STOCKS
Equities remain on the defensive overall.
Although the Dow (21858, +0.07%) was quiet on Friday after the fall from 22000 over the course of the week, it can test trend-Support near 21700 this week.
The Nikkei (19546, -0.84%) has opened sharply gap-down today, possibly making up for the Japanese holiday last Friday. This opens up chances of further dip to 19400, putting the uptrend since 15000 (June-2016) in danger.
Support at 3200 is holding so far on the Shanghai (3221, +0.4%), but a dip to deeper/ stronger Support 3100 is possible if the Support at 3200 breaks.
The underperformance in the Nifty (9710.80, – 1.1%) could give way to more pronounced bearishness 9500 or even lower.
COMMODITIES
Overall crude prices have some possibility of falling in the coming sessions while Silver could have some more room on the upside. Gold looks bearish.
Gold (1287.59) has come off slightly from levels near 1292 seen last week. Immediate resistance is visible near 1296 which if holds could push off the price towards 1267 in the coming sessions. A break above 1296-1300, if seen could open up chances of testing 1315-1320 on the upside. We will have to remain cautious just now. In case the Dollar Index (93.07) falls towards 92, Gold could strengthen some more in the near term.
Silver (17.09) could test resistance near 17.50 in the coming sessions before coming off towards 16.50-16.00 levels. A break above 17.50 could turn bullish for Silver.
Brent (51.97) is also trading below important resistance near 55 and while that holds, could come off towards 50-48 levels in the near to medium term. Also note an interim support near 51 which if holds, could possibly keep Brent prices stable within 55-51 zone for some sessions. While 51 holds, we may assign less preference to 50-48 levels just now.
WTI (48.75) could test 46.95 before again rising back towards 51-53 levels. Near term looks bearish.
Copper (2.9115) could be headed towards 3.00 in the medium term while above 2.80. Near term looks bullish.
FOREX
The Dollar remains weak overall against the Majors and relatively stronger against the Rupee.
Friday saw fresh strength in the Euro (1.1828) which has risen from a low of 1.1748. Good Support is available at 1.1720-00 now, reducing our concern about the risk of a fall to 1.1650-00.
Surprisingly, there hasn’t been much follow-through sales below 109.00 in Dollar-Yen (109.40). Still, the trend remains overall bearish with intra-day/ intra-week Resistance at 109.70-90. At the same time, near-term Support has been established at 108.68. So, a sideways whipsaw movement is a possibility to be considered.
Consequetly, the Euro-Yen (129.36) still manages to trade above 128, a crucial Support on the Weekly Candles. If there is a strong bounce above 130 from here, it might rekindle the "Risk-ON" trade, which had come into doubt last week.
Decent Support is seen at 1.29 for the Pound (1.3016) on the 3-day Candles and dips thereto might get bought for a bounce towards 1.32.
The Aussie (0.7905) has bounced well enough from the Support at 0.7835 mentioned on Friday. As such, it might gather strength to rise further towards 0.80.
Dollar-Rupee saw a high near 64.2650 on Friday before closing a little lower at 64.13/14. The picture is unclear now and people might not take positions given the market is closed tomorrow for Independence Day and on Thursday for Navroz.
INTEREST RATES
The US yields seem to be rising just now but looks bearish for the longer term. the 10Yr (2.19%) could test 2.1% while the 5YR (1.74%) and the 30Yr (2.80%) could test 1.70% and 2.78% respectively before bouncing back in the next few sessions.
The US-Japan 10Yr (2.13%) broke below immediate support near 2.15% and could head towards 2.08% from where a slight bounce is possible. In case it breaks below 2.08%, it could turn bearish for the spread as well as Dollar Yen and Nikkei for the medium term.
The German-US 10Yr (-1.81%) is almost stable while the German-US 2Yr (-2.02%) is slowly inching upwards and could move up in the near future. This could support the Euro strength in the next few sessions.
