STOCKS
Dow, Nikkei, Shanghai and Indian indices are looking strong for the near term while the movement is indecisive in Dax which can move either ways towards 15400 or 15900 from current levels. We may look for an overall upward momentum to continue in most indices mentioned below.
Dow (35970.99, +216.30, +0.60%) rose on Friday and while above immediate trend support at 35750, the view is bullish to see a rise towards 36250-36500 soon.
DAX (15623.31, -15.95, -0.10%) has come down slightly today. While below 15900/800, the index can fall to 15400 or lower. For now we look for a possible range of 15800-15500 to hold over the next couple of sessions.
Nikkei (28696.68, +258.91, +0.91%) has risen above 28500 again. The view is bullish while above 28500 to see a rise towards 29000 and 29500 eventually. A break below 28500 on the other hand, can take the index down towards 28000.
Shanghai (3696.69, +30.35, +0.83%) has risen today. The index has resistance at 3700 which if holds can send the index down to 3600. If Shanghai manages to break above 3700 then the next level to watch will be 3725.
Nifty (17511.30, -5.55, -0.032%) remained in a range of 17400-17535 before closing at 17511.30 on Friday. The resistance at 17600/800 can hold for now and we can see a consolidation before we see any sharp movement.
Sensex (58786.67, -20.46, -0.035%) dipped slightly on Friday. A strong break above 59000/59500 is needed for the view to be bullish towards 60000. Else a range between 58000-59000 can hold for the near term
COMMODITIES
Crude prices have moved up well but have immediate resistances coming up which if holds can produce a fall again soon. Watch price action near 77 on Brent and near 73 on WTI which if hold can produce a decline. Gold and Silver are ranged within 1760-1790 and 21/22-24 respectively and may move up which supports hold. Copper can trade within 4.40-4.25 before breaking on either side of the range.
Brent (76.10) has risen back towards resistance near 77 which can hold and produce a dip to 74-72 again. Any break above 77 would prove our view wrong and force us to look at higher targets of 78/79.
WTI (72.66) fell from trend resistance at 73 last week bust has attempted to rise again. We may expect a range of 73-70 to hold for now before either falling sharply in the medium term towards 68-67 or trying to break above 73. We would be cautious at current levels.
Gold (1786.20) is likely to be ranged within 1790-1760 in the near term. Any break thereafter will indicate further clarity on direction.
Silver (22.29) has support at 22 and 21 which are likely to hold and produce an eventual rise to 24-24.50.
Copper (4.3245) fell is ranged within 4.40-4.25 and may continue so for the next few sessions.
FOREX
Most currency pairs are volatile and within a broad range. Unless the range break on either side, it may not give clarity on further direction from current levels. Hence we may expect the consolidation to continue for a few more days. Dollar Index and Euro remain within 97-95.50 and 1.12-1.14 region while EURJPY can trade within 127.50-129. Aussie and Pound are seen within 0.72-0.73 and 1.3350-1.34 respectively while USDCNY is falling well from 6.38/39 and looks bearish towards 6.35/34. USDINR can test 76.00-76.20 on a rise above 75.80. Watch price action at 75.80 today. A fall can drag the pair towards 75.50. USDJPY is ranged within 112-114.
Dollar Index (96.172) has been ranged below 96.50 for the last few sessions and unable to break on either side of the 97-95.50 range. A break on either side is necessary for the index to give clarity on further direction.
Euro (1.1298) is holding below 1.1355 and has immediate support at 1.1290 which if holds can again push the Euro back towards 1.1355. Broad range of 1.12-1.14 is holding well. A break on either side would be needed in the longer run to indicate further direction. Till then near term is likely to continue within the sideways range.
EURJPY (128.26) has risen from 127.80, slightly above the support at 127.50. A range of 127.50-129 may hold for the near term.
Aussie (0.7166) is in a range below immediate resistance at 0.72. While below 0.72, Aussie can trade within 0.72-0.71 before rising higher towards 0.7250-0.73. View is to see a slow rise in the near term.
Pound (1.3252) has bounced from support near 1.3150 and while it holds there is scope for a rise to 1.335-1.34 soon.
Dollar-Yen (113.54) is holding well below 114 but can fall to 112.70-112.50 on the downside. Upside is likely to be limited at 114 just now. We would wait to see a break on either side for more clarity.
USDCNY (6.3621) tested 6.3820 on Friday and has been falling sharply from there. There is scope for a fall to 6.34 again on the downside. Overall view is bearish while below 6.40-39
{USDINR (75.77) moved up sharply on Friday to close above 75.75. Any break above 75.80 if seen today can open up chances of 76.0-76.20 on the upside before falling back towards 75.50 or lower.
INTEREST RATES
The US Treasury yields remained stable on Friday. The strong surge in the US CPI data on Friday did not have a major impact on the yields. We retain our view of seeing a rise within the expected range in the coming days. The US Federal Reserve meeting on Wednesday will be the next key event to watch. The German yields remain lower and are keeping intact our bearish view of seeing a further fall from here. The European Central Bank (ECB) policy meeting is on Thursday this week. The Indian 10Yr and 5Yr GoI have risen back sharply on Friday and look mixed to move either way from here within their sideways range.
The US 2Yr (0.67%), 5Yr (1.26%), 10Yr (1.50%) and the 30Yr (1.89%) yields remain stable after having fallen on Thursday last week. The view remains the same. 1.35%-1.65% on the 10Yr and 1.7%-2% on the 30Yr is the broad possible range of trade now. Within this, chances are high for the yields to move up towards 1.65% (10Yr) and 2% (30Yr) while they remain above 1.4% and 1.8% respectively.
The German 2Yr (-0.71%), 5Yr (-0.59%), 10Yr (-0.35%) and 30Yr (-0.04%) yields remain lower and stable. The bearish view remains intact as the 0.05% (30Yr) and -0.25% (10Yr) had held well last week. We retain our view of seeing a fall to -0.45% / -0.5% (10Yr) and -0.1% / -0.2% (30Yr) in the coming weeks.
The Indian 10Yr (6.3699%) and 5Yr (5.6857%) have bounced-back sharply on Friday contrary to our expectation to dip further within the expected range. The near-term outlook is mixed. The yields can go on either side within their 6.3%-6.4% (10Yr) and 5.62%-5.73% (5Yr) range in the coming days.
