Equities remain bullish overall, but could be vulnerable to profit-taking unless fresh strong rise is seen soon.
The Dow (19885.73) has been trading horizontally between 19800-20000 since Christmas. Even the better than expected US Retail Sales on Friday did not move it much. The market still seems to be on a holiday. Medium term Resistance at 20200-250 should be kept in mind.
Since the Shanghai (3075) is trading well below 3100 now, it might be vulnerable to a fall towards 3000 over the next couple of weeks.
The Nikkei (19112) continues to remain above the major Support at 19000 mentioned on Friday and has a bullish bias while the Support holds. But, strength in the Yen (114.08) is preventing it from rising. Need to watch how the Support at 19000 performs this week.
Sentiment on the Nifty (8400.35) is bullish but it could be vulnerable to profit-taking ahead of the Budget if the 21-week Moving Average Resistance at 8443 is not broken.
Gold (1203.50) remains strong at the week-opening, but faces a crucial Resistance near current levels. It needs to power up to 1207-1210 in order to avoid a profit-taking dip towards 1190 and lower. The Gold-Euro rate (1133.53) also faces an important Resistance near current level and then a stronger one near 1152. So, the market might like to avoid adding fresh Longs to Gold. Correction in Gold (if seen) could see the Aussie (0.7480) come down as well.
Silver (16.8750) faces an important Resistance near current levels and may start coming down towards 16 and lower if and while this holds.
As mentioned on Friday, Brent (55.67) and WTI (52.57) are in sideways consolidation in the shadow of Resistance at 58-59 on Brent and 55 on WTI. They also have Supports near 54 and 50 respectively and may remain ranged during the week.
Copper (2.6850) rose above 2.70 for a brief while on Friday, in line with our call for a test of 2.70. It faces Resistance on the Weekly Candles near current levels now and needs to power past 2.70 in order to test 2.75. Failure to do that could lead to a profit-taking dip towards 2.65.
Unusual gap-down opening for the Pound (1.2017) in Asia today. The currency does not seem to have strength and could be vulnerable to a test of 1.1943, low seen in October. The fall is being attributed to an upcoming speech by Teresa May.
Resistance at 115.30 held well enough on Dollar-Yen (114.08) on Friday although there was a false spike to 115.44. As warned, the Yen has strengthened again from there and may try and test 113.50-20 while below 115.00.
The Euro (1.0622) maintains its recent strength. Intra-week Support is seen at 1.0550-40. A test of 1.07 on the upside is possible while that Support holds. The Dollar Index (101.42) seems to be on the defensive and needs to remain above Supports at 101.10-100.70 in order to avoid a deeper decline towards 100.20-15.
Like the Euro, the Aussie (0.7485) remains near Friday's levels, maintaining its recent strength. It may try and test 0.7550 if and while near term Support at 0.7450 holds.
The Chinese Yuan (USDCNY 6.8929) may be ranged between 6.9250 and 6.8750 with a bit a bearish bias.
Overall Dollar weakness cited above may help Dollar-Rupee (68.15) remain ranged between 68.00-68.40, with a mild upward bias.
Unable to cover interest rates today. Sincere apologies for the inconvenience.
6:30 12:00 IN WPI
...Previous 3.15 %
10:00 15:30 EU Trade Bal
...Expected 23.20 EUR Bln ...Previous 19.70 EUR Bln
IN Trade bal
...Kshitij Expn -8.96 $ Bln ...Previous -13.01 $ Bln ...Actual -10.37 $ Bln
US Retail Sales (MoM)
...Kshitij Expn -0.27 % ...Expected 0.5 % ...Previous 0.04 % ...Actual 0.82 %
US PPI ex Food & Energy (MoM)
...Expected 0.30 % ...Previous 0.36 % ...Actual 0.18 %
...Expected 0.10 % ...Previous 0.36 % ...Actual 0.27 %