STOCKS
Dow is likely to remain within 34750-33750 range while Dax is fluctuating within a narrow range above 15000. There is scope for an eventual rise to 15400/500. Nikkei has support at 27000 which may hold to produce a bounce in the near term. Shanghai markets are closed but we may see a possible higher opening on Friday when the index opens after a long holiday. Nifty and Sensex can continue to rise steadily in the near term towards 18000-18250 and 60/61000 respectively.
Dow (34314.67, +311.75, +0.92%) has risen but continues to hold within the 34750-33750 range which could continue for the next few sessions. Unless a break on either side is seen, it is difficult to say which direction it would break just now.
DAX (15194.49, +157.94, +1.05%) rose a bit while above 15000. The index seems to be fluctuating above 15000 just now and needs a sharp bounce to test 15400/500 on the upside. A narrow 15300-15000 range is possible just now.
Nikkei (27544.06, -278.06, -1%) has fallen further today. It has strong support at 27000 mentioned yesterday, which can hold and produce a bounce towards 28000 or higher in the coming sessions. Watch [rice action near 27000 if a fall is seen.
Shanghai (3568.17, +31.87, +0.90%) markets are closed till 7th Oct. While above 3550, view is bullish. We need to wait and watch to see where it opens after the long break.
Nifty (17822.30, +131.05, +0.74%) opened lower at 17661.35 and rose steadily to close above 17800 yesterday. The index needs to sustain above 17800 for it to rise further towards 18000-18250. Any break below 17800 can take it down towards 17600 on the downside. While above 17800,a steady rise towards 18000/250 is possible in the coming sessions. Broad range of 18000/250-17800/600 may hold for the near term.
Sensex (59744.88, +445.56, +0.75%) has risen in line with our expectations. 59000 is a crucial level as mentioned previously. While the index is above 59000, view remains bullish to see a rise towards 60000.
COMMODITIES
Crude prices have moved up and have scope to see some more upside while above earlier broken resistance levels. Brent has room to test 85/86 while WTI may test 80 before a decline is seen. Gold and Silver are likely to be ranged within 1720/40-1760/80 and 21.50-23 region while Copper may head towards 4.0-3.80 before bouncing from there eventually.
Brent (82.43) has immediate resistance near 82.65 which if holds can pull the price down to 81-82 just now. A break above 82.65 can take it higher towards 85.65-86 levels or even higher towards 92 on the upside. Watch price action near current levels.
WTI (78.77) has risen as expected and may continue to rise to test 80 before a dip is seen from there.
Gold (1755.10) is ranged within 1780/60-1740/20 region and may continue so for a few more sessions.
Silver (22.49) is also ranged within 21.50-23 region and may continue so for some more time.
Copper (4.1340) has fallen sharply and could test crucial support at 4 before bouncing back towards 4.25/35 on the upside. Failure to bounce from 4 can drag it lower towards 3.80. Watch price action near 4.
FOREX
Dollar Index has risen above 94 and can slowly head towards 94.75-95 pushing down Euro towards 1.1550/45-1.1495 in the medium term. EURJPY is likely to be ranged within 128-130.50. Aussie and Pound too look ranged for the near term within 0.7320-0.7220 and 1.3750-1.34 region respectively. USDJPY can rise towards 112 or even 112.50 on the upside. USDINR can re-test 74.65, a break above which will open up chances of testing 74.75/80-75.20 on the upside.
Dollar Index (94.048) has risen back again to above 94 and has scope to rise towards 94.75-95 on the upside. Can rise while above 93.75.
Euro (1.1592) can slowly head towards 1.1550/45-1.1495 while below 1.1640/50. Overall view is bearish below 1.1650.
EURJPY (129.41) had risen well within the range of 130.50-128 . The range may continue to hold for the near term.
Dollar-Yen (111.59) has risen back to 111.60 as expected and if the rise continues, we may expect a further rise to 112. Any break above 112 can extend the rise to 112.50 n the upside.
Aussie (0.7266) can hold below 0.7320 and fall to 0.7220-0.72 on the downside. Broad range of 0.72-0.7320 may hold for now.
Pound (1.3616) has risen well but can face resistance near 1.3650-1.3750 region to fall back towards 1.35 or lower.
USDCNY (6.4466) will open on Friday after a long break. Support is seen at 6.44 which may hold to produce a bounce towards 6.47/48.
USDINR (74.45) came down from immediate trend resistance at 74.65 yesterday to fall towards 74.45 as expected but the pair can rise back today to re-test 74.65. Note that 74.65 would be a make or break level, a break on the upside would open up 74.75/80-75.20 else a fall to 74.40/20-74.00 would come into the picture.
INTEREST RATES
The US Treasury Yields have risen sharply and are heading up to test their crucial long-term resistances. While we expect the resistance to hold and trigger a pull-back in the coming days, a strong break above these resistances will be bullish to see further rise. The German yields are moving up as expected and are coming closer to their crucial resistances from where we expect a reversal. The 10Yr and 5Yr GoI spiked up yesterday and have come-off from the day’s high. We see limited room on the upside from here and a reversal is on the cards.
The US 2Yr (0.29%), 5Yr (0.99%), 10Yr (1.54%) and the 30Yr (2.11%) %) have risen sharply across tenors yesterday. The 10Yr has risen past 1.5% and can now test the crucial resistance level of 1.6%. The 30Yr has room to test 2.2% in the coming days. 1.6% on the 10Yr and 2.2% on the 30Yr are crucial resistances to watch. Whether the yields break above these resistances or not will be deciding the move going forward. We will have to wait and watch.
The German 2Yr (-0.71), 5Yr (-0.56%), 10Yr (-0.19%) and 30Yr (0.29%) yields are moving up in line with our expectation and are keeping our near-term bullish view intact. The 10Yr has risen above -0.2% and can now move up to -0.2%. The 30Yr is heading up towards 0.30%-0.35% as expected. We expect the yields to reverse lower from -0.2% (10Yr) and 0.35% (30Yr) and resume the long-term downtrend.
The Indian 10Yr GoI (6.2610%) spiked to 6.2826 and has come-off from there. 6.3%-6.32% can be tested but a break above it could be difficult. We expect the upside to be capped at 6.32% and the yield to reverse lower towards 6.2% going forward.
The 5Yr GoI (5.6920%) tested 5.72% as expected and has come-off from there. 5.68%-5.66% is an immediate support which has to be broken to see a deeper fall and turn the view bearish. While above this support zone, the chances of seeing 5.75%-5.76% on the upside cannot be ruled out.
