STOCKS
Equities looks mixed. Indices like the Dow, DAX has key supports near current levels which will need a close watch. Sensex and Nifty remains sideways but the bias is slightly negative. Shanghai has declined below a key support and has turned bearish. Nikkei retains its sideways range as of now. The Japanese markets are closed for the next ten days (April 27 to May 6) on account of public holidays.
Dow (26462.08, -134.97, -0.51%) has declined below the support at 26500 which we had expected to hold. A key support is at 26250 which can be tested in the near term and is likely to limit the downside. A bounce from there can take the Dow higher to 26500 and 26700 again.
DAX (12282.60, -30.56, -0.25%) has dipped below 12300. Support is in between 12230 and 12200 which can be tested in the near term. The outlook will turn negative for a fall to 12100 and 12000 if the DAX breaks below 12200. But a bounce from the 12230-12200 support zone can take the index higher to 12400-12450.
Nikkei (22139, -168.58, -0.76%) fell within its 22050-22350 sideways range. It has bounced after making a low of 22068 thereby keeping the sideways move intact. While it sustains above 22050, a bounce to 22275-22300 is possible. A break below 22050 will drag the index lower to 21900.
Shanghai (3102.51, -21.32, -0.68%) has broken the 3150-3280 range on the downside. A double-top on the chart has now turned the outlook negative for the index to test 3050-3020 on the downside. A break below 3100 will trigger this fall.
Sensex (38730.86, -323.82, -0.83%) failed to sustain higher and has come-off sharply from its high of 39292.22 yesterday. The daily candles still keep the possibilities alive for a sideways move between 38500 and 39500. But on the 3-day candles the Sensex looks vulnerable to break 38500 and fall to 38100 in the coming days.
Nifty (11641.80, -84.35, -0.72%) has come-off sharply after testing the resistance at 11800. A dip to 11600 and 11550 looks likely. A break below 11550 will be bearish for a fall to 11450 and. 11400
COMMODITIES
Gold is witnessing short-covering bounce. It may consolidate sideways or can move further higher before the downtrend resumes. Copper is turning bearish as it has declined below a key support. It looks vulnerable for a fresh fall. The upmove in oil seems to be losing steam as expected. WTI has declined inline with our expectation and Brent islikely to follow suit.
Gold (1279) bounced to test 1283 as expected yesterday. 1283 is a key resistance. If gold manages to breach this hurdle, the corrective rally can extend to 1292. Else it can fall to 1270 and remain range bound between 1270 and 1283 for some time before falling to 1260.
Silver (14.99) can inch higher to 15.05 and 15.10 while it sustains above 14.90.
Copper (2.87) fell sharply yesterday and has declined below the key support level of 2.88. Inability to bounce from above 2.88 from current levels will be bearish for a fall to 2.84.
WTI (64.85) as mentioned yesterday has fallen to test 64.75. A further dip to test 64.20 looks likely in the coming sessions. A break below 64.2 will increase the likelihood of the fall extending to 63.6
Brent (75.60) spiked to a high of 75.6 and has come-off from there. The crucial resistance around 76 which we have been mentioning over the last few days has been tested now. An intermediate resistance is between 74.70 and 74.80 which can cap the upside now. A fall to 73-72.7 looks likely in the near term.
FOREX
The Dollar Index (98.11) looks bullish on the weekly candles and could test 98.50 in the near term before it could come off from there back to 97.50 or lower. On the weekly candles, 99 is an important resistance. Dollar Index looks bullish for the coming 1-2 weeks as it may test 98.50-99.00 on the upside with some interim dips. US GDP data for Q1 is due today and would be crucial.
The Euro (1.1139) tested 1.1118 yesterday and is trading above 1.11 just now. Note that 1.11 is an immediate support which if holds could pull back Euro towards 1.1175 and higher; else Euro could fall towards 1.1075-1.1055 in the coming sessions. While Dollar Index looks bullish towards 98.50-99.00, Euro has scope of testing 1.1075/50 on the downside.
The Euro-Yen (124.45) is looking bearish. While the Yen remains stable and Euro weakens, Euro-Yen could fall in the near term towards support at 124 from where a bounce is possible.
Dollar-Yen (111.65) could continue trade within 111.5-112.5 just now with scope of possible extension on either side. Unless we get confirmation of a break on either side, it would be difficult to get clarity on further direction that the currency pair might take. On the weekly, there is scope of rising towards 113.
The Aussie (0.7027) has slightly risen and is trading a bit higher today. Although there is room for a fall towards 0.6950, if Aussie bounces back from current level itself, it could start moving up towards 0.71 again.
USDCNY (6.7314) is trading higher as expected. A rise towards 6.74/76 is on the cards.
Dollar-Rupee (70.26) moved up to close at 70.25/26 in line with our expectation. If we see a close today above 70, we could possibly expect the pair to test higher levels of 70.50/60 next week. If 70.25/30 holds today, we could see some interim dip back to 70.10/00. View is bullish for Dollar Rupee in the near term.
INTEREST RATES
The US yields are almost stable. The 2Yr (2.33%), 5Yr (2.33%), 10Yr (2.54%) and 30Yr (2.95%) are stable but could fall in the near term as the yields have tested important near term resistances which are likely to hold.
The US-JGB 10YR (2.57%) looks bearish for the near term. We will have to see if Dollar Yen falls as the spread moves lower. Directionally the spread is likely to move in line with the broad direction of Dollar-Yen.
The 10Yr GOI (7.5649%) is in the middle of the 7.50-7.65% range. Movement on either side looks possible just now.
