STOCKS
Dow continues to trade mixed. Shanghai has dipped below a key level and can test a key support. Nifty and Sensex remains range bound and looks vulnerable for a fall before reversing higher again. Nikkei and DAX remain bullish among the lot and has room to move higher.
Dow (26805.53, -28.42, -0.11%) continues to trade stable and mixed below 27000. The near-term view remains unclear. A strong rise past 27100 is needed to turn the outlook positive. Else a fall to 26500-26400 looks more likely.
DAX (12872.10, +73.91, +0.58%) has risen further and keeps our bullish view intact to test 13000-13200 on the upside. Near-term supports are at 12800 and 12600.
Nikkei (22749.16, -1.44, -0.01%) sustains higher. As mentioned yesterday, Nikkei is bullish to test 23000-23100 in the coming days after which a corrective fall is possible.
Shanghai (2923.91, -17.01, -0.58%) has declined below 2950 and can now test 2900. The level of 2900 is a key support which has to hold to avoid further fall to 2860-2850.
Nifty (11582.60, -21.50, -0.19%) remains below 11700 and keeps the possibilities alive of seeing 11470-11400 on the downside before resuming the uptrend. We reiterate that a strong rise past 11700 is needed to regain strength.
Similarly, Sensex (39020.39, -38.44, -0.10%) has to surpass 39400 to bring back the bullishness. While below 39400 a fall to 38600-38550 cannot be ruled out.
COMMODITIES
Commodity space looks broadly positive in the near term. Gold and Silver has room to inch higher. Oil and Copper can move up to test their key resistances and it has to be seen if they break further above these resistances or not.
Gold (1504) has risen above 1500 thereby negating our preference of testing the lower end of the 1480-1500 range. A test of 1525 looks likely now in the near-term while it sustains above 1495.
Silver (17.85) has risen within its 17.0-18.0 sideways range. A move towards the upper end of the range is likely now. It will have to be seen if Silver manages to break the range above 18 or not.
Copper (2.66) sustains higher and keeps the bullish view intact to test 2.70 and even 2.72 in the short-term.
Brent (61.44) has risen above 61 and can now test 62. While above 61 the outlook is bullish. There is a strong likelihood of it testing 64-65 on the upside on an eventual break above 62.
WTI (56.02) on the other hand can test its crucial resistance level of 57.40. It will have to be seen if it can breach this hurdle or not. A pull-back from 57.40 can drag the price lower to 55-54 again. We will have to wait and watch.
FOREX
Dollar Index has risen but has a crucial resistance which has to be broken to gain bullishness. Dollar-Yen looks bullish. Euro, Pound and Aussie can dip in the near term. USDCNY can rise within its sideways range. Dollar-Rupee can rise further before reversing lower again if it breaks above the immediate resistance level of 71.05.
Dollar Index (97.68) has risen above 97.65 and while it sustains above 97.65, a rise to 98 is possible in the near term. But a strong break above 98 will be required to regain strength. While 98 holds, a fall back to 97 and 96.80 can be seen in the coming sessions.
Euro (1.1103) has come-off sharply from its high of 1.1163 and can test the key support level of 1.1085. This support has to hold in order to keep the chances alive of seeing a rise to 1.12. A break below 1.1085 on the other hand can drag the pair to 1.1045 and 1.1030.
Dollar-Yen (108.67) continues to trade in a narrow range above 108. The bias however continues to remain bullish for the pair to break 109 and rise to 109.50 and 110 while above 108.
The resistance at 121.50 on the EUR-JPY (120.65) continues to hold well. As mentioned yesterday, while below 121.50, the outlook is bearish and the cross can test 120-119 on the downside in the near term.
Pound (1.2838) has come-off failing to sustain the break above 1.29 yesterday. Our bearish view remains intact to test 1.28-1.2750 on the downside.
Aussie (0.6813) has dipped and is heading towards 0.68 in line with our expectation. Resistance will now be at 0.6830. The pair can break 0.68 and extend the fall to 0.6785 and 0.6775 from where an intermediate bounce is possible.
The USDCNY (7.0746) has inched higher. As mentioned yesterday, the pair is likely to trade in the range of 7.04-7.10. Within this range, the possibility looks high of the pair moving higher towards 7.10 in the near term.
Dollar-Rupee (71.0150) has risen and hovers near the key resistance level of 71.05. We may have to allow for a rise to 71.13-71.16 or even 71.25 in case of a strong break above 71.05 which will delay our preferred fall to 70.50-70.35.
INTEREST RATES
The US Treasury yields remain stable and looks mixed in the near term. German yields look vulnerable to seen an intermediate dip within its overall uptrend. The 10Yr (07.26 GS 2029) GOI remains mixed and can be range bound in the near term.
The US 2Yr (1.57%), 5Yr (1.57%), 10Yr (1.75%) and 30Yr (2.25%) Treasury yields continue to trade stable. The near-term outlook is mixed. The 30Yr hovers around the key support level of 2.25%. We will have to wait and see to get a clear cue on whether it is going up to 2.30% or fall to 2.20%. The 10Yr on the other hand can oscillate between 1.70% and 1.80% for some time.
The German 2Yr (-0.68%), 5Yr (-0.64%) and 10Yr (-0.41%) yields have dipped while the 30Yr (0.10%) remained stable. The 10Yr can fall to -0.50% in the near-term if it fails to bounce back above -0.40% and then can resume its uptrend. The 30Yr can test 0% in the near term.
The 10Yr (07.26 GS 2029) GOI (6.6858%) continues to trade mixed and was stuck in narrow range around 6.70% yesterday. The near-term outlook continues to remain unclear and we expect the yield to trade within the range of 6.65% and 6.75%.
The 10Yr (06.45 GS 2029) dipped slightly yesterday to close at 6.5018% as compared to 6.5081% on Wednesday.
