STOCKS
Overall stocks are mixed. Some scope of rise is visible for the coming sessions.
Dow (20651.30,-000.03%) has bounced from very short term support near 20510. While that holds, the index could bounce back towards 20780 in the next couple of sessions.
Dax (12139.35, -0.50%) tested support at 12049 on the downside before closing at slightly higher levels yesterday. While the support holds, there is a fair chance of moving up towards 12200-12400 in the near term. Near term looks bullish.
Shanghai (3278.70, -0.31%) is unable to break above 3280 just now but could eventually test 3300 on the upside. Near term looks bullish.
Nikkei (18521.64, -1.21%) has come off below 18650 again and this could be an indication of a sharp fall as mentioned in our earlier editions. Initial target is 18200 for the coming sessions.
Nifty (9237, +0.61%) bounced back from 9174 instead of testing the lower support at 9130. Looking at the daily channel, there is scope of rising towards 9300-9400 in the medium term.
COMMODITIES
As we had expected yesterday, weakness in Dollar index (from 101 to 100.61) has boosted bullion significantly. Gold (1279) has closed above its crucial resistance of 1265. If it will penetrate 1285 on a daily basis then we may see 1300 levels within a couple of days. Due to the near term overbought nature, we may see some correction thereafter but buyer could take every dip as an opportunity for fresh buying.
Similar kind of move has been seen in silver (18.39) also but it is still under its crucial resistance of 18.5. Initial signs of a possible bounce to 19 are visible but confidence will come only on a close above 18.55 levels.
Copper (2.60) has been stuck in the range of 2.55-2.70, which may go on for another week. In the medium term 2.55-57 are going to be a strong support now but a close below that could open up 2.50 and 2.45 levels respectively.
Brent (56.40) and WTI (53.54) are trading within the range of 55-57 and 53-55 and considering the short term overbought state, possibility of a near term correction can’t be ignored. We have US crude oil inventory data at 8.00 pm IST and the U.S. forecast is -0.1M. But a lower than expected decrease or an increase in weekly inventory could open up 53.60 levels for Brent and 51 for WTI respectively.
FOREX
The geopolitical anxieties have increased after North Korea’s threat of nuclear retaliation if attacked and have driven money away from the risk assets.
Dollar Index (100.75) is in a grinding decline which may keep it range bound in 100.00-101.50 for the next few days till it makes up its mind for the next directional move. Interim support at 100.35
All Euro (1.0596) has managed so far is a feeble bounce to 1.0630 from the support of 1.0550 but the chances of a retest of the support looks strong, below which comes 1.0450.
The rejection from our resistance of 111.60 has pushed Dollar Yen (1.0947) sharply below the support around 110.00, in line with our expectations. As long as it trades below 110.00, the chances of further decline to 108.25-107.85 remain open. The possibility of Nikkei (18516.04, -1.24%) going down to 18200 in the coming sessions increases the possibility of Yen strengthening. (Check Equities section)
Pound (1.2485) has achieved our immediate upside target of 1.2465 and wiped out most of the losses incurred last week which keeps it in the sideways mode in the broader range of 1.2350-1.2600. The consolidation phase may continue for a few more sessions.
Aussie (0.7490) consolidates in the lower levels but may resume the larger downtrend in the next few days for our downside target of 0.7450 and 0.7375.
Dollar-Rupee (64.50) has come off the highs after it nearly tested our resistance of 64.70. While 64.70 holds, Dollar-
INTEREST RATES
The US yields have fallen sharply and is testing support at current levels. The 5YR 91.82%), 10yr (2.29%) and the 30YR (2.92%) are down from 1.88%, 2.35% and 2.98% respectively but could bounce back in the coming sessions,
The German-US 2Yr (-2.08%) and 10Yr (-2.08%) have moved up sharply and could both head higher towards -2.05% in the near term. Euro could see some strength in the next few sessions before again coming off in the medium term.
The UK-US 10YR (-1.23%) has started rising and could test resistance near -1.13% in the coming sessions. This could prevent further losses on the Pound just now and could keep the currency stable against the US Dollar.
