STOCKS
Dow (20728.49, +0.33%) rose a bit yesterday and could re-test 21200 resistance on the upside in the next week. Immediate upside could be limited just now.
Dax (12256.43, +0.44%) has moved up in line with our expectation, breaking above 12220. Immediate resistance is visible near 12300 which if holds could push the index down to 12100 in the early next week before it again picks up the upward momentum.
Nikkei (19204.70, +0.74%) is trading higher but overall remains stable. Trade within 19350-19000 over the next couple of sessions is possible.
Shanghai (3223.28, +0.41%) bounced back slightly from levels near 3200 led by a rise in the shipping and infrastructure stocks. Support near 3150 could be tested if 3200 breaks on the downside; else we could see the index move up towards 3250-3275 in the next week.
Nifty (9173.75, +0.33%) could be headed towards 9200-9280 as mentioned yesterday. Near term channel uptrend remains intact and the index looks bullish for the coming week.
COMMODITIES
A stronger Dollar (100.56) has affected all the metals but Crude keeps strong for the week.
Gold (1240.96) has been dragged down to the lower end of the near term range of 1240-60 by the Dollar strength and a break below 1240 may pull it down lower towards 1225-20 levels. The weakness may persist till the resistance 1260 is overcome.
With the Gold-Silver ratio (68.61) crashing in the last few days, Silver (18.06) has been less affected by a stronger Dollar and trades comfortably in the range of 17.82-18.35, which may continue for a couple of sessions more.
Copper (2.668) has been stuck in the range of 2.55-2.70 for 4th consecutive week running with no visible intent for a breakout. The horizontal trading may go on for another week.
Expectation of prolonging the production cut by a few OPEC countries like Kuwait keeps driving Brent (52.82) and WTI (50.13) higher. The target of 53.36 for Brent is close while WTI may test the near term resistance 50.80-51.10.
FOREX
With a few members of the Fed taking a more hawkish stance with talks of more than 3 rate hikes this year, Dollar has got a boost.
Dollar Index (100.53) has rallied just as expected and the targets of 100.70-101.00 may be achieved within the next 2-3 sessions with immediate support coming up at 99.90.
Euro (1.0680) has weakened much more than expected as it trades below 1.07 levels. If the support of 1.065 fails to hold now, then deeper levels of 1.0580, even 1.0500 may come into consideration in the near term.
A rise in Core Consumer prices for the second consecutive month and the lowest reading in the unemployment data in the last 22 years have driven Dollar-Yen (112.02) above the resistance of 111.50-60 as expected and now a break above the interim resistance of 112.15 may push it higher towards 112.80 and 113.40.
Pound (1.2486) is firming up the range of 1.2350-1.2600 in which it may trade horizontally for the next few sessions with no directional bias.
Aussie (0.7645) has been the quietest currency in the last couple of sessions and the current trendless state may prolong the sideways consolidation in the range of 0.7600-0.7750.
Dollar Rupee (64.92) enjoyed a pause day yesterday but the current price of 64.85 in the NDF market indicates no impact of global Dollar strength on the pair. Our target/support remains unchanged in 64.80-60 and resistance at 65.00 and 65.20.
INTEREST RATES
The US-UK 10yr (-1.30%) continues to fall and may test levels near -1.38% in the coming sessions. While the yield spread moves lower, Pound may either consolidate sideways or move lower to re-test 1.23-1.21 again in the medium term.
The German-Japan 10Yr (0.26%) has been falling from resistance near 0.40% and looks bearish in the near term, indicating a weaker Euro against Japanese Yen in the near term.
The US-Japan 10YR (2.35%) is holding above the immediate support and while that holds, it could move higher towards 2.4% taking up dollar-Yen and Nikkei with itself.
The 10Yr GOI (6.866%) could test levels near 6.80-6.78% before bouncing back to higher levels. This fall towards 6.78% could lead to some more Rupee strength in the near term.
