STOCKS
On Friday, Dow (24360.14, -0.50%) and Dax (12442.40, +0.22%) both saw highs above immediate resistances on daily candles. As we mentioned before, a decisive break of resistance could lead to a decent upmove towards 25000 and 12800-12900 respectively. However, if the indices again come off from resistances, they could target 23250 (horizontal support for Dow) and 12167 (21 DMA for DAX) over the next 1-2 weeks.
Nikkei (21829.77, +0.23%) has just broken resistance in the downward channel on daily and 3 day candles and could move up towards the 21 week moving average near 22300 before coming off again from there.
Shanghai (3134, -0.79%) could test support in the 3125-3075 zone (seen on daily and 3 day candles) this week, after which it could bounce from those levels.
Nifty (10480.60, +0.21%) as per our expectation, saw a high of 10520 on Friday before closing lower near 10480. It could continue to stay below immediate resistance on daily candles near 10550 this week. There are 21 moving averages on 3 day and weekly line charts near 10440-10470, which could also act as decent resistance levels in the near term. Sensex (34192.65, +0.27%) could see some resistance from the 21 moving average on 3 day line chart near 34100. It is also near resistance on daily candles and could probably dip towards 34000-33750 this week.
COMMODITIES
Brent (71.93) and Nymex WTI (66.84) have come off slightly from highs near 73 and 67.5 respectively. We would have to see if geopolitical developments of Friday (USA announcing strikes on Syria) have some impact on crude markets this week. Overall, both Brent and WTI could slowly creep up towards 74 and 68 respectively and then come off from there.
Gold (1348.90) continues to stay below resistance near 1370 and should continue its ranging in the broad 1320-1370 zone this week as well.
Copper (3.0585) saw a sharp fall from levels near 3.15 last week and has even broken below support on daily candles. If this break sustains, it could move lower towards support on 3 day candles near 3.00. However it might also find some support at current levels from 13 and 21 day moving averages (near 3.05).
FOREX
Dollar index (89.74) is trading near levels of 89.7-89.8, seen on Thursday and Friday. It is likely to move down towards support on daily candles and weekly line chart near 89.25 this week. As mentioned on Friday as well, there are 13 and 21 moving average lines on the 3 day line chart which could provide some resistance at current levels and push it down. US Retail Sales data (due later today) could hold significance for the course of the Dollar Index this week.
Euro (1.2342) : After having dipped to support on 3 day candles near 1.23 late last week, Euro has stayed above this support as we had expected. It should now attempt another rise towards 1.24 (seen as immediate resistance on daily line chart). However, in case it dips now, the downside could again be restricted by support on daily candles near 1.2300-1.2275.
If Euro rises beyond 1.24-1.2425, it could then target previous highs near 1.26 (or max, go up to 1.28), from where a medium term correction could be possible. A straight rise past 1.26-1.28 would imply medium term bullishness for the Euro.
Dollar Yen (107.20) saw a high near 107.8 on Friday, thereby equaling its previous high seen in Feb end. As we had expected, it has come off from that high towards 107.20 currently. The 21 moving average on 3 day line chart is also near 107.36 and could push Dollar Yen down further. We might well see Dollar Yen breaking below 107 this week.
Euro Yen (132.31) has resistance near 132.5-133.0, being provided by 21 moving averages on 3 day and weekly line charts. It could range between 132.5-132.0 this week as the Dollar Yen could turn bearish, while the Euro stays below 1.24.
Pound(1.4262) saw a high near 1.43 on Friday and might re attempt a test of 1.43-1.435 this week (which is seen as interim resistance on 3 day lines and is also the previous high seen in Jan end). In the medium term, a breach of 1.430-1.435 could imply bullishness towards 1.46 (seen as resistance on weekly line chart).
Dollar Rupee (65.2075) – Dip this week might be limited to 65.15-10-05.
INTEREST RATES
US yields continue to stay elevated in their respective channels. We need to see if Friday’s announcement by the US of strikes on Syria would have any impact on yields. One way it could possibly affect yields is by making investors risk averse in the near term, thereby seeing flows from stocks to debt, thereby taking yields down. However, if the Retail Sales data later today complements the positivity created by the unemployment claims data last week (as well as the US Fed’s hawkishness), then we could see yields rise further.
US 10 Yr Yield (2.832%), 30 Yr (3.036%), 5 Yr (2.677%), 2 Yr (2.3648%):
The 10 Year yield continues to stay near resistance on short term chart near 2.84% and could see a dip soon from here.
The 30 yr is also near resistance at 3.04% on short term chart and should dip back towards 3% this week.
