STOCKS
Dow has breached the 29000-29050 resistance zone as against our view of seeing a corrective fall from there. A further rise is possible while the Dow sustains above 29100. DAX is trading mixed and is stuck in a narrow range. Nikkei has risen above 24000 and is bullish. Shanghai can continue to consolidate sideways. Sensex and Nifty have key resistances ahead which will need a close watch today to see if the indices can breach them.
Dow (29297.64, +267.42, +0.92%) has surged and closed decisively above 29100. This negates our bearish view of seeing a corrective fall to 28500 for now. We will have to wait and see if this rally sustains today. But while above 29100, a further rise to 29733 – the next important resistance is possible in the coming days.
DAX (13429.43, -2.87, -0.02%) is holding above 13400 but is note gaining strength to break above 13500. This leaves the near-term outlook mixed. While above 13400 we remain bullish for it to test 13600 on the upside. Only a strong break below 13400 will negate the bullishness.
As expected Nikkei (24065.43, +132.30, +0.55%) has risen back above 24000. This keeps our bullish view intact of of seeing 25000 on the upside.
Shanghai (3087.83, +13.75, +0.45%) dipped to 3070 and has bounced from there. Intermediate support is at 3065 while above which a bounce to 3100 is possible in the near-term. Broadly as we have been mentioning for some time, Shanghai can trade between 3035 and 3125 with a bullish bias to break above 3125 eventually and surge further.
Nifty (12355.50, +12.20, +0.10%) is stuck in between 12300 and 12400 now. A strong break above 12400 will negate our view of seeing a fall to 12200-12100 and will take the index higher to 12550. A strong break below 12300 is needed to bring pressure on the index. We will have to wait and watch.
Sensex (41932.56, +59.83, +0.14%) on the other hand can extend its upmove to 42400 if it manages to breach 42200. Such a break will then reduce the chances of seeing a corrective fall to 41800 that we had been expecting to happen from 42200.
COMMODITIES
Gold and Silver are stable while Copper could attempt to rise towards upper resistance. Crude prices trade higher after the US-China deal was signed on Wednesday with hopes of increase in demand growth for oil.
Brent (64.57) is holding above 64 and could rise towards 66 in the near term. Nymex WTI (58.51) also trades higher and could also move up towards 60 while 8 holds as near term support.
Gold (1553.7) and Silver (17.99) are stable near levels seen yesterday. For Gold, 1565 seems to be the upper cap just now while scope for a fall towards 1520 remains intact. Silver, on the other hand is likely to bounce back from 17.80/75 and attempt to rise towards 18.50 again.
Copper (2.8515) is stuck around the 2.85 level and trades almost stable. Upper resistance near 2.90 is intact and while that holds we may expect an eventual fall towards 2.82/80 in the medium term. But before that, we may expect an attempt to rise towards 2.90 in the near term.
FOREX
Dollar Index (97.29) is bearish while below 97.60 and has room to fall towards 97 or lower in the near term.
Euro (1.1139) has fallen slightly but a rise back towards 1.12 cannot be negated just now. 1.11 could be an immediate support and while that holds, Euro could rise higher in the near term.
Dollar-Yen (110.19) has risen back above 110 as 109.72 is holding well as an interim support. There is scope for a test of 110.50-111 before a sharper decline is seen.
EURJPY (122.74) has dipped slightly. Resistance near 123 remains intact for the near term. Although there is room for a further rise towards 124 on the longer term charts, we may expect 123 to holds just now and produce a rejection towards 122 or even lower.
Pound (1.3074) is trying to slowly inch higher. A rise towards 1.32 is on the cards for the near term.
Aussie (0.6895) is stuck in a sideways range within 0.6925- 0.6875. There is scope for a test of 0.6925 on the upside, a break above which would turn bullish for Aussie. Watch price action near current levels.
USDCNY (6.8674) is likely to trade sideways in the 6.85-6.92 region for the near term. Thereafter, we may expect an eventual rise above 6.92 in the longer run.
Dollar-Rupee (70.9250) has to break above 71 in order to turn bullish towards 71.25/30 else we may expect trade below 71 for some more time.
INTEREST RATES
The supports on the US Treasury yields are holding well in line with our expectation. The yields can move up in the coming days if they manage to sustain above these supports. The German yields can dip in the near-tern and then can resume their overall uptrend. The 10Yr GoI is moving down as expected and can dip further to test its key support and then can reverse higher again.
The US 2Yr (1.56%), 5Yr (1.62%), 10Yr (1.82%) and 30Yr (2.28%) Treasury yields have bounced across tenors. The support at 2.25% on the 30Yr has held well. While above this support, a bounce to 2.35%-2.40% is possible in the coming days which in turn will negate the danger of seeing a fall to 2.15% that we had mentioned yesterday. Similarly, the 10Yr has to sustain above 1.79% to avoid a fall to 1.70% and move up to 1.90%-1.95% again. We will have to wait and watch closely today.
The German 2Yr (-0.60%), 5Yr (-0.52%), 10Yr (-0.22%) and 30Yr (0.29%) have dipped further across tenors. . There is room on the downside to test -0.25% (10Yr) and 0.25 (30Yr) which are their key near-term support. We expect these supports to hold and the yields to bounce towards 0.40%-0.45% (30Yr) and -0.10% (10Yr) in the coming weeks.
As expected the 10Yr GoI (6.6026%) has dipped to test 6.60% yesterday. A further dip to 6.5750% is likely now from where a bounce-back move to 6.65% is possible again.
