STOCKS
Equities broadly remains bullish as the increased optimism on the US-China trade deal keeps the sentiment positive. Dow, DAX and Nikkei can rise further in the coming sessions. But the Indian indices, the Sensex and the Nifty 50 look weaker than its peers and are vulnerable for a fall in the near term.
Dow (26,384.63, +166.50, +0.64%) has breached the key resistance level of 26250 and looks to be gearing up to test 27000 and 27200.
DAX (11988.01, +33.61, +0.28%) remains bullish and can test 12100 and 12200 in the near term. The region around 12200 is a key resistance and a corrective fall from there to 12000 and 11800 cannot be ruled out.
Nikkei (21781.55, +56.60, +0.26%) inching higher towards 21900-22000 as expected. Inability to breach 22000 can trigger a fall to 21500 again. But a strong break above 22000 will pave way for a test of 22600 or even higher levels.
Sensex (36684.72, -192.40, -0.49%) and Nifty 50 (11598, -45.95, -0.39%) fell yesterday as expected. While Sensex trades below 36850,a fall to 36500 and 36350 is possible. Nifty can fall to 11450-11420 while it remains below 11650.
Shanghai (3246.57, +30.28, +0.94%) is closed today on account of a public holiday.
COMMODITIES
Commodities like gold, silver and copper may broadly trade sideways for some time before we get a clear cue on the next move. Oil can dip in the near term before resuming its uptrend.
Gold (1290) and Silver (15.12) keeps our view intact for a sideways between 1280-1305 and 15.0-15.2 respectively. The outcome of the US non-farm payroll could be a possible trigger for gold and silver to break this range and set the direction of the next move.
Copper (2.92) has been oscillating between 2.90 and 2.95. If it sustains above 2.90, a bounce-back to 2.95 and 2.97 is possible again. But, a break below 2.90 can trigger a fresh fall to 2.85. Copper has to breach 2.97 decisively to resume its overall uptrend to 3.0 and higher levels.
WTI (62.1) seems to lack strong follow-through buyers above 62. The 200-day moving average support at 61.40 can be tested in the near term. A strong bounce from there can take WTI higher to 63.5 and 64. But a break below 61.4 can drag the prices to 60.35.
Brent (69.17) is struggling to breach 70. As mentioned yesterday, a dip to 68 is possible while below 70. A key support is at 67.80 – the 21-day moving average. A break below it will see Brent extending its downmove to 67 and 66.8 thereafter. A decisive break above 70 is needed to take the prices higher to 72.
FOREX
Dollar-Index (97.29) has bounced from 97 and if the bounce continues, it could test 97.50 on the upside. The index could remain stable today. Preference is for a fall towards 96.75 with extension towards 95.75 in the medium term.
Euro (1.1225) could possibly test 1.1250-1.1280 before coming off from there. Scope of testing lower levels of 1.11 is still on the cards for the longer run.
Euro-Yen (125.40) is slowly rising. Trading near our expected 125.40, it could move up gradually to test 126.0-126.8 levels on the upside. Near term looks bullish.
Dollar Yen (111.72) is almost stable near levels seen yesterday. As mentioned yesterday, 111.5-112.0 is a near term resistance above current levels and while that holds, the pair could see a corrective fall from there. On a break above 112, we could consider a rise towards 112.50-113.00 in the medium term.
Aussie (0.7123) is stuck below 0.715 resistance and could probably see sideways movement in the 0.715-0.705 region for a few sessions before moving sharply on either side. While 0.7150 holds strong, it could even push Aussie to levels below 0.705, targeting 0.6950 in the medium term.
Pound (1.3079) is holding below immediate daily trend resistance at 1.32 and while that holds, Pound could fall towards 1.3050-1.3000 in the near term. View is bearish.
USDCNY (6.7166) is likely to remain below 7.73 and could fall towards 6.70 or lower in the coming sessions.
Dollar-Rupee (69.17) could dip towards 68.80 today if 69.25 holds just now. On break above 69.25, we would consider the rally to continue towards 69.50/60.
INTEREST RATES
The US Yields continue to move up. The 30Yr (2.94%) is up 1bps and could target 3% in the near term. The 10YR yield (2.53%) has scope of testing 2.58-2.60% in the near term.
The 10Yr GOI (7.5124%) rose sharply yesterday to rise from levels near 7.3415% to 7.5124%. Now if the rise holds, we could see it rise further towards 7.55/60%. But at 7.555 it could face some rejection leading to a corrective fall towards 7.45% again.
The UK-US 10YR (-1.44%) could fall towards -1.50% before bouncing again from there. Immediate view is of a fall from current levels.
