STOCKS
Dow (20858.19, +0.01%) made an intra-day low of 20777, just levels above our expected 20750 and closed the session at higher levels. Sideways consolidation is possible in the next few sessions with a possibility of seeing some more fall in the near term.
Dax (11978.39, +0.09%) is holding above the daily trend support and while that holds, we could see a rise towards resistance near 12100-12200 levels.
Nikkei (19578.92, +1.35%) could come off in the near term from 19620 to re-test levels near 19400 or lower. While the US-Japan yield spread gives indication of a sharp fall from crucial resistance levels, the immediate upside for Nikkei could be limited. (Refer to Forex and Interest Rates section below)
Shanghai (3217.12, +0.01%) traded lower as expected and could either move down towards 3175 or consolidate within the 3250-3200 region for some more time.
Nifty (8927.00, +0.03%) is stuck within the 8970-8880 region (broader range of 8800-9000) and may remain sideways today also. The election results due tomorrow could trigger some movement on Tuesday as Indian markets would be closed on Monday for HOLI.
COMMODITIES
Gold (1199) has shifted into a new bearish trading zone of 1128-1226. Weekly profit taking my pull gold towards 1200-20 but We will remain bearish until it will close above1230-35. Crucial supports are poised at 1183 and 1169. A close below 1169 could open up 1128 and 1054 levels respectively.
Silver (16.94) also moved lower in line with our expectation and closed below 17. Crucial support is at 16.70. A close bellow that could open up 15.78. Bias will remain bearish while it is trading below 17.75.
Copper (2.60) is hovering around its crucial support of 2.55-60. We might see short term pull back towards 2.70. We have few important US data (Average hourly earnings, Non Firm employment change and unemployment rate) today at 7:00 pm IST, which may influence the price of copper and silver respectively.
Major weekly trend line support has been broken form both Breant (52.54) and WTI (49.61). We may see short term pull back rally toward 54 in brent and 51 in wti due to weekly profit taking, though the bias is still bearish. Immediate support for Brent is at 45.42 and WTI at 44. We would not be surprised if we will see these lavels within few weeks of time.
FOREX
No change in stance was announced in the ECB meet, as expected but a surge in the German yields (Check Interest rates section) pushed Euro (1.0595) higher but it still may remain stuck in the range of 1.0500-1.0650 till the FOMC meet next week.
Failure to rise above 102.30 has kept the Dollar Index (101.91) stable and it may possibly spend the next couple of sessions in the range of 101.20-102.30. New range could be established after the FOMC meet.
Dollar-Yen (115.20) has rallied sooner than expected as it trades above the previous month high of 114.98 now. While the chances of further rise to 117.50 or even 118.60 can’t be ignored now, the danger comes from the US-Japan10Yr facing crucial resistance near the current levels, which if holds, can push the Dollar Yen down.
Pound (1.2161) is in a pause mode in the narrow band of 1.2100-1.2200 for the last 2-3 sessions after the 6-week long downtrend but it remains to be seen if any bottoming price action may take place around the current levels or a another decline towards 1.20 levels will take place.
Aussie (0.7519) is hanging on to the 0.75 levels by the skin of its teeth with bidirectional possibilities open in the near term. If 0.75 holds, then another bounce to 0.7600-30 levels can be seen but a break below 0.75 may drag it down to 0.7350-00 levels. Wait and watch.
Dollar-Rupee (66.72) is trading at 66.73 in the NDF market today, apparently indifferent to the just released exit polls. Possibly the probability of no majority for any single party in the all important state of UP keeps the currency stable for now and the actual movement may come next week, after the actual result. Technically, no bias in the range of 66.50-66.95.
INTEREST RATES
The German yields are trading higher, not impacted much by the ECB meeting yesterday. The 5Yr (-0.39%), 10YR (0.423%) nd 30YR (1.24%) are up from previous levels of -0.41%, 0.39% and 1.21% respectively and could move higher in the near term.
The German 10-2YR (1.2730%) has risen sharply breaking above the immediate resistance near 1.16%. Another resistance is visible near 1.30% which if holds could produce some rejection towards 1.20%.
The US-Japan 10YR (2.53%) has indeed risen from levels near 2.484% yesterday and has come up to test medium term resistance near current levels. While that holds, a corrective dip is expected in the coming sessions. Else a break above the crucial resistance could indicate further upside for both Nikkei and Dollar-Yen.
