STOCKS
Major indices looks bullish with strong upward momentum just now.
Dow (22118.86, +0.28%) looks bullish for the coming sessions towards 22400 where a slight pause could be seen. Interim resistance is visible at 22000 but if the upside momentum is strong, it could break on the upside this week itself.
Dax (12524.77, +0.40%) is clearly headed towards 12750-13000 in the coming sessions. While the upside momentum looks strong just now, the upward rally is likely to continue in the near term.
Nikkei (19869.82, +0.47%) is headed towards 20000, its immediate resistance above current levels. A break above 20000 if seen in the near term could take it higher towards 20200 over the medium term. Near to medium term looks bullish.
Shanghai (3373.44, -0.18%) seems to be trapped in the 3400-3350 region, 3400 being an important resistance. While below 3400, we may look for a slight corrective dip in the near term. But if the index continues to trade sideways, it could possibly be a base building for a sharp surge in the near term.
Nifty (10093.05, +0.87%) could re-test 10150, the previous high seen on 1st Aug’17. If 10150 hold, we could see a corrective fall towards 10000 or lower again; else a rise past 10150 could turn bullish for the coming sessions.
COMMODITIES
Gold (1336) moved higher and trading within the range of 1327-1363.We will remain on the buying side while it is trading above 1325-27 regions. Only a close below 1325 could open up 1303 levels. Silver (17.93) was almost unchanged and trading within the range of 17.40-18.05.Only a close above 18.05 could open up higher resistances of 18.17 and 18.50 respectively.
Copper (3.03) has also come down in line with our expectation and trading within the range of 3.00-3.16 and a daily close below 3.00 could open up 2.90 levels as well.
No directional move had been seen in Brent (54.16) as it is hovering around the pivot of its near term trading range of 53.30-55.60.Only a close below 53.30 could open up 51 regions, otherwise it might move up towards 55. WTI (48.26) is also trading within its narrow range of 47.22-50-48.70. Only above 48.70, the higher resistance of 50.20 can come into consideration. Today we have U.S. crude oil inventory data at 8.00 pm with an expectation of a surplus of 4.1MB.
FOREX
Decent bounce from 1.1925 on the Euro (1.1980), just above our Support level of 1.1900. Look for a slow rise towards 1.2050 over the next few days.
Dollar-Yen (110.05) rose to 110.29 contrary to the expectation of stalling between 109-110. If it breaks above immediate Resistance at 110.50 now, it may well see 111+. If so, the Euro-Yen (131.85) which has also moved up sharply to test our target of 132, might break above the near-term Resistance at 132.25-50. Failure to break above 110.50 in Dollar-Yen could lead to consolidation between 110.50 and 109.50.
As it turns out, the Pound (1.3310) was able to break above 1.3270 convincingly and may test 1.3400-20 in another few days. Note, however, that the 1.34-45 region is a good long-term Resistance zone and may therefore run into good selling there.
The Aussie (0.8032) saw only a minor dip to 0.7996 yesterday, well above our Support at 0.7965. Look for further rise to 0.8070 in a few days. Our target 0.82 is still valid, but may take a couple of weeks to achieve.
Dollar-Yuan (USDCNY = 6.5286) has dipped a bit after testing 6.55. Need to see if it will start moving up again today towards our target of 6.5750.
Dollar-Rupee trades near 64.00, slambang in the middle of the 63.80-64.20 range. Dollar Index (91.80) may still move up towards 92.25 over the next few days.
INTEREST RATES
The benchmark US 10Yr yield (2.16%) moved higher and trading close to its immediate resistance of 2.16-18% regions. Only a close above that could open up much higher level of 2.22-25%.
EUR/USD was almost unchanged as the German-US 2 Yr Spread (-2.08%) and the German-US 10Yr Spread (-1.76%) moved lower.
The Japanese yields has rebound after hovering around their respective areas of supports. The Japan 10Yr yield shoot up at 0.02% levels along with the 30Yr (0.82%) and the 5Yr (-0.12%) respectively.
UK Gilts yields also moved higher as UK 5Yr and 20Yr Gilt Yields (5Yr 0.47% and 20Yr 1.58%) are up by 2-3 pips. The UK 10Yr (1.04%)is also moved higher with an immediate resistance poised at 1.07% regions.
