STOCKS
Asians are trading in the red. Nikkei and Shanghai looks vulnerable for further fall from current levels. Dow and DAX looks mixed and could consolidate in the near term. The Indian equities are standing out by shrugging-off the weakness in the global indices. Sensex and Nifty seems to have begun its pre-election rally and looks strong to revisit their previous highs.
Dow Jones (25,554.66, -96.22, -0.38%) seems to be pausing below the key 21-day moving average resistance level of 25,741. Inability to break this resistance can pull the index lower to 25,100 levels again.
DAX (11,524.17, -19.31, -0.17%) has come-off from the day’s high yesterday. It can oscillate between its support at 11,430 (21-day moving average) and resistance at 11,670 for some time.
Nikkei (21,199.78, -303.91, -1.41%) given back all the gains made yesterday and is likely to retest the psychological 21,000 level.
Shanghai (3,045.29, -15.02, -0.49%) has come-off from near 3,100. It looks vulnerable to break below 3,000 and fall to 2,970-2,950 in the coming sessions.
Sensex (37,535.66, +481.56, +1.30%) and Nifty 50 (11,301.20, 133.15, +1.19%) are retaining their momentum. Both the indices looks strong enough to revisit their previous highs of 11,760 (Nifty) and 38,989 (Sensex) as the markets move closer to the general elections next month. Support for Sensex is around 37,000 and for the Nifty at 11,200. A dip to test these supports cannot be ruled out in the near term though.
COMMODITIES
Gold and Silver have gained strength on the back of a weak dollar. They can inch further higher in the coming days. Copper may remain range bound with a bullish bias. Oil continues to trade mixed within its broad sideways range.
The support at 1290 has held very well as expected and Gold (1304) has risen above 1300. As long as it sustains above 1300, a rise to 1310 and 1315 can be seen in the near term.
Silver (15.44) has also risen and is heading to test 15.50-15.60 as expected.
Copper (2.92) rose to test 2.95 yesterday as expected and has come-off slightly from there. While below 2.95, a dip to 2.89 cannot be ruled out in the coming sessions and a range bound move between 2.89 and 2.95 is possible for some time. A decisive close above 2.95 will bring back the bullish sentiment and will open doors for a test of 3.0 and even higher levels.
Brent (66.75) seems to be not getting strong follow through buyers above 67. The broader 64-68 sideways range remains intact. Within this range, a dip to 66 and 65.7 looks possible in the coming sessions while it remains below 67.
WTI (57) is oscillating around 57. The chart looks mixed leaving equal chances for a rise to 57.80 or a fall to 56 from current levels.
FOREX
Theresa May’s EU withdrawal deal has been rejected by MPs by an overwhelming majority for a second time, with just 17 days to go to Brexit. MPs voted down the prime minister’s deal by 149 – a smaller margin than when they rejected it in January. The weakness in pound is keeping the Dollar Index low, favoring a short period of strength in other currencies.
Pound (1.3088) has bounced to trade near current levels after seeing a volatile trade between 1.300-1.3288 yesterday. While Pound trades above support at 1.30, it may continue to rise towards 1.32-1.33 again in the near term. Immediate view is bullish.
Dollar-Index (96.97) is trading in the red below 97. Unless a bounce back above 97 is seen, Dollar Index could be bearish for the near term targeting 96.50 or lower.
Euro (1.1288) has moved up on Dollar weakness and while the upside momentum remains intact, we could see a rise towards 1.1340 in the near term before a corrective dip is seen.
Euro-Yen (125.49) is almost stable. We stick to our view of a rise to 126.00/80 in the near term. View is bullish for the coming sessions.
Dollar Yen (111.19) is also almost stable, trying to move up a bit. While above 111, the pair has scope to rise towards 112.0-112.5 levels in the near to medium term.
Aussie (0.7055) has fallen sharply. But note support at 0.70 which is likely to hold and gradually push Aussie back to higher levels near 0.7150.
USDCNY (6.7073) has fallen from resistance near 6.72/73 levels and while that holds, Yuan could strengthen towards 6.68. At the same time watch interim support at 6.70.
Dollar Rupee (69.7125) managed to bounce back from 69.50 yesterday but while the Dollar trades weak; Rupee could possibly attempt another fall towards 69.50 today. Upside is likely to be limited to 69.80/90. A break below 69.50 would open up chances of testing 69.25/00. We would watch if Dollar-Rupee re-tests 69.50 today.
INTEREST RATES
The UK yields are trading low. The 5YR (0.837%), 10YR (1.1650%) and the 20YR (1.62%) are trading lower than yesterday’s levels of 0.90%, 1.2270% and 1.6610% respectively. The yields look bearish for the near term and could take a few sessions to test support levels from where a bounce could be expected. The 20YR could test 1.60/59% while the 10Yr may target 1.10%.
The US yields have fallen as well. The 2Yr (2.46%), 5Yr (2.42%), 10Yr (2.61%) and 30Yr (3.00%) have fallen back from levels near 2.50%, 2.46%, 2.66% and 3.05% respectively. 30YR could test 2.95%, while the 10Yr and 5YR could test 2.6% and 2.4% respectively before rising from there. While the overall long term trend is down for the US yields, we could see the current fall to continue for a few more sessions followed by a short corrective upmove.
