STOCKS
Dow (21830.31, +0.15%) continues to rise and looks potentially bullish for the near term. Immediate target is 22000 for the next few sessions.
Dax (12162.70, -0.40%) is testing support near current levels and while that holds, the index has fair chances of moving up towards 12750-13000 levels in the coming sessions. Only a break of the support, if seen could force us to look at lower levels.
Shanghai (3262.86, +0.30%) has resumed its rally and is heading towards 3280 in the next few sessions before facing slight rejection from there. Near term looks bullish.
Nikkei (19946.32, -0.07%) could possibly be ranged or move down in the near term while Dollar Yen is headed towards 110-109. Although the index itself looks potentially bullish the strength in Yen is preventing an immediate rise in Nikkei. Near term trade expected in the 19800-20200 region.
Nifty (10014.50, -0.06%) is trading within the near term up channel and could remain in the 10200-9900 region for the next few sessions. Immediate trend is up but we could expect some interim corrections while the index rises gradually.
COMMODITIES
Gold (1268) moved higher and hovering around our target of 1270. Now it is trading within the range of 1258-70.Gold is overbought in near term time frame, thus we are not confident about the sustainability beyond 1270 regions. There is a possibility of a correction towards 1245 in short term time frame, but we will remain bullish on Gold while it is trading above 1245 regions. Silver (16.72) is also out of its recent bearish zone and trading within the range of 16.50- 17. Recent strength in copper has supported Silver to trade above 16.50 levels.
Copper (2.90) moved higher in line with our expectation and looks on a firm footing while it is trading above 2.78 levels. Midterm resistance comes at 3.12 regions from where we may see some correction due to profit taking.
Brent (52.34) is out of its midterm bearish channel as it is trading above 51.30 regions. Immediate resistance comes at 53 levels and a close above that could open up 56 as well. WTI (49.87) is also moved higher and a close above 51 could be the end of midterm bearish trend in WTI too. We are bullish on oil since 10th of July onward and there is no reason to change our bullish stance while Brent and WTI are trading above 51 and 48 levels on a weekly closing basis.
FOREX
US GDP is back to its steady growth but no sign of any exciting acceleration keeps the chances of Fed taking any further hawkish steps low. Dollar remains weak and the majors keep their upside momentum intact.
Dollar Index (93.41) has lost of the most of the gains made from the low of 93.15 and the chances of retesting 93.00 or even 92.00 look stronger now, in line with our expectations. Euro (1.1734) is stalling near the high of 1.1777 registered last week but the target of 1.1800 and 1.2000 remain unchanged.
Repeat – Euro is in the most overbought condition since 2008 and Dollar in the most oversold condition since 2011, which warrants a consolidation phase at least if not an outright sharp correction. So follow the trend without underestimating the possibility of a sharp reversal in the coming sessions.
Dollar-Yen (110.55) is testing our support zone of 110.50-30 but no strong recovery has been seen yet. If 110.30 fails to contain the decline, it may fall further towards 109.50. On the other hand, a bounce from the current levels can take it higher to the resistance of 111.40-112.00. The price action at the current levels may determine the near term path. Bias neutral.
Pound (1.3126) has not managed a break above the major resistance of 1.32 so far which keeps the possibility of a break below 1.30 open. In case 1.30 breaks down, the trend may reverse to the downside in the near term with targets of 1.28 and lower.
Aussie (0.7973) hit a high of 0.8065 last week, close to our initial target of 0.8100. With the current consolidation expected to be over by the end of the week, the larger uptrend may resume for higher targets of 0.8100-70. Repeat – only a break below 0.7925 may signal a consolidation phase in the range of 0.7870-0.8050 for a few days to be followed by a fresh rise.
Closing below 64.25 has weakened Dollar Rupee (64.15) technical structure and increased the chances of a break below 64.09 considerably. This week may see 63.90 on a break below 64.09 and even lower levels if 63.90 fails to hold.
INTEREST RATES
Sideways move had been seen in across all The US yields . As mentioned earlier, yield s could remain stable in the coming sessions before we see another down leg. The 30Yr (2.88%) is targeting 3% while the 10YR (2.28%) and the 5Yr (1.82%) are targeting levels near 2.40% and 2% respectively.If these resistances hold then We might see some fresh buying in U.S Bonds in coming weeks.
