0.6675-0.6650 in the near term.
USDCNY (6.9745) could trade within the 6.95-6.99 region in the near term.
USDINR (71.37) could re-test 71.50 but at the same time it would be important to see if it tries to rise above 71.50 over today or tomorrow to bring in fresh rise for the near term towards 71.65/70. But while 71.50 sustains, we may expect sideways trade in the 71.16-71.50 to continue.
INTEREST RATES
The US Treasury yields remain lower and look vulnerable for a fall in the near-term. The chances of seeing a short-term rise has reduced. The German yields are also trading lower and can dip in the near-term. The 10Yr GoI is near a crucial support which needs a close watch. It will have to be seen if the 10Yr GoI can bounce from current levels itself or after a further dip.
The US 2Yr (1.43%) and 5Yr (1.42%) Treasury yields dipped slightly on Friday while the 10Yr (1.58%) and 30Yr (2.04%) remained stable. Broadly the trend remains negative. The 10Yr might consolidate between 1.55% and 1.65% for some time before falling to 1.50% and lower. The 30Yr looks vulnerable to break 2% and fall to 1.95% and 1.90% while it remains below 2.15%.
The German 2Yr (-0.67%), 5Yr (-0.62%), 10Yr (-0.40%) and 30Yr (0.11%) yields continue to trade lower and looks vulnerable for a fall in the near-term. . The 10Yr can fall to -0.45% and even -0.50% on a break below -0.40%. The 30Yr on the other hand can test 0.03% and even 0% in the near-term.
The 10Yr GoI (6.3713%) spiked to 6.56% on Friday and has come-off sharply to close lower below 6.40%. Crucial support is at current levels in the 6.37%-6.35% region which will need a close watch. A bounce from here can take the 10Yr GoI to 6.43% and 6.45%. But a break below 6.35% will drag the yield lower to 6.30%-6.28% and then a bounce is possible.
