STOCKS
Most Equity indices saw an uptick yesterday. The overall outlook remains much the same. Further upside is possible in the DAX (12799.97, +166.26, +1.32%), Nifty (10802.70, +34.65, +0.32%) and Sensex (36693.69, +0.27%).
The Shanghai (3415.66, -27.63, -0.80%) has dipped slightly after an upmove seen yesterday. We are staying on the sidelines to see if breaks above 3450-3500 in the current thrust, or if it needs to dip towards 3300-3200 before that.
The Nikkei (22611.47, -173.27, -0.76%) staged a strong rise yesterday, but still has Resistance coming up overhead at 23000. A break thereof is needed to take the Nikkei up towards 24000. Before that a short corrective dip could be in place over the next couple of sessions.
Dow (26085.80, +10.50, +0.04%) was stable yesterday but has immediate trend support at current levels which if holds could push the index higher in the near term. We would continue to wait and watch as a break below current levels and further below 25000 could be bearish for the medium term.
Nifty (10802.70, +34.65, +0.32%) and Sensex (36693.69, +0.27%) may continue its upmove towards 11200 and 38300 respectively as mentioned yesterday.
Repeating from yesterday’s comments, KOSPI (2176.01, -10.05, -0.46%) seems to have hit Resistance at 2200 and needs to dip towards 2100-2050 (at least) before it can try to break higher. View could be bearish for Kospi for the near term.
COMMODITIES
Microscopic sideways movement seen in Crude prices which if hold below respective resistances could see a dip in the near term below our mentioned short term supports. However, longer term view is bullish. Gold has also dipped slightly but could face support below current levels. Silver trades higher for the day while Copper has dipped a bit and could be stable before moving on either side. Resistance is seen at 3 on Copper that is likely to hold for now.
Very interesting microscopic sideways movement in Brent (41.87, -1.99%) and WTI (39.14, -2.39%). Immediate Resistances at 43.50 and 41 respectively. We expect both to rise towards 50 and 45 respectively. But, if the bounce doesn’t come in soon, then the Supports at 41 and 38 could give way.
Gold (1799.40) has just dipped below 1800 and trades slightly lower today while Silver (19.41) holds high. The corrective fall in Gold can extend to 1790 which is a strong support from where a bounce could push the prices back towards 1830-1850 in the longer run. Silver on the other hand has support near 18.50-19.00 and while that holds we may not negate a test of 20. Broad range of 20-18.50 may hold for some time.
Copper (2.91) is hesitating to break above 3.00. While the Resistance at 3.00 holds, it might see a dip towards 2.80 in order to attract fresh buying. Note that the Gold/ Copper ratio (615) has also come down to test an important Support near 612 (coming up from 430 in Apr-19) and might bounce a bit from there in the near term. That said, the longer term trend remains bearish towards 580-560 while below 640-660.
FOREX
Dollar Index looks stable and could rise within the mentioned range while Euro may dip towards 1.13. Aussie and Pound looks weak too. USDCNY may rise a bit while we keep a close watch on Rupee. EURJPY may fall while below 122 and USDJPY looks likely for a dip too. Overall most pair are looking weak for the near term.
Dollar Index (96.56) has again bounced from 96.27 and while that holds, the index could again move up to 97 in the coming sessions. We continue to look for ranged movement between 97 and 96 in the near term.
Euro (1.1340) has started to dip after testing an intra-day high of 1.1375 yesterday. The resistance near 1.1406 remains intact while Euro may come off towards 1.13 in the near term before again bouncing back later.
EURJPY (121.52) has moved up sharply but may find it difficult to break above 122 just now. We may expect some movement in the 120-122 region while the pair may keep attempting to break above 122. Another 2-3 attempts could finally take the pair higher in the longer run. We would have to keep a watch at price action when it nears 122.
Dollar-Yen (107.12) could fall while below 107.50. A test of 106.53 could be possible in the near term.
Aussie (0.6937) has dipped indicating that 0.70 is holding well for now and while that continues to hold, Aussie may find it difficult to break on the upside and move higher. In that case, we may have to allow for a dip towards 0.68 in the coming sessions. Our earlier mentioned 0.71-0.72 could be delayed for now as we look for a bearish Aussie for the coming sessions while below 0.70.
Pound (1.2548) is looking bearish and could fall towards 1.2445 while below 1.2667.
USDCNY (7.0086) is slightly higher today but as mentioned yesterday we may look for a rise towards 7.03 on the upside while we expect the fall to be limited to 6.95.
USDINR (75.1950) did fall to 75.08 but could not sustain the dip and rose back to close at higher levels. We continue to watch 75.30 as crucial level and while that holds a dip to 74.90 could be possible. Any attempt to break above 75.30 could open up chances of 75.50 in the medium term.
INTEREST RATES
The US Treasury yields have fallen and could dip some more towards respective supports while the German yields have risen sharply from our mentioned supports in line with our expectation. The 10Yr GOI has alos bounced from support near 5.75% and now looks bullish for a rise towards 5.80/82%.
The US 2Yr (0.16%), the 5Yr (0.29%), 10Yr (0.62%) and the 30Yr (1.31%) have dipped and could have some more room to dip towards near term suport leevls from where a bounce is possible by the end of this week. A dip to 0.60%-0.58% on the 10Yr and 1.30%-1.25% on the 30Yr could still be possible in the near term. View is bearish for the near term.
The German 2Yr (-0.661%), the 5Yr (-0.63%), the 10YR (-0.415%) and the 30Yr (-0.009%) have all risen sharply from respective supports as mentioned yesterday. The yields look bullish for another couple of sessions and could rise further from here towards -0.63% (2Yr), -0.60% (5Yr) and -0.38% (10Yr) respectively.
The 10Yr GOI (5.7867%) is headed towards 5.80/82% before a dip is possible. Overall we may expect a maximum upside of 5.85/86% while the longer term trend is still pointing to the downside. Watch price action on a rise to 5.80/82% in the near term.
