STOCKS
Strong surge in the global equities on hopes for some positive development on the US-China trade talk and from the tentative deal to avoid another shutdown in the US. The Indian equities which is underperfroming its peers may get some breather today on the back of the rally in the global market
Dow Jones (25,425.76, +372.65, +1.49%) has held well above 25,000 and can extend the rally towards 25,700 and 25,800 on a strong break above 25,450.
DAX (11,126.08, +111.49, +1.01%) can test 11,300 while it remains above 11,100.
Nikkei (21,185.59, +321.38, +1.54%) risen sharply recovering all the loss made over the last few days.While a strong close above 21,000 is seen, it opens a test of 21,500 and 21,750 in the coming days.
Shanghai (2,686.16, +14.27, +0.53%) keeps the bullish view intact for a test of 2,700. While a corrective fall to 2,650 cannot be ruled out from 2,700, a rise past 2,700 will pave way for the next target of 2,750.
Sensex (36,153.62, -241.41, -0.66%) and the Nifty 50 (10,831.40, -57.40, -0.53%) has failed to take the bullish cues from the Asian markets yesterday and continued to fall. The broader view remains negative for the Sensex to fall to 36,000-35,985 or even 35,800 and the Nifty 50 to test 10,700 on a break below 10,800. However, given the positive sentiment in the global equities, an intermediate bounce to 10,900-10,950 on the Nifty and 36,500 on the Sensex cannot be ruled out before this fall.
COMMODITIES
Gold and Silver remains stable and can be range bound for some time with the broader bias continuing to remain bullish. Copper, though holding above its support, may see further dip before bouncing back. Oil is getting support from Saudi Arabia’s production cut and can see some uptick in the near term.
Gold (1,310) and Silver (15.71) remains stable above their respective supports at 1300 and 15.60. As mentioned yesterday, gold can remains range bound between 1300 and 1325 before we see a fresh rally to 1350-1360. Silver on the other hand can see a bounce to 16.2 in the near-term while it remains above the support level of 16.6.
Copper (2.78) sustains above 2.78 but is still vulnerable to test 2.76 and 2.75 while it trades below 2.82.
Brent (63) has resistances at 63.5 and 64. A strong break above 64 will trigger a fresh rally towards 66. While 64 holds, a pull-back move to 62 and 61 can be seen again.
WTI (53.60) can test its immediate resistance at 54.5, a break above which can take the prices further higher to 55.4 nad 55.7.
FOREX
Dollar-Index could not sustain a rise above 97, bringing back hope of some positive movements in the major currencies. Pound, Aussie, Euro and Rupee saw strength against the US Dollar over yesterday and today. While the US Dollar could see some more weakness in the near term, currencies could continue to see a short rise.
Dollar Index (96.67) is trading lower after coming off from 97.20. While the fall sustains, the index could come off towards 96.30/25 in the near term which is also the 21-day MA on the daily charts. Near term looks bearish while below resistance near 97.20-97.00.
Euro (1.1335) bounced back from 1.1257 and has turned out to be a temporary break below 1.13 as suspected. This negates an immediate fall to 1.11 re-affirming the upside chances of moving back towards 1.14.
Euro-Yen (125.38) has risen as expected but could face rejection from resistance near 126. Only on a break above 126, we may expect further upmove towards 127. While 126 holds, another dip to 124 could be a possibility. Watch price action near 126.
Dollar Yen (110.61) is trading above our expected resistance near 110.50. Unless it comes down immediately, we could see a rise towards 111.50 in the near term. On the longer term charts (see weekly candles), there is room for a rise towards 113.
Pound (1.2896) bounced from 1.2832, a little lower than our expected 1.2850. A rise to 1.30 is possible in the next few sessions.
Aussie (0.7121) is also trading higher today. A rise towards 0.72 is on the cards in the next few sessions. Near term view is bullish.
USDCNY (6.7606) came off from 6.7941 instead of testing the 21-day MA near 6.8040 mentioned yesterday. However, the current fall could extend to 6.7350 in the near term.
Dollar Rupee (70.71) came off sharply breaching 71 on the downside. While the falling momentum remains strong there is room for a fall towards 70. An interim bounce from 70.60/40 is possible before Dollar-Rupee heads lower.
INTEREST RATES
The US yields are trading higher. The 2Yr (2.52%), 5Yr (2.51%), 10Yr (2.70%) and 30Yr (3.03%) have risen from 2.51%, 2.50%, 2.68% and 3.02% respectively. The 5Yr has bounced from 2.46% and could rise towards 2.54% while the 10Yr and 30Yr could also move up to 2.73% and 3.06% respectively.
The German-US 2Yr differential (-3.08%) is stable just now. While it holds below -3.05%, chances of a fall towards -3.10% remains on the cards for the near term. This could indicate that the Euro could possibly see a limited rise in the near term. The German-US 10Yr (-2.57%) is also trading lower and could fall towards -2.625 before pausing.
The 10Yr GOI (7.5339%) is trading lower and has scope of falling towards 7.50/45% in the near term. While below 7.60%, bias is tilted to the downside for the next couple of weeks.
