STOCKS
Global equities seem to be losing momentum. Among the major indices DAX looks vulnerable for a sharp fall while others like the Dow, Nikkei, shanghai, Sensex and Nifty can either consolidate or dip slightly before moving higher.
Dow (26341.02, -83.97, -0.32%) has come-off yesterday. The resistance-turned-support level of 26250 is holding well as of now. While above this support, the bullish view remains intact for a rise to 26500 and 26700. But a break below 26250 can take the index first lower to 26100-26000 before a rally to 26500-26700.
DAX (11963.40, -46.35, -0.39%) has failed to breach the key resistance level of 12045. While below 12000, it now looks vulnerable for a fall to 11800 or even lower levels.
The resistance at 21870 is holding well and Nikkei (21737, -24.65, -0.11%) has come-off slightly. A fall to 21500 cannot be ruled out while it remains below this resistance. As mentioned yesterday, a strong break above 21870 is needed for the index to move higher to 21930 and 22000 levels.
The rally in Shanghai (3236.65, -8.16, -0.25%) seem to have paused. A sideways consolidation between 3200 and 3280 is possible for some time before the uptrend resumes towards 3250.
(38700.53, -161.70, -0.42%) has been stuck in between 38500 and 39000 over the last few days. A decisive break above 39000 is needed to regain strength and rally to fresh highs of 39500 and higher. But while it remains below 39000, Sensex is vulnerable to break 38500 and fall to 38000 and 37800 in the coming sessions.
Nifty (11604.5, -61.45, -0.53%) has support in between 11550 and 11500 which might be tested in the near term. A bounce from this support zone can take the index higher to 11700 levels again. But a strong break below 11500 will leave Nifty under pressure for a fall to 11400.
COMMODITIES
Oil continues to trade strong as concerns on supply disruption due to fresh conflicts in Libya are supporting the prices. Gold and silver gets a breather and can move higher in the near term. Stable dollar coupled with a pull-back in the equities are supporting gold at the moment.
Gold (1299) has moved higher as expected. It has come-off slightly from around 1304. An immediate support is at 1294. While above this support, an upmove to 1305 and 1310 is possible in the near term.
Silver (15.24) has risen and is hovering around the 15.25-15.28 resistance region mentioned yesterday. If it sustains above 15.20, a strong break above 15.28 is possible which will then pave way for a test of 15.40 and 15.45.
Copper (2.93) is holding higher and is likely to test the 2.95-2.96 resistance region in the near term. A decisive break above 2.96 is needed for it to move further higher to 3.00 levels. A pull-back from 2.95-2.96 can drag it to 2.90 again.
WTI (64.55) has breached the important 61.8% Fibonacci retracement resistance level of 63.7 and is heading towards 65 as expected. This level will now act as a good support now. The current leg of upmove has the potential to target 68 and 70 levels in the coming days.
Brent (71.2) has gained momentum over the last couple of trading days. It keeps the bullish view intact for a test of 72.7 – the key 61.8% Fibonacci retracement resistance level. Supports are at 70.40 and then in between 70.10 and 70.0
FOREX
Dollar weakened yesterday pulling up Euro, Euro-Yen and Aussie. Yuan and Rupee could strengthen a bit today.
Dollar-Index (97.01) has fallen from resistance levels of 97.75 and could get some near term support near 97 or 96.75 levels. If 96.75 produces a bounce, we may see a rise back towards 97.75; else a fall towards 96.50 or lower cannot be rules out.
Euro (1.1264) has remained above 1.12 rising from 1.1225 to current levels of 1.1264. We had mentioned a sideways range of 1.1150-1.1250 yesterday with a gradual fall towards 1.11 in the longer run. While the Euro has moved up, we may negate the sideways range and instead look for a test of 1.13 on the upside before resumption of fall towards 1.11 in the longer run.
Euro-Yen (125.40) has risen from levels near 125 seen yesterday. Interim resistance could come in from 125.7-126.0 levels which if holds could push the pair back towards 124 in the medium term.
Dollar Yen (111.31) has scope to rise towards 112.50 but if it falls below 111, we could see it move down towards 110.50 in the near term. 111.50-110.50 could be the region for trade in the near term.
Aussie (0.7127) could probably test 0.7180 on the upside before falling from there back towards 0.7050. Note that 0.7050 is an immediate support and is likely to hold well for the near term.
Pound (1.3077) is likely to be volatile this week as the UK no-deal exit from EU on Friday comes closer. Immediate support is seen near 1.30 while the upside could see trade towards 1.3150.
USDCNY (6.7128) is trading below 6.7270 and has some scope of coming down towards 6.70 or lower. Line charts show immediate resistance at current levels that indicates an upcoming fall in USDCNY.
Dollar-Rupee (69.68) has scope of rising towards 70 but could possibly see a corrective fall towards 69.50/40 initially before it could resume the upward rally targeting 70.
INTEREST RATES
The German yields have risen slightly but could face resistance just above current levels. The German 10Yr (0.011%) has resistance near 0.1% while the 30Yr (0.64%) could face rejection from 0.7%. The yields could rise in the next 1-2 sessions before falling from there.
The corrective fall after the recent sharp rise in the US yields mentioned yesterday has not taken place, instead the 10Yr (2.52%) and the 30Yr (2.92%) have risen slightly from levels of 2.50% and 2.91% seen yesterday. The 2Yr (2.366%) is also bouncing from support levels and could head towards 2.40% in the near term. On the upside there is room for the 30Yr towards 3%, for the 10YR towards 2.55/58%. Immediate rise could be limited to the next few sessions while overall long term view is bearish for the US yields.
The 10Yr GOI (7.5632%) has risen well yesterday and could head towards 7.60% in the near term while interim dips could test 7.50% on the downside.
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