STOCKS
Some recovery is seen in equities globally. Dow and Dax seems to hold well above 35500 and 15400 and could be headed towards 36000 and 15800/900 respectively. Nikkei and Shanghai also look bullish for a rise to 29500 and 3700/800 on the upside. Nifty and Sensex seems to be holding above crucial supports at 18000 and 60000 respectively and while a above that, a slow and steady rise looks possible.
Dow (35741.15, +64.13, +0.18%) has risen and is heading towards the immediate resistance at 36000. Note that 36000 is a strong resistance which can hold and produce a fall towards 35500-35000 in the coming sessions.
DAX (15599.23, +56.25, +0.36%) has held within the range of 15800-15400 mentioned previously. View remains bullish to see a test of 15800/900 in the coming sessions while above 15400.
Nikkei (29100.57, +500.16, +1.75%) has risen sharply today from a low of 28472.55.The range of 28000-29500 remains intact. A strong break above 29500 is needed for the view to be bullish towards 30000.While below 29500,it can continue to consolidate between 28000-29500 for a few more sessions.
Shanghai (3611.15, +1.29, +0.036%) has risen above 3600 and while the bounce sustains, view remains bullish to test the level of 3700/800 eventually. Watch interim possible resistance at 3675.
Nifty (18125.40, +10.50, +0.058%) made a low of 17968 yesterday but bounced well to close above 18100. The level of 18000 needs a close watch today to see if it holds and keeps the bullish view of seeing 18600/800 intact or gives way for the index to again fall lower. A strong break if seen below 18000 can trigger a sharp fall towards 17400 levels (looks less likely).
Sensex (60967.05, +145.43, +024%) closed over the support of 60000 yesterday. Note that 60000 is a strong support from where the index can bounce towards 61000/62000 again on the upside. Any break below 60000, if seen would be bearish.
COMMODITIES
Commodities trade higher. Gold has broken above 1790 and could be bullish towards 1820-1840 while above 1790. Silver may head towards 25. Copper has bounced and while above 4.45, a rise to 4.60/70 is possible. Crude prices may head higher towards 86/87 on WTI and towards 87.36-90 on Brent before any reversal is seen.
Brent (86.21) and WTI (83.21) have dipped slightly bit overall remains higher with scope of rising towards 87.36-90 on Brent while above immediate support at 85. WTI test 86/87. Immediate view is bullish.
Gold (1805.10) has broken above 1790 and risen well and while above 1790, there is scope for a rise to 1820-1840 in the near term.
Silver (24.52) has 25 as immediate resistance and while that holds, a dip to 24-23.50 is possible on the downside. Only a break above 25 if seen will open up further chances of a rise towards 26-27 again in the longer run. Watch price action near 25.
Copper (4.5450) has bounced from 4.45 and while that holds, a rise towards 4.60/70 is possible in the near term. On the downside there is still scope for a fall towards 4.35/30 which will come into force on a break below 4.45.
FOREX
Dollar Index rose and Euro fell after the German IFO data release yesterday. This has kept Dollar Index above 93.50 and Euro below 1.1665/75 reducing immediate chance of a fall to 93 and a rise to 1.17/1.1710 respectively. Watch price action to see if the current move sustains. EURJPY has started to rise and while above 131.00/50, view is bullish for a rise to 133. Aussie and Pound are bullish for the near term. USDCNY may hold above 6.3750 and rise to 6.41/44 in the near term. Only a break below 6.3750 will turn the view to become bearish. A stronger crude (refer to commodities section above) and a weak Euro may be negative for the Rupee and could take USDINR towards 75.20/25, the immediate resistance above 75.
Dollar Index (93.91) rose yesterday from interim support near 93.50 and while above 93.50, there is scope for a rise to 94.50 on the upside in the near term. Immediate view is bullish while above 93.50.
Euro (1.1598) fell back sharply from immediate resistance zone of 1.1665-1.1675 after the German IFO data release yesterday. This has reinforced a possible decline to 1.1550-1.1500 if it does not immediately bounce back to 1.1625+ levels today. Watch price action to see if the fall sustains below 1.16 or rises back higher over the next couple of sessions. Chances of a rise to our expected levels of 1.17-1.1710 seems reduced for now.
EURJPY (132.15) bounced from 131.86 and can move up towards 132.50-133 on the upside. While above 131.00/50, view is bullish.
Aussie (0.7505) has moved up from 0.7450 and has scope to test 0.7550.
Pound (1.3769) seems to be holding well above trend support near 1.3735/30 mentioned yesterday and a bounce is likely to take the exchange higher towards 1.38-1.3850 slowly in the near term.
Dollar-Yen (113.87) continue the bounce seen yesterday. It seems to have resumed the uptrend towards 114-114.50 and is bullish for the near term while above 113.
USDCNY (6.3818) has dipped slightly but holds above 6.3750. If it manages to hold above 6.3750, we may expect a rise back to 6.41/44 in the near term else a fall towards 6.36/34 cannot be negated in the medium to long term. Watch price action near 6.3750.
USDINR (75.0825) is likely to rise towards resistance near 75.20/25 on the upside and could be supported by a strong Crude and weak Euro. Watch price action near 75.20/25 to see if the pair faces rejection or manages to break on the upside.
INTEREST RATES
The US Treasury Yields have dipped at the near-end (2Yr and 5Yr) while the far-end (10Yr and 30Yr) remains stable. The yields at the far-end have still chances to move up further from here. The German yields have key resistances ahead that can cap the upside and trigger a fresh fall in the coming days. The 10Yr GoI remains stable and can consolidate at higher levels in the range of 6.3%-6.4% before seeing a fresh fall. The 5Yr continues to remain mixed within its broad 5.66%-5.76% sideways range.
The US 2Yr (0.44%) and the 5Yr (1.18%) yields have dipped slightly while the 10Yr (1.64%) and the 30Yr (2.09%) remains stable. Our view remains the same. There are still chances for the yields to test 1.75% (10Yr) and 2.2% (30Yr) while they remain above 1.6% (10Yr) and 2% (30Yr). As mentioned yesterday, the 10Yr will have to break below 1.6% to give an initial sign of weakness and then extend the fall below 1.5% in order to negate the chances of 1.75% and a rise to 2% levels going forward.
The German 2Yr (-0.68%) and the 5Yr (-0.46%) have dipped further while the 10Yr (-0.12%) remain stable. The 30Yr (0.26%) has bounced back slightly but is unlikely to sustain higher and can keep the bearish view intact of falling to 0.1%-0% on a break below 0.2%. The 10Yr has resistance in the -0.1%/-0.05% resistance zone which can cap the upside and drag the yields down to -0.2% and lower in the coming weeks.
The Indian 10Yr GoI (6.3503%) seems to be getting support near 6.33%. It can oscillate in a range of 6.3%-6.4% for some time. The broader view remains bearish while below 6.4% to see 6.2% and lower levels. A strong break above 6.4% is needed to move further up towards 6.45%-6.5%.
The 5Yr GoI (5.7218%) continues to remain mixed and trades stable within the broad 5.66%-5.76% range. 5.7%-5.76% could be a narrow range of trade for now within the broad 5.66%-5.76% range.
