STOCKS
Global equities look mixed while the Indian indices have staged a strong rally yesterday thereby leaving the near-term outlook positive for it. Dow looks vulnerable for a further fall. Nikkei is nearing a key support and has the possibility to bounce back. DAX and Shanghai can consolidate in the near term within their overall uptrend.
Dow Jones (25,806.63, -13.02, -0.05%) seems to lack strength after having bounced from the 21-day moving average support level of 25,635. A near-term consolidation between 25,600 and 26,000 cannot be ruled out. But the overall bias remains negative and while below 26,000, Dow is in a danger to break and fall below 25,605 targeting 25,100-25,000 in the short term.
DAX (11,620.74, +28.08, +0.24%) can consolidate between 11,500 and 11,700 for some time before resuming its uptrend towards 11,800.
Nikkei (21,603.10, -123.18, -0.57%) has fallen further and is heading towards 21,500 as expected. The 100-week moving average is near 21,500 and the 100-day moving average support at 21,427 can limit the downside. A bounce from these supports can take the index higher to 21,950 and 22,000 in the coming days.
Shanghai (3,070.89, +16.64, +0.54%) is consolidating between 3000 and 3100. A breakout on either side of 3000 or 3100 will decide the next move.
Sensex (36,442.54, +378.73, +1.05%) and the Nifty 50 (10,987.45, 123.95, 1.14%) has risen sharply yesterday. Immediate resistances are at 36,480-36,500 for the Sensex and 11,000 for the Nifty 50. A strong break above these resistances will pave way for a test of 36,850-37,000 on the Sensex and 11,100-11,150 on the Nifty.
COMMODITIES
Gold and Silver trades subdued and remains pressured for further dip. Copper has bounced from a key support and can consolidate sideways for some time within its overall uptrend. Oil looks mixed for the near term within is sideways move.
Gold (1287) has bounced slightly after testing its support at 1280. While this support holds, an intermediate bounce to 1300 cannot be ruled out. However, broadly gold is likely to remain under pressure and a test of 1275-1270 cannot be ruled out as long as it trades below 1300.
Silver (15.12) has bounced from the psychological support level of 15. Resistance is at 15.20 which has to be broken for a relief rally to 15.40. But while below 15.2, silver looks vulnerable to break 15 and fall to 14.85.
Copper (2.94) has bounced from the 2.90-2.89 support region and can move up to 2.97-2.98 on a break above 2.95. A sideways consolidation between 2.89 and 2.98 can be seen for some time before the overall uptrend resumes targeting 3.0 and higher levels.
WTI (56) retains its 55-58 sideways range. It seems to be lacking strength to breach 57 decisively. A test of 55 is possible in the near term. A break below the immediate support at 55.75 can trigger this downmove.
Brent (65.35) is stuck between 65 and 66.35 since the beginning of this week. The broader 64-68 sideways range remains intact. Within this range, while below 66, a dip to 64.5 and 64.2 is possible in the coming sessions.
FOREX
Euro looks a little weak while Dollar-Yen may test 112.50 before falling from there. Pound and Aussie have important supports below current levels which may hold for the near term. Indian Rupee looks strong just now. Need to see if Dollar Index holds below 97 or rises higher to test 97.50 in the next few sessions.
Dollar-Index (96.90) has moved up as expected but could face rejection from 97.00-97.50 which could again push back Dollar Index towards 96-95.75 levels.
Euro (1.1297) is also trading lower in line with our expectation and has enough room on the downside towards 1.1250 and then lower towards 1.12. Unless the dollar Index comes off from 97 itself, Euro has scope of falling further in the near term.
Euro-Yen (126.31) has also come off from immediate daily resistance near 127.6 and while that holds, Euro-Yen could dip to test lower levels of 126.00-125.20 soon.
Dollar Yen (111.80) has resistance at 112.5 and even if the pair does not face a sharp rejection from here, it could remain stable and see some range trade in the 112.5-111 region. A fall from current levels is preferred targeting 110-109 in the longer run.
Pound (1.3141) has interim support at 1.31 which if breaks could open up chances of falling towards 1.2950 in the coming sessions. Watch price action near 1.31 which if produces a decent bounce could take Pound back towards 1.32-1.33 levels.
Aussie (0.7038) is heading towards support at 0.70 which could hold and produce a bounce for the near term. Only if 0.70 breaks, we may look at a possible test of 0.69. Note that Aussie is trading near important long term support levels indicating that further downside is limited to 0.69-0.70 with a possible rise to be witnessed soon targeting 0.7150-0.72 and higher again.
USDCNY (6.7149) is seeing narrow trade for the last 3-sessions and could possibly spend some time below 6.72 in a small range. 6.68-6.72 is the trade region for the near term.
Dollar Rupee (70.4950) came off below 70.60 contrary to our expectation of some range trade within 70.60-71.00 boosted by a stronger Nifty. While below 70.60, there is scope of testing support near 70.10/30 which may hold in the first testing pushing the pair back towards 70.50/60.
INTEREST RATES
The US yields are almost stable. The 2Yr (2.554%), 5Yr (2.53%), 10Yr (2.72%) and 30Yr (3.08%) are trading near levels seen yesterday and look bearish for the every near term. As mentioned yesterday, the 10Yr could fall towards 2.69% and 30Yr towards 3.06%. The 5Yr could head towards 2.49%.
The German-Japan 10Yr (0.17%) is coming off from resistance and while it falls further towards 0.16/0.15% Euro-Yen could come off further from current levels. (Refer FOREX section above)
UK 20Yr (1.71%) is coming off from resistance and while that holds the yield could fall to 1.60% again in the coming sessions.
The 10Yr GOI (7.5563%) has been stable. As mentioned yesterday there is support at 7.50/52% levels and while that holds the 10Yr could probably rise towards 7.60% in the near term. Only on a break below 7.50%, we may negate an immediate rise towards 7.60%.
