STOCKS
Dow (23548.42, +0.04%) is almost stable but the upside is open to test 23800 in the coming sessions. Near to medium term looks bullish.
Dax (13468.79, -0.07%) is likely to trade sideways in the 13500-13400 region for a few sessions before again resuming the uptrend. A break below 13400, if seen could take it down to 13300-13200 in the longer term.
Nikkei (22724.86, +0.78%) continues to rise higher and our earlier target of 22666 was unable to stop the upward momentum. Looking at the 3-day candles, there is scope of testing 23000-23500 levels in the coming sessions before a medium term top formation takes place. Important to see if 115 could be a decent top for the medium term on Dollar Yen. A corrective dip in Dollar Yen could prevent further rise in Nikkei.
Shanghai (3406.62, +0.54%) bounced back from 3360 as expected and could now move up towards 3425-3430 levels in the near term. Overall the short term upward channel from May’17 is likely to remain intact with an upside potential of 3450 in the medium term.
Nifty (10451.80, -0.01%) stayed above immediate support near 10400 and while that holds, the index could be sideways range-bound in the 10400-10500 region. In case it breaks below 10400, we could see a test of 10300 or slightly lower in the medium term.
COMMODITIES
Gold (1279.64) has bounced back from immediate support near 1265 as expected. Range-trade within 1260-1290 is accounted for the week with a possible extension towards 1295-1300 levels. Note that 1260 is a decent support as seen on the daily candles and is likely to hold in the coming sessions.
Both the Brent (64.14) and the WTI (57.25) have moved up sharply yesterday after news of high profile arrests in Saudi Arabia on an anti-corruption crackdown. Brent is trading near immediate resistance and could possibly pause before again moving up higher while WTI can test 59 before coming off from there.
Copper (3.1535) looks bullish towards 3.25-3.30 for the coming sessions and could well remain above support of 3.05 this week. Near to medium term looks bullish.
FOREX
Slight dip in the Dollar Index (94.78) which has come down from an overnight high near 95.07. The Euro (1.1608) has also recovered a bit from a low near 1.1580. However, the overall uptrend in the Dollar Index remains in force while above 94.50 and the overall downtrend remains in force on the Euro while below 1.1620 (immediate Resistance) and 1.1670 (higher Resistance). The targets are 95.50 on Dollar Index and 1.1550-30 on the Euro.
Dollar-Yen (113.78) had risen to 114.73 yesterday morning but came off sharply from there. It may try to test lower levels of 113.40 over the next couple of days while below 114.50. The Euro-Yen (132.16) has come down alongwith Dollar-Yen. Look for a relatively wide range of 131-134 over the coming days.
As it turns out, the Pound (1.3166) held above trendline Support near 1.3050 and has moved higher. A test of 1.33 looks more possible now. The Aussie (0.7686) also moved up a bit from 0.7630 but looks mixed between 0.7630-7730 for a few days.
Dollar-Yuan (USDCNY = 6.6265) trades a wee bit lower and could spend some time sideways between 6.61-65 for a few days. Dollar-Rupee (64.68) trades a little lower near 62.65 on the NDF. Support should be available in the 64.60-55 region.
INTEREST RATES
Bond Yields continue to dip across the globe even though Brent (64.10) has seen a sharp rise. This is a bit of a surprise for us.
In USA, the 30Yr (2.80%) may have an important Support near 2.78%. This is to be watched. The Yield Curve has been flattening sharply over the last few days but maybe there is some scope for a bounce from near current levels for the 30-5 (0.81%) and 30-10 (0.47%).
The German 10Yr (0.34%) has dipped further and now trades well below 0.40% suggesting that the uptrend since -0.1% (Oct-16) could be breaking.The German-US 10Yr Spread (-1.99%) has bounced from -2.05% over the last few days, but could be vulnerable to a fresh fall from current levels.
Japanese Yields (10Yr 0.03%, 5Yr -0.12%) have been falling over the last few days. The 5Yr may find Support near -0.14%.
