STOCKS
Equities seems to be waiting to see the outcome of the Fed meeting tomorrow before making a sharp move. Broadly, the Dow and DAX remains bullish. Nikkei is struggling to rise past a key resistance which is turning the bias bearish. Shanghai continues to trade sideways. Sensex and Nifty have broken their range on the downside as expected and has turned bearish.
Dow (26112.53, +22.92, +0.09%) remains stuck between the support at 26000 and resistance at 26250. Our bias continues to remain bullish to see a break above 26250 and a rise to 26500-26600 in the coming days. 25750 is the next key support below 26000.
DAX (12085.82, -10.58, -0.09%) is stuck around 12100. The view remains the same. An intermediate dip to 12000 is possible before we the uptrend resumes targeting 12300.
Nikkei (21046.85, -77.15, -0.37%) seems to lack strength to rise past 21250 and looks vulnerable to break 21000 and fall to 20750 and 20500.
Shanghai (2881.78, -5.84, -0.20%) is falling as expected towards 2850 within its 2835-2950 sideways range. We expect the range to remain intact for some more time. As such the index can bounce after testing the 2850-2835 support zone in the coming sessions.
As expected, Sensex (38960.79, -491.28, -1.25%) and Nifty (11672.15, -151.15, -1.28%) have broken their range below 39300 and 11800. The outlook is bearish. Sensex can now test 38500-38000 while the Nifty can fall to 11600.
COMMODITIES
Gold and Silver can consolidate in a broad range ahead of the Fed meeting outcome tomorrow. Copper retains its sideways range. Oil continues to consolidate within its broader downtrend and has dipped within its sideways consolidation.
Gold (1341) has bounced from 1333 and can rise to 1350-1355 on a break above 1345. We expect it to remain volatile in the broad 1320-1360 range ahead of the Fed meeting outcome tomorrow. While below 1360 our bias is bearish to see a fall to 1300 and even lower levels – may be post fed meeting.
Silver (14.85) has series of resistances at 14.90 and then in the 15.00-15.10 region which can cap the upside. While below 15.10, our bearish outlook will remain intact for a fall to 14.5 and 14.25.
Copper (2.65) continues to oscillate between 2.60 and 2.68 and can retain this sideways move for some more time. Our bias continues to remain bearish to see a break below 2.60 targeting 2.58 and 2.55 on the downside.
Brent (60.92) has failed breach 62 decisively. It can consolidate between 59.5 and 64 for some time before the overall downtrend resumes. Within this sideways consolidation, a dip to 60 and 59.5 is likely in the coming sessions.
WTI (51.87) can dip to 51-50.5 in the near term within its 50.5-55 range. The broader bearish outlook remains intact to see an eventual break below 50.5 and fall to 48-45.
FOREX
Dollar remains stable and can seen an intermediate dip before moving higher again. The Euro and Euro-Yen have key resistances ahead which has to be breached to regain bullish momentum. Dollar-Yen, Aussie and Pound are bearish and can fall in the coming sessions. Dollar-Rupee remains bullish is likely to test 70.05 and 70.15 after which a pull-back move is possible.
Dollar Index (97.50) oscillates around 97.50. The outlook remains bullish. But an intermediate dip to 97.30-97.25 looks likely before our preferred rise to 97.80 (initially) and 98.25-98.45 (eventually) happens.
Euro (1.1227) sustains above 1.12. While above 1.12, a rise to 1.1260-1.1270 is possible in the coming sessions. A strong rise past 1.1270 is needed to bring back the bullish momentum and also to avoid the threat of falling below 1.12.
Dollar-Yen (108.49) has come-off from its high of 108.72. The broader bearish view remains intact for a test of 108 and 107. A break below the immediate support level of 108.40 can accelerate the fall to 108.20 and 108 in the near term.
Euro-Yen (121.85) has to rise past 122.25 to regain strength and rise to 123-124 levels again. While below 122.5, the near-term outlook is bearish to see a fall to 121.
Aussie (0.6845) has dipped below 0.6850 and keeps our bearish view intact for a test of 0.6830-0.6800.
Pound (1.2536) has declined further below the second key support level of 1.2550 and confirms the resumption of the overall downtrend. While below 1.2600, the outlook is bearish to test 1.2500 in the near term and a subsequent break below 1.2500 can target 1.2400 over the short term.
USDCNY (6.9228) has been inching slowly higher as expected. While above 9.20, our bullish outlook is intact to test 6.93 and 6.94 in the coming days. As being mentioned here over the last few days, the broader bias is bullish to see an eventual break above 6.94 and a fresh rally to 6.98 and 7.0 over the medium term.
As expected, USDINR (69.9050) has bounced after an intermediate dip to 69.75 yesterday. The near-term view is positive to test 70.05 and 70.15 after which a pull-back move to 69.80-69.75 is possible.
INTEREST RATES
Bond market is waiting to see the outcome of the Fed meeting tomorrow which could set the trend. The US yields have started to move down again indicating that the broader downtrend is intact. It will have to be seen if the Fed’s decision can accelerate this fall.
The US yields have dipped again thereby negating the chances of an intermediate bounce mentioned yesterday. The broader downtrend is likely to remain intact. While below 2.60%, the 30Yr (2.57%) can fall to 2.52%-2.50%. The 10Yr (2.08%) can test 2.0% while below 2.10% and 5Yr (1.84%) can fall to 1.80%.
The 30Yr (0.34%) and 10Yr (-0.25%) German yields have bounced slightly while the 5Yr (-0.61%) remains stable. The German yields seems to be consolidating within their overall downtrend. The near-term outlook is unclear as there is equal chances for either a rise or a fall from current levels.
The 10Yr GOI (7.0681%) has an immediate support 7.05% and resistance at 7.10%. The bias is bearish for it to break 7.05% and fall to 7.00% and 6.95% in the short term..
