STOCKS
Dow (22048.70, -0.17%) tested immediate resistance near 22200 and while that holds, we could possibly expect a dip towards 22000-21800 levels in the near term.
Dax (12154.00, -1.12%) could be headed towards 12100-12000 levels soon. For now the index seems to be in a sideways consolidation mode and could trade within 12000-12400 region in the medium term.
Shanghai (3265.98, -0.29%) has some chances of coming off towards 3240 in the near term. Trade within 3240-3300 region is likely to be seen in the next few sessions.
Nikkei (19736.72, -0.01%) could test support zone of 19600-19400/50 in the coming sessions. Near term looks bearish.
Nifty (9908.05, -0.71%) has some scope of testing levels near 9800 in the coming sessions from where a bounce looks likely. A break below 9800, if seen could take it higher towards 9700 in the medium term. For now the index is in a corrective mode.
COMMODITIES
Gold (1276.42) has risen in line with our expectations but needs a break above the immediate resistance of 1285 to continue the rally towards 1300. Failure to rise above 1285 may push it back to 1250 but at this point but at this point, the uptrend remains strong.
Silver (16.89) has reached the higher end of the range of 16.00-17.00 and in case, it breaks above the resistance of 17.00, it may extend the rally to 17.75 negating the preferred view of sideways trade in the range of 16.00-17.00.
Copper (2.93) has been taking pause for the last 2 sessions but the trend remains firmly up and the target of 3.00 and the support of 3.12 remain unchanged.
The bullish stance for Brent (52.70) and WTI (49.55) has paid off so far but now Brent needs a break above the immediate resistance of 53.00 and WTI, above 50.50 to extend their respective rally to 56 and 54.
FOREX
Decreasing chances of any imminent military confrontation between US and North Korea have cooled off the geopolitical tensions and checked the strength in safe havens like Yen (110.07). Dollar Yen has seen a sharp bounce from our support of 109.50 and a break above 110.20 may push it to 111.00 or even higher in the next few sessions.
Dollar Index (93.60) hit a high of 93.89, close to the major resistance of 94.10-40 before retreating a bit. The resistance of 94.10-40 may be tested but it is expected to hold and limit any further advance of Dollar as the larger trend remains down yet.
Euro (1.1743) shows no change from its corrective behavior yet and upside possibilities can be considered only on a break above 1.1800-25. Till then, the downside risk for 1.1600 remains greater.
Pound (1.2998) has barely moved in the last session. View remains unchanged. Repeat – a corrective bounce from 1.2950-30 can’t be ruled out but the larger downtrend may drive it down to 1.2850 levels in the coming days.
Aussie (0.7879) remains in a near term corrective phase and needs a rise above 0.7950 to resume the larger uptrend. Failure to rise above 0.7950 by the end of the week may push it down to the support of 0.7835-20 or even 0.7760-50.
Dollar Rupee (63.84) is trading at 63.95 in the NDF. If the onshore market reflects the same rate, then the pair may enter the major resistance band of 63.90-64.10 where the Dollar sellers may return.
INTEREST RATES
The German-Japan 10YR yield spread (0.37%) has fallen below 0.40% and if it continues to remain lower, we could see a sharp fall in EUR/JPY (129.16) in the near term. Overall the yield spread looks bearish for the coming sessions.
The German-US 10YR (-1.81%) has bounced back from just above support levels and while that holds, it could rise again towards -1.75% pulling back Euro to higher levels.
