STOCKS
Equities continue to remain positive. Though the Dow has dipped, the supports can limit the downside and push it higher again. DAX has risen past a key resistance and can rise further. Nikkei and Shanghai also looks bullish to extend its upmove in the near term. On the contrary, India’s Sensex and Nifty seems to lack strength and likely to remain in a sideways range.
The resistance at 26250 on the Dow (26048.41, -14.17, -0.05%) is holding as expected for now. However, the key supports at 26000 and 25750, which can be tested in the near term, can limit the downside and keep the bullish outlook intact for a test of 26500-26600.
As against our expectation, DAX (12155.81, +110.43, 0.92%) has risen breaking above 12100 and has turned the near-term view bullish. While above 12100, DAX can now move up to 12300 in the coming sessions.
Nikkei (21210.94, +6.66, +0.03%) has risen past 21200 as expected. While above 21000, the outlook is bullish to test 21500 and 21750 in the coming days. A break above 21250 can accelerate the rally.
Shanghai (2919.35, -6.36, -0.22%) has dipped slightly after witnessing a sharp rally yesterday. A test of 2950 – the upper end of the 2835-2950 is likely now. If it continues to sustain above 2900 in the coming days, the possibility of see an upside breakout above 2950 is high going forward which will then pave way for a test of 3000.
Sensex (39950.46, +165.94, +0.42%) and Nifty (11965.60, +42.90, +0.36%) have been inching higher, but at a slower pace signaling lack of strength. The indices can remain range bound for some time. Nifty can trade in the 11800-12200 while the Sensex can remain range bound between 39300 and 40300.
COMMODITIES
Gold and copper can dip in the near term while silver can trade sideways before a fresh fall. Brent and WTI have declined below their intermediate support and are signaling the resumption of the broader downtrend.
Gold (1326.40) fell to test 1320 as expected yesterday and has bounced from there. The near-term view remains negative for a fall to 1315-1310. A break below 1320 can accelerate the downmove.
The support at 15.6 on Silver (14.69) is holding as of now. Silver may consolidate between 14.6 and 14.8 before testing 14.5-14.4 on the downside. While below 15, the broader bearish view is intact to test 14.25-14 over the medium term.
Copper (2.67) spiked to 2.70 and has come-off from there. While below 2.70, the near-term view is negative to test 2.62-2.60 on the downside. A strong rise past 2.70 will prove our bearish view wrong which will then pave way for 2.75-2.77 on the upside.
Brent (61.54) has declined below 62 and is signaling the resumption of the downtrend. It can test 60 again and eventually fall to 57 and 55 in line with our long-term bearish view.
WTI (52.55) can fall to 51 and 50 in the near term. The long-term bearish outlook is intact to test 45 on the downside.
FOREX
Currencies signal a near-term weakness in the dollar. The Euro and Euro-Yen are bullish while the Dollar-Yen is bearish. The Dollar Index looks vulnerable to break 96.5 and fall to 95.8 in the coming days. Aussie holding above a key support, but looks vulnerable to break below it. Pound can continue to trade sideways.
Dollar Index (96.69) is consolidating between 96.5 and 97 as expected. While below 97, the outlook is bearish for the index to break 96.5 and fall to 95.8
Euro (1.1312) is holding well above 1.13 and is bullish in the near term to test the crucial resistance level of 1.1370. A strong rise past 1.1370 could boost the momentum for a further rise. But while 1.1370 holds, a corrective dip to 1.1300-1.1270 is possible.
Euro-Yen (122.85) has been inching higher consistently over the last few days. The uptrend is intact to test of 124. Support is at 122.
The corrective bounce in the Dollar-Yen (108.49) seems to be losing steam indicating that the resistance in the 109-109.50 region could be holding well.. While the 109-109.5 resistance region holds, we could see the pair break below 108 and fall to 107.
Aussie (0.6956) looks vulnerable to break below key support level of 0.6950 which can take it lower to 0.6935 and 0.6900 and would negate the possibility of seeing a rise to 0.7000.
Pound (1.2719) retains its 1.2650-1.2750 sideways range. The bias remains positive within this range to seen an upside break above 1.2750 and a rally to 1.2800-1.2850 in the coming days.
The support at 6.90 on USDCNY (6.9147) is holding well. While above this support the outlook will be bullish and a revisit of 6.93 levels is possible in the coming days.
The resistance in the 69.60-69.65 region is holding well on the USDINR (69.4450). While below 69.65 the chances of seeing 70.00-70.10 on the upside is less and a dip to 69.25-69.20 is possible.
INTEREST RATES
The US yields have dipped yesterday. However, the near-term view remains positive for rise before we see the resumption of the broader downtrend. The 30Yr (2.61%) has support at 2.60% and can test 2.70% in the coming days. Similarly, the 10Yr (2.14%) and 5Yr (1.91%) yields have support at 2.10% and 1.90%. The 10Yr can rise to 2.20% and the 5Yr can test 1.95% on the upside.
The German yields remains stable above their key supports. The short-term view is positive. The 30Yr (0.38%) can rise to 0.50% while the 10Yr (-0.23%) and 5Yr (-0.59%) yields can test -0.10% and -0.50% respectively on the upside.
The 10YR GOI (7.1798%) has come-off sharply after testing the resistance at 7.24%. It can dip to 7.10 which in turn can pull the Dollar-Rupee lower..
