Dow (18392.46, +0.54%) opened gap up and made an intra-day high at the channel resistance on the daily charts. If the resistance holds, we could see a dip back to levels near 18300 or lower. A break above 18500, if seen, could take it higher to 18600-18750 on a medium term.
Dax (10674.18, +2.28%) saw a sharp rise after spending some time in the 10250-10500 region. The current rise could extend towards 10800 followed by a short dip before it resumes its rise further.
Interim resistance near 16810 on Nikkei (16786.89, -0.12%) seems to be holding for now but there is an upside potential towards 17000 in the medium term. A dip to 16500-16400 is possible before it moves higher from current levels.
Shanghai (3035.41, -0.23%) also has an interim resistance near 30765-3075 region and while that holds it could move down a bit towards 3025-3010 in the near term. Yesterday’s mentioned target of 3100-3200 could take much longer time than expected.
Nifty (8867.45, +1.03%) has bounced from support but is yet to see a sharp move on the upside. There is enough room towards 9000-9100 on the upside, but current momentum is slow and could take it higher gradually taking more time.
A stronger Dollar (95.48) has curtailed the advance of all the commodities and the consolidation phase may continue for another day or two.
Gold (1334.61) is digesting its recent gains at the higher levels before extending the rise to the target/resistance of 1350-60, which can be seen in the next 1-3 sessions.
Silver (19.76) is consolidating at the higher levels in line with our expectation and the upside may be limited to 20.30-50 in the near term. Immediate support at 19.50.
If Brent (47.25) fails to rise above 48.00 and WTI (45.82) above 46.50 in the next couple of sessions, then another pullback towards 45.00 and 44.00 respectively can be seen. Repeat – Brent and WTI are effectively trading sideways in the broader range of 45.00-50.00 and 42.50-48.00 respectively. This sideways consolidation may continue for a few days more with no particular directional bias.
Copper (2.187) has met our target/resistance of 2.20 and now facing some selling pressure from that area as expected. A correction towards 2.15-14 in the near term can’t be ruled out before any further rise is attempted.
After the euphoria, the normal corrections are visible everywhere as Dollar has recouped some of its losses.
Dollar Index (95.50) tested our support of 95.10 as expected which was followed by a sharp bounce recovering most of the earlier loss. Still, the near term upside may be limited to 95.80 with downside open to 95.00-94.75.
Euro (1.1196) has tested the upper end of our range 1.1120-1.1250 and reverted back to 1.12 levels. If the current correction is contained within 1.1170, then another bounce towards 1.1250-1.1300 can be seen.
Dollar-Yen (101.11) is seeing a normal corrective bounce after the sharp decline from 102.79. The current bounce may not extend over 101.55-75 and the next few sessions may see a consolidation in the narrow range of 100-102.
Pound (1.3047) is creating a range in 1.29-1.31 in which it may spend a few sessions before the next directional move.
Aussie (0.7634) is consolidating at the higher levels after the sharp gains made this week but another attempt for the target/resistance 0.7710-45 may be seen in the next couple of sessions.
Dollar-Rupee (66.66) may recover some of its losses following the stronger Dollar cue and may end the week staying above 66.55-50.
Overall global yields are all trading lower and look bearish in the near term.
The US yields are trading lower. Very sharp rejection from channel resistances seen in the US yield differentials. The 10-5YR (0.45%) , the 30-10YR (0.72%) and the 30-5Yr (1.17%) are all declining fast and could continue to move down in the near term.
The UK Gilts are falling sharply and may end the week on a lower note. The fall could extend some more on the downside in the medium term. The yield differentials are also headed down but have some immediate support near current levels. The 10-5Yr (0.41%) is trading at support levels and if that holds, it could bounce back to 0.45% else a fall could take it lower towards 0.35%.
The 30Yr JGB yield (0.48%) has fallen sharply to test support at current levels. In case this holds, there could be a movement in the 0.60-0.50% region for sometime; else a fall towards 0.30% is possible in the medium term.
The German yields are also headed downwards and could continue to fall in the near term. The 5Yr, 10YR and the 30Yr yields are trading at -0.55%, -0.09% and 0.48% respectively.
The 10YR Indian GOI (6.9763%) came down sharply on rupee strength and could come down further probably to close today at levels near 6.90%.
12:30 18:00 CA Inflation Y/Y
...Expected 2.0 % ...Previous 2.1 %
US Existing Home Sales
...Expected 5450 K ...Previous 5380 K ...Actual 5330 K