STOCKS
Dow (20071.46, +0.94%) rose sharply on Friday, possibly on news of Trump’s order to roll back the Dodd-Frank Act that was signed by Barack Obama back in 2010. While the markets could take it positively, there could be some more rise in the next few sessions.
Dax (11651.49, +0.20%) is testing support near 11600 and while that holds, the index could try to move up towards 11820-11920 levels again in the near term. But for an immediate rise we need confirmation above 11700 just now.
Nikkei (18974.07, +0.30%) is almost stable near current levels and could possibly consolidate within the 18651-19258 region for some more sessions. Immediate direction is unclear just now.
Shanghai (3155.81, +0.50%) may test levels near 3125-3100 before again bouncing back to higher levels.
Nifty (8740.95, +0.08%) is trading just at resistance levels and if that holds, we could possibly see a small correction in the near term towards 8600 or lower. Only a break above 8760 can we vouch for medium term rally to continue targeting levels near 8800 and higher.
COMMODITIES
The Trump-induced political risk has kept the global investors interested in Gold (1223.81) along with a weak Dollar Index (99.72). It can test the near term resistance zone of 1230-40 but a turnaround in Dollar (check Forex section) may weaken Gold from the higher levels.
Silver (17.60) has managed to hold above our support of 17.50-30 and that may push it to 18.00 or even 18.40 in the near term but any weakness in Gold may affect this precious metal too.
For the last 6 weeks, both Brent (56.88) and WTI (53.89) are stuck in very narrow ranges of 53-58 and 50-55 respectively. This week, a resolution to the upside may materialize and Brent may test 60 while WTI may rise to 58.
Copper (2.636) is finding interim support at 2.61 but a break below 2.60 may drag it down to 2.55-50. The technical structure is damaged from a larger perspective and the resistance of 2.75 may not be tested soon.
FOREX
A weak wage growth in the US has keep the Dollar weak but the chances of a sharp bounce by the end of the week can’t be ruled out.
Dollar Index (99.72) has been trading flat for the last 4 sessions with the downside momentum slowing down considerably but it still needs an initial break above 100.25 to take it higher to the major resistance of 101.00. While the chance of a retest of the long term support at 99.00 can’t be ruled out yet, the bulls may try for a rally in the next few sessions.
Euro (1.0780) is stalling near the resistance zone of 1.0800-50 and a failure to rise towards 1.0900 soon may encourage the sellers to take it to the major support of 1.0680 in the near term.
Dollar-Yen (112.45) hasn’t managed to break out of the 5-day range of 112-114 yet. Repeat – the next directional move depends on the breakout direction from this range. Bidirectional possibilities exist at this point despite the downtrend. Wait and watch.
Pound (1.2485) remains weak and a break below 1.2400 may drag it deeper down to 1.2250 levels in the coming days. The chances of a rise beyond 1.2700 look weak at this point.
The pause for Aussie (0.7664) continues after its sharp rally to 0.77 but the chances of the currency rising to the target/resistance of 0.7750 in the next 2-3 sessions remain strong.
Dollar-Rupee (67.37) had closed near the low of the day, implying extended weakness and may decline to 67.00-66.90 in the early part of the week, where we would prefer to buy some. Immediate resistance comes at 67.50 and 67.70.
INTEREST RATES
The US 30Yr (3.08%) yield has risen and is almost ready to test the 3.10% resistance which if holds could push back the yields towards 3%. But in case the 3.10% level breaks on the upside, we could expect a test of major long term resistance near 3.25% in the near term. The 10YR (1.90%) and the 5YR (2.46%) yields on the other hand, have fallen slightly.
The German-US 2Yr (-1.95%) also faced resistance near -1.94% and while that holds, a slight dip towards -1.98% to 2.00%
Is possible; this could also pull down Euro a bit.
The UK-US 10Yr yield (-1%) has fallen sharply from resistance near -0.92% and could head towards -1.05 to -1.10% in the near term. This could indicate some bearishness for the Pound (1.2488)
The UK yields are testing immediate resistance levels and could come off in the medium term. The 5Yr (0.51%), 10Yr (1.46%) and the 20YR (1.92%) may head towards 0.48%, 1.36% and 1.80% respectively.
