STOCKS
Equities trade in a mixed fashion. Dow and Dax have dipped. Dow can fall towards 35500-35250 while below resistance at 36000. Dax can fall to 15400 but remains within 15400-15900 for the near term. Nikkei can fall to 28500/250 while below resistance at 29500/250. Shanghai has broken below support at 3550 and can fall towards 3500 in the next few sessions. Nifty and Sensex have scope to rise on the upside while above important supports at 18000 and 60000.
Dow (35490.69, -266.19, -0.74%) has come down sharply after testing the high of 35892.92 yesterday. While resistance at 36000 seems to be holding well, we may expect a corrective fall towards 35500-35250 levels.
DAX (15705.81, -51.25, -0.33%) has fallen after testing the high of 15744.79. A range of 15900-15400 may hold for the near term. Any break on either side can take the index towards 16000-16200 or 15200-15000 in the medium term. For now watch price action within 15900-15400.
Nikkei (28825.62, -272.62, -0.94%) has fallen sharply today. The index can fall while below 29500-29250 towards 28500-28250 or even lower in the near term. A break above 29500 is necessarily needed for Nikkei to rise and signal bullishness towards 30000/31000 in the longer run.
Shanghai (3530.90, -31.8, -0.89%) has broken below important trend support at 3550. Sustained trade below 3550 can take the index down to 3525-3500 initially.
Nifty (18210.95, -57.45, -0.31%) went up to test 18342.05 before coming down from there. The range of 18000-18400 is still intact and our view remains bullish on a break above 18400 towards 18600/800.Only a strong and sustained break below 18000, if seen can trigger a fall towards 17600/400 but this looks less likely for now.
Sensex (61143.33, -206.93, -0.34%) is heading towards the level of 62000 and 63000 in the medium term while above 60000/61000.
COMMODITIES
Volatility seen in commodities today. Crude prices have fallen sharply and probably indicating early signs of reversal. For now, a fall towards 80/78 on Brent and 79/77 on WTI is possible. Gold is up on Dollar weakness and it needs to sustain above 1800 to rise towards 1820/40. Else a fall back to 1780/60 cannot be negated. Silver can range within 23.50-25 while Copper has immediate support at 4.40 which needs to hold to see a bounce back to 4.45/50. A break below current levels can drag the price to lower levels of 4.30/25.
Brent (82.70) and WTI (81) have fallen sharply due to rise in US crude inventories stated by the API weekly release yesterday. Inventories rose 2.3mln barrels for week ended 22nd Oct, higher than amalyst expectations of 1.9mln barrel gain. This has sent down the crude prices sharply lower. The fall is healthy for the crude prices ahead of the OPEC meeting next week. A fall to 80/78 on Brent and 79/77 on WTI is likely to be seen in the next 1-2 sessions.
Gold (1801.10) has risen today on Dollar weakness. A strong and sustained break above 1800 is needed for the view to be bullish towards 1820/1840.While below 1800 the view remains bearish to see a fall down towards 1780/1760. Watch price action to see if the price sustains above 1800 or not.
Silver (24.09) is holding above 24 and could have scope for a rise back to 25. On the downside, 23.50 could be the limit.
Copper (4.3930) has fallen to test crucial support at current levels. A fall below 4.39 can drag the price lower towards 4.30/25 else a bounce from current levels can take the index back towards 4.45/50.
FOREX
Dollar Index has dipped below 94 taking Euro up to 1.16. Whether the movement would sustain or not needs to be seen. EURJPY has support near 131.50 which if holds can produce a bounce towards 132.50 soon. Aussie and Pound can be ranged within 0.7450-0.7550 and 1.37-1.38 respectively. Dollar-Yen can be ranged too within 114.50-113.20 for the near term before breaking on either side. USDCNY has risen well while above support near 6.3750. A rise towards 6.42 can be a possibility while the upmove sustains. USDINR can continue within narrow range of 74.90-75.05 and broad range of 74.70/50-75.20/25 for the medium term.
Dollar Index (93.81) has dipped from 94, unable to sustain higher. A range of 93.50-94 may hold for now and a break above 94, if seen can take the index to 94.50 before a decline is seen again from there. Narrow range of 93.50-94 and broad range of 93.50-94.50 may hold for the near term.
Euro (1.1608) is stuck around 1.16,finding it difficult to move on either side of the level. A test of 1.1650-1.17 is still a possibility on the upside while immediate downside could be limited to 1.1550.
EURJPY (131.86) has immediate support near 131.50 which can hold and produce a bounce to 132.50 in the near term. Any break below 131.50 would be further bearish towards 131-130.70/50. Watch price action while above 131.50.
Aussie (0.7504) could not rise above 0.7550 and has instead fallen from there. While below 0.7550, Aussie can fall towards 0.7450 keeping a range of 0.7550-0.7450 for the near term.
Pound (1.3741) broke below 1.3758 but is holding above 1.37 just now. Immediate range of 1.37-1.38 can be seen till we see a decisive break on either side.
Dollar-Yen (113.57) is ranged within 114.5-113.20 and could hold for some more sessions before a break on either side is seen in the medium term.
USDCNY (6.3983) has risen. While above support at 6.3750, there is chance for the pair to rise towards 6.42.
USDINR (75.03) traded within 74.90-75.05 yesterday and could hold within this range today also. Any break on either side can extend the movement towards 74.70/60/50 or 75.20/25. Rise from 75 is likely to be limited at resistance near 75.20/25.
INTEREST RATES
The US Treasury Yields have declined sharply at the far-end and the curve flattening strengthens. The far-end yields can fall further ahead of the US Federal Reserve meeting next week. The German yields have reversed lower as expected but indeed at a much faster pace. The expected fresh fall has begun and can extend in the coming days. The 10Yr and 5Yr GoI are stuck in a narrow range. They can consolidate in the near-term with a bearish bias.
The US 2Yr (0.52%) Treasury yield has risen sharply while the 5Yr (1.17%), 10Yr (1.55%) and the 30Yr (1.96%) have come-off sharply. The 30Yr has declined below 2% and can extend the fall to 1.85% while it sustains below 2%. The 10Yr can test 1.5% and can fall further to 1.4% on a break below 1.5%. The chances of seeing rise past 1.75% (10Yr) and 2.2% (30Yr) stands highly reduced now.
The German 2Yr (-0.66%) and 5Yr (-0.47%) yields remain stable while the 10Yr (-0.18%) and 30Yr (0.15%) have declined sharply. The 10Yr has come down towards -0.2% as expected and can fall further to -0.3% and even -0.4% in the coming weeks. The 30Yr has declined below 0.2% and can now fall to 0.1% initially and then 0% eventually.
The Indian 10Yr GoI (6.3356%) is stuck between 6.33% and 6.38% over the last few days. The view of seeing a broad consolidation between 6.3% and 6.4% remains intact. Bias is bearish to break 6.3% while below 6.4%.
The 5Yr GoI (5.7167%) continues to trade in the narrow 5.7%-5.76% within the broad 5.66%-5.76% range.
