STOCKS
Ranged movements seen in most equity indices while immediate resistances and supports are holding. We need a break on either side of the range to predict the next course of action. Dow and Dax trade within 35500-36000 and 15900-15400/15000 respectively while Nikkei and shanghai trade within 29750-29000 and 3550-3600 respectively. Nifty can trade between 17200 and 17600/800 while Sensex is bearish below 59000. Watch price action for the next few sessions to see if there is any break on either side of the mentioned ranges.
Dow (35804.38, -9.42, -0.026%) has come down slightly. The index has support at 35500 which can hold for now and we can see a test of 36000 soon. As mentioned earlier a strong break above 36000 is needed to see 36250.As such we may expect a sideways consolidation between 35500-36000.
DAX (15878.39, -58.61, -0.37%) has come down sharply and has broken the support at 15900 making a low of 15740.60 yesterday. While below 15900 a fall towards 15400-15000 comes into the picture.
Nikkei (29500.57, +197.91, +0.68%) has risen to 29500 after falling sharply yesterday. Resistance is at 29750 can hold for now. A strong break above 29750 is needed for the view to be bullish towards 30000/31000. Else a fall back to 29250-29000 is possible.
Shanghai (3584.81, -7.89, -0.22%) has come down after testing the immediate resistance at 3600. While below 3600 a fall back towards 3550 is possible before we see a strong break on either side.
Nifty (17415.05, -88.30, -0.50%) has fallen after testing the interim resistance at 17600. The range of 17200-17600/800 continues while above 17200. A strong break on either side is needed to form the next view.
Sensex (58340.99, -323.34, -0.55%) also opened higher but came down after making a high of 58969.12. Immediate view is bearish while below 59000 to see a fall towards 58000 eventually.
COMMODITIES
Stability is seen in most commodities probably because the US markets are closed today. Gold has support at 1780/70 and while that holds, a rise back to 1830/40 is possible in the medium term. Failure to hold above 1770 can drag it lower to 1760/40. Silver can fall to 23-22 while below 25. Copper has surprisingly risen contrary to our expectation of a fall to 4.30. Watch price action to see if the price faces rejection from 4.50/60 which is an immediate resistance.
Brent (82.25) looks stable near levels seen yesterday. A test of immediate resistance near 84/85 is possible before a decline sets in towards 80-78-75 again in the medium term. Watch price action near 84/85. Some sideways consolidation looks more likely just now.
WTI (78.34) on the other hand has immediate resistance near 80 which if holds can produce a fall towards 75 again in the near term. A break above 80, if seen and sustained will trigger fresh rally towards 82.
Gold (1794.10) tested 1786 before bouncing slightly from there. Immediate support is seen near 1780/70 which if holds can produce a bounce back to 1830/40 in the near term. Failure to hold above 1770 can drag it lower towards 1760/40. Preference is to see a bounce from 1770/80 region.
Silver (23.73) has risen slightly but while below 25, there is scope for a fall to 23-22 in the near term. A small sideways pause is possible before falling further.
Copper (4.4635) has risen well towards 4.50/60 initially contrary to our expectation of seeing a fall towards 4.30 on the downside. We would now keep a close watch near 4.50/60 to see if the price faces rejection and falls back from the immediate resistance zone or manages to break on the upside indicating bullishness towards 4.90. Watch price action near 4.50/60.
FOREX
Dollar Index continues to trade higher taking along Dollar Yen to levels above 115. A rise in the index to 98 is possible while it sustains above 96.50 as Dollar Yen can also target 118 in the longer run on a sustained rise above 116. Euro if falls back below 1.12 can sustain lower to fall towards 1.11/10 soon. EURJPY can trade between 130-128 before breaking on either side. Pound and Aussie can see a short corrective bounce but is overall bearish in the medium term. USDCNY can trade within 6.37-6.40/42 while USDINR can trade within 74.20-74.60/70.
Dollar Index (96.758) has risen and continues to sustain above 96.50. The index looks bullish for a rise to 97.50-98 soon before a reversal is seen.
Euro (1.1212) dipped to 1.1186 yesterday but has failed to sustain below 1.12. The current bounce looks short lived and we may not negate a fall back below 1.12 and eventually target 1.11/10 on the downside as Dollar Index heads towards 98.
EURJPY (129.36) is holding well above support at 128. As mentioned yesterday, we need to watch price action near 130 to see if it manages to break above 130 or fall back to 129-128 again in the medium term. For now while below 130, we expect a ranged move within 130-128.
Aussie (0.7201) trades near 0.72 and if it manages to break and sustain, it can fall further towards 0.71/0.70 in the medium term. Watch price action to see if Aussie bounces back from current levels immediately or continues to fall lower.
Pound (1.3345) tested 1.3315 before bouncing from there. A short corrective upmove is possible to 1.34-1.3450 before a fall is again seen in the longer run to 1.33 or lower.
Dollar-Yen (115.37) has risen in line with the rise in Dollar Index. A break above 115.50 would be initially bullish towards 116.0-116.25 before rising higher. Medium term target above 116 would be 118.
USDCNY (6.3884) is likely to continue trade within 6.40/39-6.37 mentioned yesterday. A break above 6.40, if seen can take the pair up to 6.42 else sideways consolidation could continue.
USDINR (74.40) may trade within 74.20-74.60 before breaking on either side to extend towards 74.00 or 74.80. a fall to 74 is more likely. Watch price action while ranged within 74.20-74.60/70.
INTEREST RATES
The US Treasury yields have risen at the near-end while the far-end had dipped yesterday after a strong Personal Consumption Expenditure release yesterday. The US PCE rose 5% (YoY) in October. The resistances on the far-end yields are holding well for now and need to see if we get a further dip in the coming days from here to keep our broader range of trade intact. The German yields remain higher and stable. A further rise from here will negate our earlier view of seeing a fall back. The 5Yr and 10Yr GoI can continue to consolidate sideways for some more time before seeing a fresh fall.
The US 2Yr (0.64%) and the 5Yr (1.34%) Treasury yields have risen while the 10Yr (1.63%) and the 30Yr (1.96%) have dipped slightly. The 1.65%-1.68% resistance is holding well for now. It will have to be seen if the 10Yr can dip below 1.6% and fall to 1.5%-1.45% from here. The 30Yr on the other hand has failed to break 2% and can dip to 1.9% while below 2%. Overall, our view of seeing a broad range of 1.45%-1.65% (narrow) / 1.35%-1.75% (broad) on the 10Yr and 1.75%-2.1%/2.2% on the 30Yr remains intact.
The German 2Yr (-0.76%), 5Yr (-0.56%), 10Yr (-0.23%) and 30Yr (0.11%) yields sustain higher and stable. As mentioned yesterday, a rise past -0.2% (10Yr) and 0.10% (30Yr) will negate our bearish view of seeing a fall back to -0.45% and -0.5% (10Yr) and -0.1% and -0.2% (30Yr). In turn it will take the yields up to -0.1% (10Yr) and 0.2% (30Yr). That in turn will then negate our earlier bearish view of seeing.
The resistance at 6.38% on the Indian 10Yr GoI (6.3678%) continues to hold well to keep the narrow 6.3%-6.38% range intact. While below 6.38%, a dip to 6.34% and lower is possible in the near-term. We expect 6.3%-6.45% as the broader range of trade (in case if 6.38% is broken). But the bias remains bearish to break 6.3% and a fall to 6.2% eventually over the medium-term.
The 5Yr GoI (5.6967%) remains stable and keeps intact the broader 5.66%-5.75%/5.78 range. We expect the 5Yr to break this range on the downside below 5.66% eventually and fall to 5.63%-5.62%.
