STOCKS
Dow seems to lack follow-through buying and hold on to its Friday’s gains and has room to dip again while it sustains below 28000. Broadly, the major indices like the Dow, DAX and Nikeei can consolidate in the near-term. DAX looks relatively weaker among the lot to see a slightly deeper fall. Shanghai could come under pressure if it fails to sustain above 2900. Though Sensex and Nifty are holding above their near-term supports, looks weak and vulnerable to fall further going forward.
Dow (27909.60, -105.46, -0.38%) seems to lack strong follow-through buying above 28000. While below 28000 a dip to 27650 looks possible again in the coming days. A strong break and close above 28000 will be needed to strengthen the case for a rise to 28250. Broadly, we may expect the Dow to be range bound between 27600 and 28000 for some time.
DAX (13105.61, -60.97, -0.46%) is struggling to gain strength to breach 13200. As mentioned yesterday, though the index is managing to sustain above 13000, as long as it remains below 12300, it is vulnerable to see a fall to 12800-12700 in the coming days.
Nikkei (23410.30, -20.40, -0.09%) has come-off from its high of 23544.31 yesterday. As expected the 23000-23600 range remains intact. The index can continue to consolidate in this range for some more time before breaking above 23600 to target 24000 on the upside.
Shanghai (2908.19, -6.29, -0.22%) continues to hover above 2900 and seems to lack momentum to see a strong move above 2910. Shanghai has to sustain above 2900 in order to avoid a fresh fall to 2885-2880 and lower levels and also to keep the chances alive of seeing 2970-2980 on the upside.
Sensex (40487.43, +42.28 +0.10%) and Nifty (11937.50, +16.00, +0.13%) were stuck in a narrow range yesterday indicating indecisiveness in the market. Though the indices might consolidate sideways for some time the bias is inclined towards bearishness. As such we expect the Nifty to fall in the coming weeks towards 11800-11700 while it remains below 12050. Sensex on the other hand is vulnerable to test 40250-41000 while it remains below 40750.
COMMODITIES
Brent (64.17) is trading stable near levels seen yesterday while WTI (58.86) has dipped a bit. We continue to look at resistances near 65.0-65.50 on Brent and 60-61 on WTI from where a rejection is expected in the near term. Unless a sharp and sustained rise above the mentioned resistances is seen (less likely just now), we may look for a fall in Crude prices from current levels.
Gold (1465.60) seems to be holding above 1460 just now which has been an interim support since the last few weeks. Gold price is finding difficulty in breaking below 1460 just now and while that holds, we may expect trade in the 1460-1500 region. However, we allow for a possible test of lower support near 1440 for the medium term on a possible break below 1460.
Silver (16.66) is trading above immediate support near 16.5-16.0 and while that holds, we may expect a bounce towards 17+ levels soon.
Copper (2.7530) is trading at resistance on the daily candles and looks likely to rise from here. Unless an immediate fall is seen from current levels, Copper could target 2.85-3.00 on the upside.
FOREX
Dollar Index (97.61) has crucial support near 97.0-97.1 which has the potential to push the index higher towards 98.00 again in the medium term. For the next few sessions we may possibly see a slight fall in the index towards 97.50 or lower.
Euro (1.1069) has been trading higher after a test of 1.1040 on Friday last week. Resistance near 1.11 looks strong just now and is likely to hold eventually pushing Euro down towards 1.10.
Dollar-Yen (108.62) is stable in the 108-109 region and could continue to trade sideways for now.
EUR-JPY (120.25) has bounced from 120 instead of heading lower towards 119.50 as we had mentioned in yesterday’s edition. Narrow trade in the 121-120 region looks possible for a few sessions.
Pound (1.3154) has resistance at 1.32 and 1.34 respectively and could face rejection from either of these levels in the near term which could push the Pound back towards 1.28.
Aussie (0.68321) continues to trade sideways below resistance near 0.6876 and while that holds, Aussie is likely to fall towards 0.6750 in the near term.
USDCNY (7.0384) is trading lower but while above 7.02, we cannot negate a rise again towards 7.06.
Dollar-Rupee (71.0450) closed near important support at 71. Note that we may expect a bounce from 71.00-70.90 in the near term. View is bullish while the mentioned supports hold.
INTEREST RATES
The US Treasury yields have dipped slightly and could remains sideways until the outcome of the US Federal Reserve meeting tomorrow. The German Yields broadly remains bullish but could consolidate in the near-term before seeing a fresh rally. The 10Yr GoI can dip and trade sideways in the near-term before moving further higher.
The US 2Yr (1.62%), 5Yr (1.66%), 10Yr (1.82%) and 30Yr (2.25%) Treasury yields have dipped slightly across tenors. The intermediate resistance at 2.30% on the 30Yr and 1.85% on the 10Yr is holding well which in turn is delaying our preferred rise. The yields could trade in a sideways range of 1.75%-1.85% (10Yr ) and 2.15%-2.30% (30Yr) ahead of the US Federal Reserve meeting tomorrow.
The German 2Yr (-0.65%), 5Yr (-0.57%) and 10Yr (-0.31%) yields have dipped while the 30Yr (0.21%) continues to inch higher. The 2Yr has room to test -0.68% and -0.70% after which a bounce is possible. The 10Yr has supports in the broad -0.30% and -0.40% region while above which the outlook is bullish to see a rise to -0.20% and -0.10% in the coming weeks. The 30Yr can gain momentum on a strong break above 0.22% and target 0.35% and even 0.40%.
The 10YR GOI (6.6650%) has come-off from the high of 6.6957% yesterday. %. While below 6.70%, an intermediate dip to 6.62% is possible. The yield could consolidate between 6.62% and 6.70% for some time before we see a break and rise above 6.60% towards 6.80% eventually in the coming weeks.
