STOCKS
Almost all indices look positive and bullish for the week except Shanghai which could possibly remain stable.
Dow (22331.35, +0.28%) could test 22400-22600 levels in the near term and Dax (12559.39, +0.32%) looks potentially bullish on the 3-day candle chart having a fair chance of moving up towards 12800 while above 12400. Thereafter a corrective fall from 12800 could be expected. Also note some rejection could come from levels near 12650 which is a decent resistance below 12800.
Nikkei (20197.56, +1.45%) also looks bullish just now and could test 20500-20800 before coming off from there. Note that for the long term 21000 is a crucial resistance and we do not expect a break above that in the coming weeks. Rejection from 20800-20700 looks more likely.
Shanghai (3357.05, -0.17%) is also potentially bullish to stable while above 3350. Only on a break below 3350, we may look at lower levels of 3325-3300. For now, while 3350 holds, the index could move up towards 3375-3390 again. has bounced back from levels near 3350 and while that holds, we may see a rise towards 3400 in the near term. A break below 3350, if seen could take the index lower towards 3325. Need to watch price action at current levels.
Nifty (10153.10, +0.67%) is all set to hit new highs near 10200-10300 levels in the coming sessions. But note on a longer term there could be a sharp fall on the index from levels below 10400-10300. For the near term, the index has some more room on the upside.
COMMODITIES
Commodities are all mixed. Precious metals look bearish over the next couple of sessions while Crude prices may remain stable. Copper looks bullish for the coming sessions.
Brent (55.39) has immediate resistance near 56-57 region and could come off from these levels in the near term, again targeting levels near 55-54 in the coming sessions. A break above 56 could take it higher towards 56.65 but chances seem less just now.
WTI (49.87) is likely to consolidate sideways within 50.50 and 49.10 for a few sessions. Support near 49 is holding well for now.
Gold (1308.29) and Silver (17.18) are down as expected. Gold could test 1296 over today and tomorrow before again attempting a bounce above 1300. Silver could come off towards 17.00 in the near term.
Copper (2.9680) has bounced a bit from support near 2.95 and while that holds, the price could rally towards 3.05 in the near term.
FOREX
Although the Euro (1.1965) and Aussie (0.7965) retain their uptrend, we need to watch their Supports. This is the inverse of the Dollar Index (91.96) which remains in a downtrend, but we need to watch the Resistance at 92.50.
Yesterday’s reading remains valid on the Euro (1.1965) that "Two possibilities from here – either further sustained rise past 1.2035-50, or range trade between 1.2000 and 1.1850. The first three days may be quiet, waiting for the FOMC on Wednesday." Note though, that the overall uptrend remains in force while above 1.1850.
A bit of profit-taking in the Pound (1.3515) after a new high of 1.3619 was seen yesterday. Slightly greater chances now of a further dip towards 1.3450. Importantly, there are some chances of long-term Resistance at 1.38.
Increasing chances that Dollar-Yen (111.55) may rise further towards 113.50 over the next couple of weeks. The way to the upside is being cleared by the rise in Euro-Yen (133.45) well above 133.
Need to watch Support at 0.7960-50 on the Aussie (0.7965) which has not been able to build on its rise above 0.80 so far. Still, the uptrend remains valid while the Support holds. But needs to be watched carefully.
Dollar-Yuan (6.5917) has risen past 6.5750 and is within kissing distance of 6.60. Dollar-Rupee (64.13/14) might test 64.20 again. Need to see if that holds or not. Be careful there, the tide could just be turning.
INTEREST RATES
Minor uptick in German yields (10Yr 0.45%, up from 0.44% and 30Yr 1.25%, up from 1.23%). This is counterbalanced by the rise in the US 10Yr (2.22%, up from 2.20%), keeping the 10Yr German-US Spread (-1.77%) steady. This is the crucial variable to watch. A fall below -1.79% could weaken the Euro.
The US Yield Curve has been flattening over the last one week. However, we note a crucial Support near the current level (0.98%) on the 30-5 Yr Spread.. A bounce from here would lead to Curve steepening, suggesting chances of an interest rate hike ahead.
Resistance are holding on UK Gilts, at 1.30% on the 10Yr (1.30%) and 0.75% on the 5 Yr (0.73%). If the FOMC hints at a rate hike, the Pound could see profit-taking. A hint on the other side (delay in rate hike) could push the Pound up towards 1.38.
The Japanese 10Yr (0.03%) is dipping again within its overall downtrend, suggesting decent chances of further rise in the Dollar-Yen towards 113.50.
Over to the FOMC tomorrow and the BOJ on Thursday.
