Market Morning Briefing

GOOD MORNING!

EQUITIES
Dow (16103.30, -0.19%) is consolidating between 16000-240. With the uptrend intact, it may rise to test 16400 if manages to break above 16240. Staying below 16240, it may return to 15950-800 before rallying again.

Nikkei (14874.36, +0.06%) continues the Triangular pattern mentioned with ever decreasing moves as evident from the lack of follow through buying or selling on any direction. It may remain inside the broader range of 14000-15200 for a few sessions before any firm trending move.

Shanghai (2065.82, -2.27%) has opened below our strong support zone of 2120-2095 today and crashed to test the support zone of 2060-50. A failure to take any pause here may extend the fall to 2020 initially and then 2000-1985. All rallies are expected to face selling pressure now.

Dax (9656.95, +0.40%) must break above 9700-800 to resume the short term uptrend and reach 10000. Otherwise the consolidation between 9800 and 9500 may continue for some more time.

Nifty (6155.45, +1.05%) did not confirm the downtrend we were expecting yet and rallied. Now it may rise to 6190-6200 and the price action there and the next correction down will reveal the true strength behind the current rally. As mentioned before, Nifty must close above 6200 or at least fill the gap at 6190-6265 for us to consider the bullish scenarios.

COMMODITIES
Gold (1320.693) is ranged and is testing resistance near 1325 levels. It is in a strong uptrend since Jan’14 (1182.35) and could see some profit taking in the near term. A break above 1325 would take it higher to 1340-50 and even 1400 in the longer run; else it could see some correction towards 1300.

Silver (21.605) remains ranged in the 21.98-21.3 region and is likely to continue so for some more time before rising towards 22.50-23 while support near 21.48 holds.
Gold/Silver Ratio (61.133) is consolidating sideways after the recent sharp drop. It may see some rise in the near term indicating strength in Silver.

Copper (3.2500) has dropped from resistance near 3.28-32. Movements may range within 3.20-3.32 for a few sessions while below 3.30, before it decides its further direction.

Brent (110.05) is trading a bit higher. While the crucial support zone of 108-109.8 holds, it could rise further towards 111.28-112 in the coming sessions.

Nymex WTI (102.46) is ranged for now. While resistance near 103.29 holds it could move sideways within 103.29-101.5 before rising further to 104.

CURRENCIES
Dollar Index (80.27) broke above 80.25 to reach our target of 80.40-45. To rally further towards 80.75-85, it must move and sustain above 80.45. Support comes at 80.25-20 now.

The Euro (1.3736) managed to break above the major resistance of 1.3750 but the expected bullish momentum is missing yet. Above 1.37, the possibility of a sharp rally to 1.3850 remains but a break below 1.3685-75 would bring the weakness back.

Dollar-Yen (102.39) is consolidating in the range of 101.75-102.75 with all rises showing weakness till now. With the medium term downtrend still in force, any rally may face supply pressure at the old resistance zone of 103-103.50. The bearish momentum will return on a break below 101.80-101.40.

The Euro-Yen Cross (140.60), like most other currencies, is rangebound between 140 and 141. It must break above 141-141.25 to reach our target of 142 and even142.70-143 is possible in that case. Weakness may return on a break below 139-138.80.

Pound (1.6635) has signaled the next phase of the major uptrend has resumed and now it is in a small correction now which may extend to 1.6540-1.65 only if breaks the support of 1.66. It may reach 1.69-1.7050 after the current correction finishes. All the dips till 1.6470-80 may be bought into.

Aussie (0.8955) is trading in a broad range of 0.89-0.91. Now only a breakout from this range may give a trending move with a clear direction. Holding 0.89 may produce a bounce to 0.91 again.

Dollar-Rupee (62.13) may open lower between 62.00-62.05 today. Contrary to our expectations, the correction has not ended at 62.15-10 and sustaining below 62.05, it may extend to 61.80-70 once again. Strength will be back only on a break above 62.20-25. Dollar Rupee may remain in a range of 61.40-62.70 for the next 2-3 weeks.

INTEREST RATES
The US 10Yr (2.73%) is struggling to break above the resistance at current levels. We may see it consolidating in a sideways range of 2.50%-3.00% for now.

The German 10Yr (1.66%) has seen a slight drop but is consolidating sideways in the range of 1.65%-1.70%. We may eventually see a bounce from the support near 1.62%-1.63%. The German-US 2Yr spread (-0.19%) has seen a bounce from the support near -0.28% (3-Feb-14) and can target -0.10%. The 10Yr spread (-1.06%) can target support near -1.12%.

The Japan 10Yr (0.59%) has remained unchanged. Moving sideways for now, it can target the support near 0.53%-0.55%. The US-Japan 10Yr spread (2.13%) is currently moving in line with the USD-JPY. It can target the support near 2.05% before rising to 2.20% from there.

The Indian 10Yr GOI yields (8.79%) is likely to maintain the range of 8.75%-8.85% for now.

DATA TODAY

9:00 GMT or 14:30 IST GER IFO Business Climate
...Previous - 110.60

9:00 GMT or 14:30 IST GER IFO Business Situations
...Previous - 112.40

9:00 GMT or 14:30 IST GER IFO Business Expectations
...Previous - 108.90

10:00 GMT or 15:30 IST EU CPI (YoY)
...Previous - 0.86 %

FRIDAY'S DATA

CA Inflation Y/Y
...Expected 1.30 % ...Previous 1.20 % ...Actual 1.50 %

US Existing Home Sales
...Actual 4620 K ...Previous 4870 K ...Expected 4660 K