STOCKS
Global indices extended their upmove on Friday. However, most of the indices are hovering near their key resistances. This week is going to be crucial to see whether they manage to breach those hurdles or not.
Dow Jones (25,063.89, +64.22, 0.26%) has come-off after making a high of 25,193 on Friday. The daily candle on Friday indicates that the Dow seems to be lack strong follow through buying at higher levels. Inability to sustain above 25,000 in the coming sessions can drag the index lower to 24,300 in the coming days.
DAX (11,180.66, +7.56, 0.07%) looks mixed in the near term with an equal chances for a dip to 11,000 or a rally to 11,400.
Nikkei (20,897.85, +109.46, +0.53%) has come close to its crucial resistance level of 21,000, which if holds can pull the index lower to 20,500 and 20,450. But a strong break above 21,000 could increase the bullish momentum going forward. We will have to wait and see.
Shanghai (2,618.23, +33.66, +1.30%) extended its rally on Friday and is heading towards the next resistance level of 2,650 as expected. The Chinese markets are closed for this whole week on account of the New Year holidays.
The Indian benchmark indices has come-off after cheering the Interim Budget. The resistances at 36,860 on the Sensex (36,469.43 +212.74 +0.59%) and 10,985 on the Nifty 50 (10,893.65, 62.70, 0.58%) were tested on Friday and are holding well as of now. While these resistances hold Sensex can fall to 35,500 and the Nifty 50 can test 10,700-10,600 in the coming days.
COMMODITIES
While gold, silver and copper are likely to see a near-term dip before resuming the overall uptrend, oil is likely to test a key resistance and can remain sideways while this resistance holds.
Gold (1315) has come-off after failing to breach 1320 over the last couple of trading days. While the broader view remains bullish, an interim dip to 1308-1305 is possible before gold heads towards 1350-1360. Similarly, Silver (15.85) can dip to 15.70-15.60 before resuming its uptrend to test its resistance at $16.50-$16.55.
Copper (2.77) can dip to 2.75 and 2.73 before reversing higher towards 2.82-2.83.
WTI (55.37) and Brent (62.90) have surged again breaking above $54 and $62. A test of $56 on WTI and $64 on the Brent is likely in the near term. As mentioned of Friday a sideways movement is possible while Brent remains below $64 and WTI below $56. Brent can trade in the $59-$64 range and WTI in between $50-$54.
FOREX
Major commodities are stable. Some strength in the US Dollar is possible over the next couple of sessions that could keep the other currencies a bit weaker today.
Dollar Index (95.62) and Euro (1.1453) are almost stable. Dollar Index could rise towards 96.10 while Euro could trade within 1.1360-1.1500 region.
Euro-Yen (125.47) has risen and has room on the upside towards 126.00-126.60 from where a dip back towards 124 is possible.
Dollar Yen (109.57) could rise to test immediate resistance near 110.20-110.50. A rejection from there would push back the prices back towards 108.0-107.5 levels.
Pound (1.3077) has immediate support at 1.3050 and while that holds, a rise back to 1.32 could be possible. Failure to sustain above 1.3050 could turn bearish for the medium term towards 1.29 again.
Aussie (0.7241) also has immediate resistance at 0.73 which if holds could push the price to lower levels of 0.72-0.715 in the near term. Watch price action near 0.73 for near term direction.
USD-CNY (6.7425) has risen from 6.6917 and while that holds, the Yuan could weaken towards 6.80 again in the coming sessions.
Dollar Rupee (71.25) could possibly attempt a test of 71.40-60. Note that this is an immediate resistance zone and while that holds, Dollar-Rupee may gradually come off towards 71 again.
INTEREST RATES
The US yields have risen slightly. The 2Yr is up from 2.47% to 2.51%, 5Yr has also risen from 2.48% to 2.51% while the 10yr and the 30Yr are stable at 2.69% and 3.03% respectively. The 5Yr is testing immediate support at current levels while the 10Yr and 30Yr look bearish for the coming sessions.
The Japan yields are trading low and look bearish for the very near term. The 5YR (-0.17%), 10YR (-0.02%) and the 30Yr (0.61%) could fall by 1-2bps over the next couple of session.
The Indian 10YR GOI (7.61%) could rise towards targeting 7.70% on the upside in the next 2-3 sessions. The rise in the yield could bring in some weakness in the Rupee.
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