STOCKS
The upmove in equities seems to have taken a break. Dow and Shanghai look vulnerable for a corrective fall while the DAX and Nikkei are consolidating within the overall uptrend. The Indian benchmark indices, the Sensex and Nifty 50 also remains under pressure and has a crucial support coming up near current levels.
Dow Jones (25,916.00, -69.16, -0.27) has been continuing to move down as expected. As mentioned yesterday, a test 25,750 is possible while the Dow remains below 26,000.
DAX (11,515.64, +28.31, +0.25%) dipped below 11,440 but has bounced-back again. The index seems to be consolidating between 11,400 and 11,550. While above 11,400 a rally to 11,750 and 11,800 cannot be ruled out in the coming days.
Nikkei (21,574.51, +189.35, +0.89%) is oscillating around 21,500. A strong close above 21,500 today will leave the doors open for a test of 21,950-22,000 next week. Key support is at 21,400.
Shanghai (2,945.87, +4.91, +0.17%) continues to trade below 3,000 and remains vulnerable for a corrective dip to 2,900-2,880 in the near term.
Sensex (35,867.44, -37.99, -0.11%) and Nifty 50 (10,792.50, -14.15, -0.13%) continues to trade under pressure. They can dip to test their crucial supports at 35,730 (Sensex) and 10,750 (Nifty). A break below these supports can drag Nifty to 10,680 or 10,620 and the Sensex to 35,435.
COMMODITIES
Gold and Silver has dipped as expected and are coming closer to key supports. A bounce in the coming days is possible while these supports hold. Copper is consolidating within its uptrend. Oil is holding higher and can move up to test a key resistance.
Gold (1314) has come-off from the day’s high around 1327 and is likely to test 1310 as expected. Though a break below 1310 can drag it to 1300, a further fall below 1300 could be difficult as fresh buyers may come in the 1300-1295 region and limit the downside.
Silver (15.60) is trading around the key 15.60-15.5 support zone. A bounce from the 15.5-15.0 region can take silver higher again to 15.8 and 16 in the coming days. A break below 15.5, though less likely, can take the prices lower to 15.4 and 15.3
Copper (2.95) is consolidating between 2.93 and 2.98 over the last few days. A break above 2.98 can test 3.0 and 3.02. On the other hand, a break below 2.93 can trigger a corrective fall to 2.90 and 2.88.
WTI (57.4) has been inching higher as expected to test 57.5-58. A break above 58 can take it to 59 and 59.5. But a pull-back from 58 can drag it to 56 and 55.5
Brent (66.5) remains stable above 66. The near-term outlook remains positive for a test of 67.5-68. As mentioned yesterday, a range-bound move between 64 and 68 can be seen for some time. Within this range, the bias is bullish to see a break and rise above 68 targeting 70 in the coming weeks.
FOREX
Dollar-Index (96.28) is stable but while below 96.30, there is scope for a fall towards 95.50-95.00 in the near term. Else the current bounce if sustains could take it back to re-test 97.0-97.30 levels. There is no directional clarity for the medium term just now while overall broad range of 97-95 is likely to hold for some more time.
Euro (1.1366) tested 1.1420 yesterday before coming off from there. While the resistance holds, Euro could dip back towards 1.1320/00 in the near term. Looking at the weekly candles there is room on the downside towards 1.11. Could this indicate a rise in Dollar Index towards 97 or higher? Probably.
Euro-Yen (126.97) has moved up as expected and is testing resistance at 127. There are two important resistances above current levels one at 127 and the other at higher levels of 127.60. This seems likely to hold in the near term with a possible corrective dip to 126-125 levels in the medium term.
Dollar Yen (110.86) has taken support from the 21-day MA near 110.35 and since has been moving up for the past 3-sessions. Important resistances are coming up at 112.0-112.5-113.0 levels. We expect 112 to hold on first testing before a rise towards 112.5-113.0 is seen in the longer term.
Pound (1.3258) has come off from 1.335 and could head towards support at 1.32 from where a bounce back to 1.35/1.36 is possible as seen on the weekly charts.
Aussie (0.7089) is trading at crucial levels just now and unless a bounce from here itself is seen, it would be vulnerable to a fall towards 0.70-0.6950.
USDCNY (6.6958) has risen from immediate support just below 6.68. There is room on the upside towards 6.72/74 for the near term. A fall below 6.68 if seen again would take it down to 6.65.
Dollar Rupee (70.73) came down sharply yesterday but this could be news driven (that Pakistan will return the Indian wing commander today, calling for peace). We need to see if the fall sustains below 70.60 today. Only if the fall sustains can we look at a possible test of lower levels targeting 70.20. Else we could see a bounce back towards 70.80-71.00 today which could shift the earlier 71.50-70.80 range to 70.60-71.25 now. We would keep a close watch on the movement today and next week.
INTEREST RATES
The US yields have risen well. The 2Yr (2.51%), 5Yr (2.52%), 10Yr (2.72%) and 30Yr (3.08%) are up from 2.48%, 2.47%, 2.67% and 3.05% respectively. The rise came in after the US Q4 GDP came out at 2.6%. The rise in the 30YR could be limited to 3.10% while the 10Yr could face rejection from 2.73% or higher from 2.80% levels.
The US-JGB 10Yr (2.74%) has risen sharply and could rise further to test 2.78%. This could pull up Dollar-Yen in the near term.
The UK-US 10YR (-1.55%) is coming off from -1.53%. An initial dip towards -1.58% is possible before rising back towards -1.50%.
The German-US 10YR (-2.54%) is trading along important near term support and could move up in the near term towards -2.49%. Failure to bounce back from current support could take it higher to -2.58%.
The 10Yr GOI (7.5907%) almost tested 7.70% before coming off from there. While we expect 7.55% to hold on the downside, we could see another attempt of rising towards 7.65% in the near term.
