STOCKS
Asians are trading in red indicating the cautiousness ahead of the US-China meeting tomorrow. A positive outcome of this meet over the weekend could trigger a fresh leg of rally in equities next week. Dow is poised near a key support and could see a fresh rise while it holds. DAX has bounced from a key support and is showing sign of strength for further rise. Nikkei and Shanghai can consolidate sideways before moving higher. Sensex and Nifty has key immediate resistances which if broken can trigger a fresh rise.
The support at 26450 on the Dow (26526.58, -10.24, -0.04%) is holding well. The Dow has bounced from a low of 26465.32 yesterday. A strong rise past 26635 will bring back the momentum and will pave way for our preferred target levels of 27200 and 27500. However, as we have been cautioning, a break below 26450 (less preferred) can take the Dow to 26250 before the expected rise.
DAX (12271.03, +25.71, +0.21%) is regaining strength slowly. The support in the 12200-12170 region is holding very well as expected. DAX could be gearing up for a fresh rally to 12500-12600 in line with our expectation.
Nikkei (21246.63, -91.54, -0.43%) has come-off after a strong bounce yesterday. The near-term outlook is mixed. A range-bound move between 21000 and 21500 is possible for some time. Within this range, the bias is bullish to break 21500 and test 21750 on the upside after which a sharp fall is possible.
The resistance in the 3010-3020 is holding well on Shanghai (2986.73, -10.07, -0.34%). The index can consolidate between 2950 and 3020. The broader bias is bullish to see breakout of this range above 3020 and a rise to 3050-3100 in the coming weeks.
Nifty (11841.55, -6.00, -0.05%) broke above 11900 yesterday as expected but failed to sustain higher. Immediate support is at 11800. While above this support, the view remains bullish to test 12000-12100 in the coming days. A break below 11800 (less preferred) can take it to 11700 again.
Similarly, Sensex (39586.41, -5.67, -0.01%) failed to breach 39750 decisively yesterday. However, it is holding above the immediate support level of 39500. While above this support, the possibility is high of the index breaking above 39750 and test 40000 and 40250 on the upside.
COMMODITIES
Overall Crude prices are likely to face rejection from respective resistances above current levels unless a rise is triggered by any unexpected news coming from the US-China talks due tomorrow.Gold looks bullish while Silver and Copper could trade sideways for some sessions.
Brent (65.58) is trading lower ahead of the OPEC+ meet and the US-China meet in the G20 summit. Oil prices May remain stable untill mid-next week before deciding on further movement. 67-69 continues to be important near term resistance zone to keep a watch on.
Nymex WTI (59.28) is stable near yesterday’s levels and could face rejection from 60 in the near term.
Gold (1424.90) has risen as immediate support near 1400 is holding well. While above 1400, there is scope for rising back towards 1450 or higher in the near term. Medium term target of testing 1500 remains intact.
Silver (15.34) could trade between 15.20 and 15.65 in the near term, both being immediate support and resistance levels.
Copper (2.7170) has dipped slightly. 2.76 is an interim resistance which is likely to hold in the near term. While below 2.76, Copper could trade in the 2.68-2.76 region.
FOREX
Currencies are almost stable. Euro looks bullish in the near term while Dollar Yen, Euro-Yen, Pound and Aussie could see some dips in the next few sessions. Rupee is likely to strengthen too but has important support just below current levels. Markets await outcome from the US-China meet due tomorrow.
Dollar Index (96.18) is stable and while below 96.50, sentiment for the index remains bearish.
Euro (1.1370) has moved up again and could rise towards 1.1380-1.1400 in the near term.
Dollar-Yen (107.60) has come off while resistance near 108 seems to be holding just now. A sharp fall from here, if seen could bring in 107.0-106.50 again into the picture.
Euro-Yen (122.34) has also fallen after rising above 122.50. Although there is room on the upside towards 123-124, any near term dip could be limited to 121.
Aussie (0.7006) is likely to test 0.7050 on the upside before coming off from there in the near term.
Pound (1.2670) could test immediate support near 1.26 from where a bounce to 1.28 looks likely in the near term.
USDCNY (6.8726) is likely to test support near 6.85/82 while upside could be capped at 6.90.
USDINR (69.07) dropped sharply yesterday. It could test 69.0-68.90 today from where a bounce back towards 69.20/30 is possible. A break below 68.90, if seen would turn bearish for the currency pair indicating a fall in the medium term bringing in 68.50 into the picture. For now, we may look for a bounce from 68.90-69.00 region.
INTEREST RATES
Bond market seems to remain cautious ahead of the G-20 meeting and the much awaited talk between the US and Chinese Presidents tomorrow. The outcome of this meeting over the weekend would set the trend going forward.
The US Treasury Yields were mixed yesterday. The yields on the near-end, 2Yr (1.74%) and 5Yr (1.77%) dipped slightly while those at the far end, 20Yr (2.02%) and 30Yr (2.54%) remained stable. The view remains the same. The 30Yr yield can remain range bound between 2.53% and 2.60% with the broader bias being bearish to break 2.53% and test 2.50% and 2.48% on the downside. The 10Yr can oscillate between 2% and 2.10% for some time.
The German Yields have dipped across tenors. The 5Yr (-0.65%), 10Yr (-0.32%) and 30Yr (0.25%) were down 1 bps each while the 2Yr (-0.75%) was down 2 bps. The trend is down. The 30Yr can test 0.2% and the 10Yr can inch down to -0.40% in the coming days.
The 10Yr GOI (7.0290%) has come-off from near the resistance at 7.10%. It can fall to test 6.90% – the lower 6.90%-7.10% sideways consolidation. The broader bearish view remains intact. The 10Yr GOI is likely to break below 6.90% and fall to 6.80%-6.75% in the coming days.
