STOCKS
Dow and Dax are up slightly while Nikkei and shangahi have dipped. Nifty and Sensex are in a corrective fall and could fall some more before resuming the uptrend. Sensex can test 61000-60000 while Nifty can fall to 18200/18000. Nikkei and Shanghai needs to trade above 29500 and 3600 respectively to turn bullish for the near term. Dow needs to sustain above 35000 and Dax above 15500. Almost all indices have important levels above which the bullish view will continue to hold. Watch for a possible corrective dip in the near term across all equity indices.
Dow (35457.31, +198.70, +0.56%) has risen slightly. While above 35000,a test of 36000 looks possible in the coming sessions. Only if, it breaks below 35000, a fall towards 34000/33750 can be seen. Watch price action near current levels.
DAX (15515.83, +41.36, +0.27%) has risen slightly. While above 15500, a rise to 15800/900 can be possible.
Nikkei (29261.51, +45.99, +0.16%) has fallen after testing the resistance at 29500.While below 29500,a fall back towards 28000-27500 is possible. Any bounce back above 29500 can take it higher towards 30000/31000. We wait to see price action near 29500 just now.
Shanghai (3592.03, -1.12, -0.034%) continues to trade within 350-3600 mentioned earlier. A strong break above 3600 is needed to see a rise to 3700. However, if we see a break below 3500, we may bring back 3400/3375 into the picture.
Nifty (18418.75, -58.30, -0.32%) faced profit taking below 18600 and while that holds, a fall to 18200/18000 can be seen in the near term.
Sensex (61716.05, -49.54, -0.08%) too tested 62000+ but could not sustain higher. A fall to 61000-60000 can be possible for now.
COMMODITIES
Precious metals look sideways ranged for the near term with some upside possible on Silver. Gold is sideways within 1790-1740. Copper has dipped a bit and could test support near 4.60/55 before bouncing back again to higher levels. Crude prices have dipped a bit but need to sustain below 85 (brent) and 83 (WTI) to fall further else a rise again to make fresh highs cannot be negated in the near term.
Brent (84.57) and WTI (81.97) have both dipped. If Brent remains below 85, it can fall towards 82/80 else a re-attempt to rise above 85 will bring in possibility of 87 on the upside. WTI too needs to sustain below 82/83 to fall lower else a rise to 85 cannot be negated.
Gold (1770.50) could not sustain a rise above 1770 yesterday and has come down a bit instead. Will it again trade in the 1740-1790 sideways range? We need a decisive break on either side to see which way the price moves in the medium term. Till then we look for the mentioned range to hold.
Silver (23.72) can rise to 24.50/25 in the near term while above 23.50.
Copper (4.6305) has fallen sharply. There is room to test support near 6.55/60 before resumption of uptrend is seen. Overall view of targeting 4.90 remains intact for the medium term.
FOREX
Dollar Index has fallen below 93.75 raising concern of a possible fall to 93 which can pull up Euro towards 1.17 or higher. Watch price action near current levels EURJPY has risen well and could be headed towards resistance at 134 before coming off from there. Aussie and Pound can test 0.75 and 1.39 respectively. USDCNY saw a sharp decline yesterday as expected. While below 6.40, view is bearish. Dollar-Rupee may fall today towards 75.20/10 or lower. Need to see if it is allowed to fall below 75.
Dollar Index (93.75) fell to test 93.504 and if it manages to trade below 94 for a few more sessions, a test of lower support at 93 can be seen before any bounce sets in. Break below 93.75 is bearish.
Euro (1.1638) tested 1.1669 yesterday before falling off. If the currency falls back below 1.16, it will reinforce bearishness else a rise above 1.17 needs to be looked at for the coming sessions. Watch price action to see if Euro falls below 1.16 or manages to sustain higher.
EURJPY (133.29) continues to rally and is headed towards crucial resistance at 134 from where a rejection looks possible. Any break above 134, if seen will open up chances of a further rise to 138 on the upside in the medium term. Watch price action near 134.
Aussie (0.7483) has risen above 0.7450 and has interim resistance near 0.75 which needs to break to rally further towards 0.76. Else a fall back to 0.74 can be seen from 0.75. Watch price action near 0.75.
Pound (1.3805) has broken above 1.38 and if the rise sustains it can rally further up towards 1.39 in the coming sessions before facing a rejection from there.
Dollar-Yen (114.51) tested 114.70 before slightly coming off from there. A test of 114.75/115 looks possible in the near term which can eventually break on the upside and lead to a rise towards 117/118. Overall view is bullish while above 114.
USDCNY (6.3927) indeed tested 6.3784 in a sharper fall than expected, before bouncing back from there. The corrective bounce from mentioned support near 6.3750 may be short lived and the pair can again fall towards 6.36 which is the next lower support below 6.3750. Watch if 6.3750 holds strong enough to take the pair back to levels above 6.41 or comes down again in the next few sessions.
USDINR (75.3450) was closed yesterday for Eid-e-Milad but saw a fall to 74.92 on the NDF markets. Currently trading at 75.09 on the NDF, there is scope for a fall in the pair today on the onshore market towards 75.20/10. But whether the pair will be allowed to fall needs to be seen. Any break below 75.10 can drag the pair lower towards 74.90/80 on the downside before again bouncing back towards 75.30/50. Else the 75.75/50-75.20/10 range may continue to hold.
INTEREST RATES
The US Treasury Yields have risen sharply at the far-end. The 10Yr will need a close watch to see if it sustains above 1.65% which can take it further higher and negate our view of seeing a reversal. We will have to wait and watch closely. The German yields have bounced back again but the resistances ahead are likely to cap the upside and trigger a reversal going forward. The Indian market was closed yesterday. The 10Yr can negate our view of seeing a pull-back and rise further if it sustains above 6.36%. The 5Yr needs to be seen if it can break the 5.66%-5.76% range on the upside.
The US 2Yr (0.40%), 5Yr (1.17%), 10Yr (1.66%) and the 30Yr (2.11%) have risen sharply at the far-end especially. The 30Yr has room to test 2.2%. The 10Yr can rise to 1.75% and even 2% if it manages to sustain above 1.65% in the coming days. Such a rise will negate our earlier view of seeing a pull-back to 1.5%-1.4%. The movement in the 10Yr yield in the coming days will need a close watch.
The German 2Yr (-0.64), 5Yr (-0.44%), 10Yr (-0.11%) and 30Yr (0.29%) have risen back sharply at the far-end. However, we reiterate that the resistance at -0.1%/-0.05% (10Yr) and 0.35%/0.45% (30Yr) can continue to hold and cap the upside. We expect the yields to see a reversal and a fresh fall to -0.2% (10Yr) and 0.2% (30Yr) initially and then further deeper eventually over the medium-term.
The Indian 10Yr GoI (6.3873%) can rise to 6.45%-6.5% if the break above 6.36% sustains. That will negate our view of seeing a reversal to 6.2% and lower levels mentioned earlier.
The 5Yr GoI (5.7501%) is poised just below the upper end of its 5.66%-5.76% range. A break above 5.76% will negate our bearish view of seeing a fall below 5.66%. In turn it can take the yield up to 5.78%-5.80% and 5.82% in the coming days.
