STOCKS
Dow and DAX are attempting to break above their immediate resistances in order to move up further. The bias is bullish for the Dow and DAX to break their resistances and move higher. Nikkei sustains higher and remain bullish in the near-term to test its crucial resistance from where we expect it to see a corrective fall. Shanghai is coming closer to its key intermediate support which needs to hold in order to prevent further fall. Sensex and Nifty had closed on a flat note yesterday but remains bullish move up further.
Dow (28248.44, −60.02, -0.21%) failed to sustain the break above 28300 yesterday. Key near-term supports are at 28000 and 27800. While above these supports, we retain our bullish bias of seeing a strong break above 28300 and a rise to 28500-29000 in the coming days.
The resistance at 13200 is holding on the DAX (13061.62, −4.92, -0.04%). Inability bounce-back and close above 13200 today can increase the chances of seeing a dip to 12800-12700 again. That in turn will delay our preferred break above 13200 and a rise to 13800. While above 12700, the broader bullish bias of seeing a test of 13800 on the upside will remain intact.
Nikkei (23257.17, −39.60, -0.17%) sustains higher above 23000. A strong rise past 23500 will trigger our preferred rise to 23800-24000. As we mentioned yesterday, 24000 is a crucial resistance from where we would be looking for a corrective fall.
Shanghai (3359.30, −14.28, +0.42%) has come down towards 3350 failing to break above 3400. Immediate support is at 3330 which will need a close watch. A break below 3330 will increase the chances of the fall extending to 3300-3250 going forward and will bring the 3180-3450 range into play. While 3330 holds, a bounce-back move to 3400-3450 is possible and the narrow 3330-3450 range will remain intact.
Nifty (11472.25, +5.80, +0.05%) had come-off from the day’s high of 11525.9 to close on a flat note yesterday. However, while above 11400, our bullish view of seeing 11600 and 11750-11800 levels on the upside remains intact.
Sensex (38843.88, +44.80, +0.12%) tested 39000 yesterday but could not break above it. With a cluster of support in the 38500-38000 region, the bias remains bullish to see a strong break above 39000 and a rise to 39500-40000 in the coming days.
COMMODITIES
Crude prices have risen and could indicate some bullishness in the next few sessions while Gold and Silver trade above immediate supports which if hold could see a bounce in the near term. Copper is stable between 2.90-3.05 both being immediate support and resistance levels.
Brent (45.97) and WTI (43.32) have both moved up and could possibly be showing initial signs of a rise from the narrow and stable range seen for quite sometime now. Initial rise towards 47.50 and 44-45 looks likely before a sharper rally is seen targeting 50 and 48 respectively on the upside.
Gold (1934.30) needs to break below immediate support at 1920 in order to move lower towards 1880, indicating a bearish sentiment for the medium to long term. But while the price holds above 1920, there is fair chance of it moving back towards 1940/60/80 in the sessions to come. Also a break above 94 on the Dollar Index (refer to Forex section below) could drag down prices below 1920, indicating a bearish phase.
Silver (26.52) too has immediate support at 26 which if holds could produce a bounce back towards 28-29 in the near term. View is bullish while above 26.
Copper (2.9440) is finding it difficult to break above 3.05, the resistance on the near term charts and we may expect some trade within 2.90-3.05 in the near term. We expect an eventual break on the upside soon.
FOREX
Dollar Index is stable. Euro and Pound looks stable too for the near term. EURJPY, Dollar-Yen, Aussie, Yuan and Rupee looks strong for the near term.
Dollar Index (93.12) is stable above 93. We may expect some ranged move within 92.85-93.45 in the next couple of sessions before any sharper movement comes in. Broad range of 92-94 is likely to hold for a couple of weeks more.
Euro (1.1817) has immediate support near 1.1740 and while that holds, we may expect ranged movement for some more time. Immediate view is to see some stability with a maximum upside of 1.19.
EURJPY (125.85) is coming off from the session high of 126.14 and has fair scope of rising while above 125. View is stable to bullish while above 125.
Dollar-Yen (106.48) has moved up. But watch price action near 107 which if unable to break on the upside could bring back the pair lower towards 105 again. A break above 107 is needed to take the pair towards 108-108.5 in the medium term.
Aussie (0.7191) is trading higher from levels seen yesterday. Near term trade is likely to be ranged for now but may move up towards 0.73/74 soon.
Pound (1.3134) has been fluctuating within a decent range but has been able to manage to slowly move lower in the last few sessions. Trade within 1.30-1.32 looks likely for now.
USDCNY (6.9048) is looks bearish for a test of 6.90. A break below that, if seen could take it lower towards 6.88/86 in the medium term.
USDINR (74.3250) fell from session high of 74.50 yesterday to close lower. Immediate support at 74.15 is holding well but the pair could soon be seen breaking lower towards 74.0-73.80 in the coming sessions. View is bearish while below 74.50.
INTEREST RATES
The US Treasury yields have risen further from levels seen yesterday. A strong follow-through rise today will negate our view of seeing a near-term dip and in turn will take the yields higher from here itself. We will have to wait and watch. The German Yields have also risen back sharply. A strong break above immediate resistances will negate our bearish view. The 10Yr GoI has come-off sharply but is likely to find support in the 6.10%-6.07% region and keep our broader bullish view intact.
The US 2Yr (0.15%) and 5Yr (0.30%) Treasury yields remain stable while those at the far-end, 10Yr (0.69%) and the 30Yr (1.40%) have moved up further from levels seen in the early Asian trades. A further strong rise above 0.70% can trigger our preferred rise to 0.80% on the 10Yr without seeing a fall 0.60% that we were looking for. In that case the 30Yr can also move up to 1.50% from here itself.
The German 2Yr (-0.67%), 5Yr (-0.65%), 10Yr (-0.43%) and the 30Yr (0%) have bounced sharply across tenors. A strong rise past -0.39% will negate our bearish view of seeing a fall to -0.55% on the 10Yr and will take the yield up to -0.30%. The 30Yr on the other hand will room to test 0.07% on the upside and strong rise above 0%. We will have to wait and watch.
The 10Yr GOI (6.1580%) fell-back sharply to test 6.10% during the day yesterday. However, the Yield had manged to recover well from the day’s low. 6.10%-6.07% will be a good support zone that can limit the downside. While above this support zone, the bullish outlook of seeing 6.30/35% on the upside remains intact.
