STOCKS
Dow (21891.12, +0.28%) is inching up every session to move up bit by bit. While the near term uptrend remains intact, there could be more room on the upside towards 22000-22100 levels in the medium term.
Dax (12118.25, -0.37%) is almost stable and continues to trade above the near term weekly support at 12060. A bounce from here is necessary to take it higher towards 12300-12400 in the medium term.
Shanghai (3283.67, +0.33%) has been moving up firmly since the last 3-months and has come up to test medium term resistance near 3300. While that holds, the index could come off towards 3250 or maybe consolidate for a few sessions to gather more momentum to resume the uptrend in the longer term. A corrective dip from 3300 is expected in the coming sessions.
Nikkei (19959.41, +0.17%) is almost stable and is likely to consolidate within 19700-20280 in the medium term. Only on a break on either side of the range would we get some more clarity on further direction.
Nifty (10077.10, +0.63%) could head towards 10100-10132 before again seeing a slight dip back to 10000 in the next 2-3 sessions. Near term likely to remain within 10200-9900 with the uptrend intact.
COMMODITIES
Gold (1272) is struggling to close above the 1273-75 regions and only a close above those levels may open up the higher targets of 1298 and 1307. Crucial supports are poised at 1258 and 1245 levels. We are not confident about the sustainability beyond 1270-75 regions due to short term overbought condition. In case the Support at 1245 breaks, there will be a further dip to 1230 and 1210 levels respectively.
Silver (16.84) stands comparatively strong due to the recent strength in copper prices. Immediate resistance poised at 17 levels. Only a close below 16.50 could open up lower levels of 16.20 and 15.90 levels respectively.
Copper (2.90) moved higher in line with our expectation. Midterm resistance comes at 3.12 regions from where we may see some correction due to profit taking. Gold-Copper ratio (437) is trading below of its long term trend line support, could be beneficial for overall growth of world economy.
Brent (52.81) 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 (50.28) is also moved higher and a close above 51 could be the end of midterm bearish trend in WTI too. Both Brent and WTI are approaching towards near term overbought condition thus we might see profit taking at 53 and 51 levels respectively.
FOREX
Lack of stability and major shakeups in the White House are inviting fresh selloff in Dollar, which in turn pushes the majors up.
Dollar Index (92.88) is on its way towards 92.00 as expected after achieving our initial target of 93.00. The 5th consecutive negative monthly closing is its longest monthly losing streak since 2011 and its difficult to see any chance of short covering before 92.00 is met.
Euro (1.1827) has overshot our initial target of 1.18 and now rising towards our next target of 1.20 in line with our expectations. The highly overbought state hasn’t affected the currency yet but we follow the trend cautiously.
Dollar-Yen (110.13) has broken below the support of 110.30 and opened up the downside target/support of 109.50. Resistance comes at 110.50-80.
Pound (1.3215) has finally managed a break above the major resistance of 1.32 and now if it can sustain above the level, the downside risk will be much reduced. In that case, higher targets of 1.3330 and 1.3420 come into consideration.
Aussie (0.8032) is seeing strength ahead of the RBA meet today. The central is widely expected to hold rates but it remains to be seen what steps it consider to weaken the currency. Our targets of 0.8100-70 remain unchanged with immediate support coming at 0.7970.
Dollar Rupee (64.18) closed almost flat with a gain of only 3 paisa. The resistance of 64.25-30 may hold till the RBI meet conclusion coming on Wednesday with the downside open.
INTEREST RATES
The UK-US 10YR (-1.06%) has bounced back from near term support in line with a sharp surge in the Pound to 1.3215. While the Pound continues to move up further against the US Dollar, the yield spread could rise further in the near term towards -1.02% or even higher.
The UK 10-5Yr (0.64%) has broken above the immediate resistance and could move up towards 0.70% in the near term. the differential looks bullish for the near term.
The Us yields are almost stable and could remain so for the coming sessions. The 5Yr, 10YR and the 30YR are trading at 1.83%, 2.29% and 2.90% respectively.
