STOCKS
Global equities have bounce yesterday thereby keeping our positive view intact. Dow and DAX can rise further and remains bullish in the near term. Nikkei has a key resistance ahead which has to be broken to extend the upmove. Shanghai remains mixed within its sideways range. Sensex and Nifty is also expected to remain sideways for some time.
As expected, the support at 26000 has held well and the Dow (26106.77, +101.94, +0.39%) has bounced. The bullish outlook is intact. Resistance at 26250 can be tested now, a break above which will pave way for 26500-26600
DAX (12115.68, -40.13, -0.33%) keeps our bullish view intact for a rise to 12300. Key supports are at 12070, 12035 and 12000.
Nikkei (21073.05 +41.05 +0.20%) has bounced above 21000 again. But it has to breach 21250 decisively to gain bullish momentum and target 21500 and 21750 While below 21250, the possibility of a fall to 20750 and 20700 cannot be ruled out.
Shanghai (2912.41 +1.67 +0.06%) oscillates around 2900 and remains mixed in the near term. The 2835-2950 sideways range remains intact and a breakout on either side of this range will give a clear view on the next direction of move.
Sensex (39741.36, -15.45, -0.04%) and Nifty (11914.05, +7.85, +0.07%) fell as expected yesterday to test the lower end of their respective range and has bounced sharply. The indices are likely to remain in the sideways range of 39300-40300 (Sensex) and 11800-12200 (Nifty).
COMMODITIES
Gold and Silver has risen sharply and has room for further rise. However, key resistances are coming up for them which will decide whether the current upmove will sustain or not. Copper continues to consolidate. Oil has spiked on reports of tanker attacks in Gulf of Oman. Brent and WTI can consolidate sideways for sometime before resuming their overall downtrend.
Gold (1343) has risen as expected and is heading towards 1350. Whether gold breaks above 1350 or not will be crucial. A break above 1350 can take it further higher to 1360 and will avoid a fall-back to 1320 levels.
Though Silver (14.94) has risen sharply. The key resistance at 15 is likely to be broken if the current momentum continues and the upmove can extend to 15.15.
Copper (2.65) can continue to consolidate between 2.60 and 2.68. Within this range, a dip to 2.62-2.60 is likely in the near term.
Brent (61.52) spiked above 62 contrary to our expectation for a fall and has come-off slightly. While above 61, there is room for a rise to 63 and 64 in the coming days. Broadly, a sideways consolidation between 59.5 and 64 looks possible before a fresh leg of downmove begins.
Similarly, WTI (52.22) can consolidate between 50.5 and 55 for some time before the overall downtrend resumes targeting 47 and 45.
FOREX
Dollar sustains higher and has room for further upmove. The Euro is coming closer to a key support which is likely to hold and trigger a bounce. Dollar-Yen remains bearish while the Pound retains its sideways range. Dollar-Rupee has room for a rise to 69.70-69.75 on a break above 69.55.
Dollar Index (97.03) sustains higher and remains bullish for a rise to 97.5 and 98. A break above 97.10 can accelerate the upmove. Support is in the 96.85-96.80 region.
Euro (1.1277) has dipped to test the 1.1270-1.1260 support region as expected. We expect a bounce to 1.1310-1.1340 from this support zone. But a break below 1.1260 will negate the bounce to 1.1310-1.1340 and take the Euro lower to 1.1225.
Dollar-Yen (108.26) is stuck in a narrow range. Our view remains the same. The outlook is bearish to test 107. A break below 108 can intensify the pace of fall. Key resistances are at 108.5 and 109.
Euro-Yen (122.17) is hovering above its key support level of 122 which we expect to hold and trigger a bounce to 124. But, break below 122 will prove our bullish view wrong and drag it to 121. So Dollar-Yen needs a watch as a sharp fall below 108 in it could drag the Euro-Yen also lower.
As expected, Aussie (0.6907) tested 0.6900 yesterday. An intermediate bounce to 0.6930-0.6940 is possible from the immediate support level of 0.6890. But the downtrend is likely to remain intact and Aussie can break below 0.6890 and target 0.6850 and 0.6800 in the coming weeks.
Pound (1.2675) retains its 1.2650-1.2750 sideways range continues to hover around the lower end of this range. We expect this sideways range to remain intact for some more time.
USDCNY (6.9221) has been inching higher and can move up to 6.93-6.94 in the near term. As mentioned yesterday the pair can consolidate 6.90 and 6.94 in the near-term. The bias is bullish to see a break above 6.94 and rally to 6.98 and 7.0 over the medium term .
USDINR (69.5150) can rise to 69.70-69.75 on a break above the immediate resistance at 69.55. Also since the pair has been holding well above 69.25 we may have to allow for a test of even 70 on the upside going forward.
INTEREST RATES
The US yields have dipped further. As mentioned yesterday, the corrective bounce in the yields seems to have come to an end. The 30Yr (2.59%) can fall to 2.50% while it remains below 2.60%. The 10Yr (2.09%) and 5Yr (1.83%) can test 2.0% and 1.75% respectively while they remain below 2.10% and 1.90% respectively.
The 30Yr (0.35%) German yield has dipped slightly while the 10Yr (-0.24%) 5Yr (-0.60%) remains stable. The near-term view is positive. As mentioned yesterday, the 30Yr can rise to 0.50% on a break above 0.40%. The 10Yr can test -0.10% on a break above -0.20% while the 5Yr can rise to -0.50%.
The 10YR GOI (7.1688%) has immediate resistance at 7.20%. While below this resistance a dip to 7.10% is possible in the near term.
