STOCKS
Dow (23422.21, -0.17%) is coming off from medium term resistance on the 3-day candlescoming from Feb’17 and the corrective dip is likely to last for some more time heading towards 22800 in the medium term. A break above immediate resistance could take it up towards 24000.
Dax (13127.47, -0.42%) is currently in the corrective dip phase and is likely to test decent support near 13000-12900 from where a small rise is possible before resuming the longer term fall towards levels below 12900. Immediate view remains bearish.
Nikkei (22527.21, -0.68%) made a high of 23382.14 on Wednesday last week and has been coming off thereafter. Near term top formation seems to have been completed, paving way for testing lower levels of 22250 and lower in the coming sessions.
Shanghai (3443.75, +0.32%) is firmly up unlike the other major indices. While above 3440, the index looks bullish and is likely to move up this week towards 3475 and maybe higher.
Nifty (10321.75, +0.12%) may test immediate support near 10250 which could produce a slight bounce back to 1040 or higher levels. A fall below 10250 could take it lower to test 10100.
COMMODITIES
Support near 1270-1260 region is holding well for Gold (1276.60) and while that holds, an eventual rise towards 1300 is possible in the coming sessions. Sideways trade within 1300-1260 region is possible for some sessions.
Brent (63.56) has immediate resistance near 65 which is likely to hold for some time keeping the price range-bound within 63-65 region. Thereafter upside levels of 66-67 would open up and leave a 50-50% chance of either moving up towards 66-67 or come down to test 62-61 levels.
WTI (56.80) could trade in the 56-58 region for the coming sessions. Upside chances of testing 59 looks possible. A break below 56, if seen could open up chances of a fall towards 55 in the longer run,
Copper (3.0860) is testing support just at current levels and if that holds, the price could bounce back towards 3.15-3.20 else could initiate a fall towards 3.
FOREX
Overall, the Dollar Index (94.53) has been able to maintain its strength from Friday, with all currencies trading a tad weaker against the US Dollar. Decent Support seen in the 94.35-20 region, with chances of new rise towards 95+ in the next couple of weeks.
The Euro (1.1650) remains below 1.1665-1700 as the German-US 10Yr Spread (-2.01%, see Interest Rates below) fall again. Further Resistances seen in the 1.1725-45 region.
We have to consider chances of new rise in the Dollar-Yen (113.67) given that the crucial Support at 113.00 mentioned on Friday has held well and the US yields have risen sharply. For now, look for a sideways range of 113.10-114.40 over the next few days.
The Euro-Yen (132.47) is likely to trade sideways as well, suggesting that both the Euro and Yen are likely to rise/ fall in unison against the Dollar, suggesting again that the market is likely to see Dollar-centric trading for some days.
Dollar-Yuan (USDCNY = 6.4910%) trying to rise further. Look for strong upside if 6.65-66 is broken. Dollar-Rupee (65.1650) may test 65.20-30 in the near term and then come off a bit.
INTEREST RATES
Good rise in US yields in the run up to the US CPI data for Oct on Tuesday. The US 5Yr (2.05%), 10Yr (2.39%) and 30Yr (2.87%) have all moved up sharply. It will be interesting to see how the yields rise past their respective May ’17 highs. At the short end, the US 2Yr (1.66%) continues to be on a tear, rising steadily from 1.26% on 8th September.
As expected, the German-US 10Yr (-2.01%) has come off sharply from the Resistance at -1.97% mentioned on Friday.
Sharp rise in the US-Japan 10Yr Spread (2.34%) on the back of the rise in US yields. May look for levels above 2.40%.
