STOCKS
Dow has recovered from the sharp fall seen last week and may continue to move up now while Dax still trades lower but needs to sustain above 15000 to slowly move up. Nikkei needs to sustain above crucial support at 28000 to move up eventually while Shanghai is bullish above 3500. Nifty and Sensex may move up today.
Dow (34326.46, +482.54, +1.43%) has bounced well from levels below 34000 seen last week. A rise to 34500-34750 and towards 35000 can be possible in the near term.
DAX (15156.44, -104.25, -0.68%) has fallen after a sharp bounce from 15000 seen last week. A rise to 15400-15500 cannot be negated if the index sustains above 15000.
Nikkei (28497.57, -273.50, -0.95%) has fallen sharply to test 28500 as expected. Breaking below 28500, we may now look for a test of 28000 which is a strong support and can hold to produce a bounce back to 29000-29500.
Shanghai (3568.17, +31.87, +0.90%) markets are closed till 7th October. While above 3500, view is bullish.
Nifty (17532.05, -86.10, -0.49%) made a low of 17452 before closing above 17500 last week. We expect the support level at 17400\200 to hold and produce a bounce towards 17600 to further see a steady rise towards 18000 in the medium term. A rise in Nifty can be seen today as it is the first week of new contract..
Sensex (58765.58, -360.78, -0.61%) has broken below the support level of 59000,a bounce form the level of 58500-58000 can be seen towards 59000-59500.
COMMODITIES
Crude prices have risen and could be stuck in a sideways range below immediate resistances of $80 on Brent and $76 on WTI. We would wait for price confirmation to indicate that a top is in place for the medium term. Gold has risen well and a sustained trade above 1760 can take it higher to 1780/90 on the upside. Silver can rise to 23-23.50 while above 21.50. Copper is bullish while above 4.05 and can test 4.25/35 soon. Possible sideways trade between respective supports and resistances look likely for now.
Brent (78.97) has immediate support near 77 (moved up from 76 mentioned in the last week) and a possible rise from 77 back to 80 cannot be negated. A range of 77-88 can hold for the very near term before a decline is seen towards 74 or lower in the medium term. As mentioned last week, we need to see a decisive break below 76 to confirm a reversal in Brent. WTI (75.53) on the other hand has immediate resistance near 76 which if holds can keep the price between 76 and 73 for sometime.
Gold (1762.60) if manages to rise above current levels can break above immediate trend resistance and head towards 1780/90 on the upside. On the downside, 1720 continues to hold as important support.
Silver (22.60) has risen well from 21.50 last week and while the bounce sustains, a test of 23-23.50 looks possible followed by a decline again from there.
Copper (4.1870) is holding well above 4.00 and the bounce seen on Friday needs to sustain above 4.25 in order to rise further to 4.35/40, else a dip from 4.25 can take the price down towards 4.05 again in the near term. Watch price action closely near current levels.
FOREX
Mixed view on currencies just now. Pound and Aussie have recovered a bit on Dollar weakness but unless a confirmation is seen that Dollar Index will not rebound to test 94.5 and remain lower, movement in Aussie and Pound could be dicey. Euro has bounced to 1.16 but unless a break above 1.17-1.1750 is seen in the medium term, we keep our bearish view of testing 1.15-1.14 intact. EURJPY may test support at 128 which if holds may produce a bounce to 130.50 else a fall to 127 cannot be negated. USDCNY can be ranged within 6.44-6.47/48. Any break below 6.44 can trigger a fall to 6.41/40. Watch a bounce in Dollar-Rupee from 74.0/10 else we may expect a test of 73.80 on the downside.
Dollar Index (94.04) tested 93.90 before bouncing back from there. If immediate interim support near 93.90/80 holds, we may see yet another rise from here towards 94.50 or higher, which could bring in fresh volatility in other currencies. Else a break below 93.80 is needed for the index to fall. For now watch price action within 93.80-94.50 region.
Euro (1.1598) tested 1.1562 and has bounced from there. It needs to sustain a rise above 1.16 to head higher to 1.1650-1.17 in the near term. Thereafter a fall back to current levels look possible. Any reversal signal will need a break above 1.1750. Till then we continue to keep intact a possible test of 1.15-1.14 in the medium term
EURJPY (128.81) has support near 128 which if holds can produce a bounce to 129-130.50 again in the medium term. Failure to rise from 128 can open chances of a further fall to 127-126. Watch price action near 128 for now.
Dollar-Yen (111.08) has declined sharply from 112.079 seen last week. As resistance near 112 holds, the pair may test 110.80-110.50 before again rising back from there.
Aussie (0.7260) is attempting to move up and can rise towards 0.7320 slowly in the near term. On the downside 0.7170 may hold well.
Pound (1.3539) rose well from 1.34 last week. A possible rise to 1.3650 looks possible before a decline is seen from there.
USDCNY (6.4452) may continue to old within 6.47/48-6.44 range and any break below 6.44 can lead to a fall towards 6.41/40.
USDINR (74.1250) #usdinr-candles-Daily} needs to break above 74.35 to test 74.50 else fall below 74.10/00 to head lower towards 73.80. A broad range of 73.80-74.40/50 and narrow range of 74.00/10-74.30 may hold for now.
INTEREST RATES
The US Treasury Yields have dipped further but have near-term supports which have to be broken to see a much deeper fall and avoid a fresh rise. The German yields have dipped slightly but remain bullish in the near-term to test their long-term resistances and then reverse lower to resume the broader downtrend. The 5Yr and 10Yr GoI are moving up in line with our expectation. They have key resistances ahead which if broken can see an extended rise this week.
The US 2Yr (0.26%), 5Yr (0.93%), 10Yr (1.46%) and the 30Yr (2.03%) %) have dipped further on Friday. The 10Yr sustains below 1.5%. A break below 1.4% from here will negate the chances of seeing 1.6% on the upside and drag it to 1.3% and lower again. The 30Yr must break below 2% to revisit 1.9%-1.8% levels and also negate the chances of seeing 2.1%-2.2% on the upside
The German 2Yr (-0.71), 5Yr (-0.59%), 10Yr (-0.23%) and 30Yr (0.25%) have dipped across tenors on Friday. The near-term view is bullish. The 30Yr can rise to 0.30%-0.35% while it sustains above 0.2%. The 10Yr has an immediate resistance at -0.2% a break above which can take it up to – 0.1%. Thereafter the yields can reverse lower and see a fresh fall.
The Indian 10Yr GoI (6.2436%)rose further to test 6.25% as expected. 6.26% is an important immediate resistance which if broken can take the 10Yr further up to 6.3%-6.32% – a key medium-term resistance. Thereafter a fresh fall is possible.
The 5Yr GoI (5.6899%) is heading up towards 5.7% in line with our expectation. Resistance is at 5.71%-5.72% which will need a watch. A break above can take the 5Yr up to 5.75%-5.76% again.
