STOCKS
As mentioned yesterday, all the Equity Indices have seen a huge upmove over the last few months. There are chances they could all pause and take some rest soon.
Although yesterday we said we were strongly bullish on the Dow (25890.18, -396.85, -1.51%) for 27000-28000, perhaps we also have to show respect to trendline Resistance at 27000, coming down from the Feb high of 29568. This will have to be broken to bring up 28000+. While below 27000, we may expect some corrective dips in Dow.
Bit of profit-taking in the DAX (12616.80, -116.65, -0.92%) yesterday, contrary to our expectation of a test of 13200 in the near term. Still the overall uptrend remains in place while above 12380. The DAX looks more bullish than the Dow.
It could be that the Nikkei (22,545.36 −69.33 (0.31%) is hesitating to break above 23000 and rally further to 24000. Expect good profit-taking if the Nikkei reaches there.
The Shanghai (3,345.34 +12.46, 0.37%) has strong Resistance at 3400-3450 that could stop its recent rally and produce a dip towards 3200. However, in case of a break past 3500, the Shanghai could target 4400 in the medium term. Careful here.
Compared to the rest of the world, Indian equities have a lot of room on the upside. The Nifty (10799.65, +36.00, +0.33%) has come up to 10800. We will watch today to see if it dips a bit from here or moves straight up to 11000. Looking at the Sensex (36674.52, +0.51%), there seems to be room up to 38000. Therefore, the Nifty too could move higher.
COMMODITIES
Overall all commodities have risen and are trading higher today. Significant move seen in Gold above 1800 while Silver could head towards immediate resistance. Copper and Crude too is likely to move up but could face resistances in the near term above current levels. Very near term is bullish with a possible corrective dip coming up soon.
Brent (43.06) and WTI (40.63) dipped a wee bit yesterday. Watch Supports near 42 and 39 respectively. If these hold, we can see a rise to 45 (Brent) and 42 (WTI) in the coming days. From there, further rise towards 50 and 45 (respectively) could be possible.
Gold (1806) has finally risen above 1800 while support at 1770 is holding well. The upside momentum looks strong now and while that continues, we may expect a rise towards 1820-1830 initially and then higher towards upper resistance near 1850/65. View is strongly bullish while above 1800. However watch for a possible dip from 1820/30 initially.
Silver (18.64) however is managing to read below 19. Unless a break above 19 is seen, we may not turn very bullish on Silver. Watch for a possible dip towards 18-17 on a rise to 19.0-19.5 in the near term. Any such pullback could drag Gold lower too in the near term.
Copper (2.7935) ran into profit-taking at 2.80 yesterday itself falling to 2.74 but has risen back to higher levels again. It looks like 2.80-82 can be a good Resistance now, producing a dip to 2.70-65.
FOREX
Dollar Index looks weak for the near term while Euro and USDJPY looks stable. EURJPY, Pound and Aussie look bullish while above immediate support levels. Yuan may trade sideways within 7.0-7.03 region while we may also expect some Rupee weakness today.
Dollar Index (96.95) remains below 97.20 and is not able to manage a rise beyond that. A dip towards 96.5-96.0 could be on the cards for the near term with interim attempts to rise above 97. Overall view looks sideways ranged below 97.30/20.
Euro (1.1277) has scope to dip towards 1.1250 or even 1.1215 in the near term. Broad range of 1.1350-1.1215 could hold for the next few sessions.
EURJPY (121.39) has daily trend support near 121 which if hold could take the pair higher towards 122 or even higher. On the weekly charts there is scope for a rise to 123-124 in the coming weeks. View is bullish while 121 holds.
Dollar-Yen (107.63) has moved up slightly but remains within a sideways range for the past few sessions. A rise to 108.0-108.2 and higher would be needed to turn further bullish on USDJPY. Else we may expect another dip on a test of 108.20 in the near term.
Aussie (0.6941) is trading just at daily trend support and while that holds, Aussie could pick up momentum to rise towards 0.70/71 again. On a slightly longer timeframe, 0.71 is a strong resistance which could potentially push Aussie back towards 0.68 or lower. Some sideways movement is possible within 0.68-0.71 but only a sharp break below 0.68 would make Aussie further bearish in the longer run.
Pound (1.2558) has broken above 1.2523 mentioned yesterday and could now be bullish for a rise towards 1.2600-1.2730 in the near term. Overall near to medium term is sideways to bullish.
USDCNY (7.0184) is holding above immediate support at 7.00 and while that holds, we may expect some sideways trade above 7.00 limiting the immediate upside at 7.03. View is sideways for the rest of the week.
USDINR (74.96) bounced back sharply to close just below 75. Note that 75.00-75.10 is a crucial resistance now which could be tested today. Thereafter, we would wait to see if the pair faces rejection and falls back to below 75 or manages to rise past 75.10 in the coming sessions. For now watch price action near resistance levels.
INTEREST RATES
The US Treasury yields have dipped and could head towards respective supports in the near term before seeing a fresh rally. The German yields on the other hand have risen while above immediate trend supports and could be bullish for the near term. The 10Yr GoI has fallen to our expected levels and we wait to see a bounce from there; else view could turn negative for the near to medium term. Overall view is bearish for the 10Yr Indian GOI yield.
The US 2Yr (0.16%) is stable while the 5Yr (0.29%), 10Yr (0.65%) and the 30Yr (1.38 %) have dipped by 1-2 pips from lebels seen a day before. We retain our view of seeing a dip to test the supports at 0.60%-0.58% on the 10Yr and 1.30%-1.25% on the 30Yr first before we see a fresh leg of rally. Overall view for the next few sessions is bearish.
The German 2Yr (-0.674%), 5Yr (-0.661%), 10Yr (-0.427%) and the 30Yr (0.014%) yields have all risen from levels seen yesterday. As mentioned yesterday, the yields look bullish just now while above immediate trend supports. A rise towards 0.05% on the 30Yr and -0.40% on the 10Yr may be seen in the near term. On the medium to longer term, we would wait to see if the yield manages to rise past 0.05% (30Yr) and -0.40% which may trigger further upside taking the yields higher towards 0.20% (30Yr) and -0.30%/-0.25% (10Yr) respectively.
The 10Yr GOI (5.7928%) fell sharply yesterday after trading in a narrow sideways range for a few sessions. Our expected 5.78% remains intact but we would wait to see if the yield manages to bounce back from here for the coming sessions. Failure to see a rise from 5.78% could produce a sharper decline in the medium term towards 5.70% or even lower towards 5.50% in the longer run. We would wait to see price action near 5.78% today and wait for further confirmation. Overall trend is bearish for the near to medium term.
