STOCKS
Almost all major indices are trading near support and resistance levels. We would have to wait for a couple of sessions to get confirmation on further direction.
Dax (12177.04, +0.10%) has bounced from immediate weekly support levels of 11940 and while that holds, the index may try to come up towards 12300-12500 in the next couple of weeks.
Dow (21998.99, +0.02%) could be headed towards 21800 while the resistance near 22200 holds. Medium term trade region is possible within the 21800-22200 levels.
Nikkei (19756.77, +0.02%) is trading just above immediate support near 19450. If this holds, we could see a bounce back towards 20000; else a fall below 19450 could take it lower towards 19250 levels in the medium term.
Shanghai (3234.99, -0.50%) is testing near term support on the weekly charts at 3200 and while that holds, a bounce back towards 3300 is possible. Note that in case 3200 breaks on the downside, fresh fall towards 3150 could open up.
The bounce from 9680 levels in Nifty (9794.15, +0.86%) seems to be holding well for now. But while below 9900, we do not negate further chances of a dip towards 9600 or lower. Note the current bounce could take it upto 9850 before another dip is seen.
COMMODITIES
Gold (1279) is struggling to rise above the 1300 regions and only a break above that may open up the higher targets of 1327. Crucial supports are poised at 1258 and 1230 levels. In case the Support at 1230 breaks, there will be a further dip to 1210 and 1188 levels respectively.
Silver (16.66) stands comparatively strong due to the recent strength in copper prices. Immediate resistance poised at 17.10 and 17.50 levels. Only a close below 16.60 could open up 16.05 and 15.80 levels respectively. We might see significant fall in Silver if there will be any short term price correction in Copper towards sub 2.85 levels.
Muted price action has been seen in Copper (2.88). Midterm resistance comes at 3.12 regions and support is at 2.85 levels. We will remain bullish on copper while it is trading above 2.85 regions.But a daily close below 2.85 could open up 2.78 and 2.67 levels respectively.
Brent (51.05) and WTI (47.74) are trading within the ranges of 49.50-53 and 47-50 respectively. We will remain bullish on Brent and WTI, while they are trading above 49 and 47 levels on a weekly closing basis.Today we have U.S crude oil inventory at 8:00 pm with an expectation of -3.0 MB.
FOREX
Good gains overnight by the US Dollar (Dollar Index 93.82) after a stronger than expected US Retail Sales (+0.6%, against expectation of +0.4%) and a comment by Bill Dudley of the New York Fed that he favours one more rate hike. Still, be careful of important Resistance in the 94.00-94.50 region.
The Euro (1.1740) may well dip to 1.1640 over this week or the next. Unless there is a strong bounce from that level, there could be danger of deeper decline towards 1.1540 or lower.
Sharp rise in Dollar-Yen (110.67) above 109.70 which seems to be breaking out of the near-term downtrend that was in place from 114.50 (mid-July). As hinted on Monday, maybe we have to give more time to a sideways trend in Dollar-Yen.
The Euro-Yen (129.86) has done well to remain above the crucial Support at 128. As mentioned earlier, a fresh rise past 130 could rekindle the "Risk-ON" trade.
Need to watch the Pound (1.2863) carefully here as it trades below the 1.29 support mentioned on Monday, but on a trendline Support coming up from the low of 1.2106 (14th March). A bounce from here is possibly more likely than a break of Support.
The Aussie (0.7830) fell to a low of 0.7807 yesterday instead of building on its bounce from 0.7830. We may see a test of 0.7790 on the downside while below 0.7870-90.
Dollar-Rupee quotes at 64.35/40 on the NDF market after Independence Day holiday yesterday and close at 64.1150/1250 on Monday.
INTEREST RATES
The US 10Yr (2.266%) has seen a sharp uptick after the New York Fed’s Bill Dudley said he favours one more rate hike. A test of Resistance at 2.30-32% is likely in the near term, which may hold for now.
The German-US 10Yr Spread (-1.831%) has dipped to channel Support near current levels. We need to see if there is a bounce from here or not.
Japanese 10Yr (0.05%) remains in the overall downtrend that is in place from levels just above 1.90%, back in mid-2007. A slow grind down towards 0.03% might be considered.
The UK 10Yr Gilt (1.083%) might have Support near current level. But, we need to see, over the next couple of days, if there is a bounce from here or not. If not, the Pound could weaken rather than bouncing as the UK-US 10Yr Spread (-1.177%) is moving in favour of the Dollar.
