STOCKS
Dow seems to lack strength as it is struggling to rise past a key near-term resistance. It will have to be seen as how it reacts to the President Trump’s impeachment. DAX and Nikkei looks vulnerable to dip in the near-term before reversing higher again to resume their overall uptrend. Shanghai has a crucial resistance ahead which needs to be broken for it to move further higher. Sensex and Nifty are bullish and can rise further.
Dow (28239.28, -27.88, -0.10%) continues to find resistance near 28330 A strong rise past 28330 is needed now to rise further towards 28400 and 28430. A key near-term support is at 28185 which if broken will drag the index lower to 28000 and even lower in the coming days. We will have to wait and see
DAX (13222.16, -65.67, -0.49%) has dipped further and looks vulnerable to break below the 13200-13180 range. Such a break can drag it lower to 13100 and 13000 levels again.
Nikkei (23856.31, -78.12, -0.33%) has declined sharply below 24000 which will now delay our preferred rise to 24800-25000. As mentioned yesterday a fall to 23650-23600 is possible now from where the index can reverse higher again and resume the uptrend.
Shanghai (3019.68, +2.63, +0.09%) remains below the 3040-3050 resistance region. As mentioned yesterday, a strong rise past 3050 will be needed to gain momentum and rise further to 3100-3110. While below 3050, the index can remain stuck in between 3000 and 3050 for some time.
Nifty (12221.65, +56.65, +0.47%) sustained well above 12100 and has risen past 12200 yesterday. As we have been mentioning for some time, Nifty can now test 12300-12350 in the coming days from where a corrective fall is possible.
Sensex (41558.57, +206.40, +0.50%) has risen further. The bullish view remains intact to test 41800-42000 in the coming days.
COMMODITIES
Commodities are mixed. Crude prices trade higher but we would watch resistance on WTI. Copper, Gold and Silver could remain stable in the near term with some possible upward bias. However, immediate upside could be limited for Gold and Silver.
Brent (66.17) is trying to break above the trend resistance on the daily candles above 66 and could be headed towards 67-68 in the near term. 68 could be the next cap on the upside before a corrective dip is seen back towards 66. Near term looks bullish towards 68 while immediate trade sustains above 66.
Nymex WTI (60.82) is holding below 61.2 just now but if Brent moves up above 66 over the next 1-2 sessions, it could pull up WTI prices too towards 62-63 levels in the near term. Looking at the WTI daily chart, we may watch immediate trend resistance at 61 just now.
Gold (1481.80) could trade in the 1480-1495 region for the next 1-2 sessions before breaking lower towards 1460 while Silver (17.10) could trade within 17.00-17.25 before falling off sharply to levels below 17. View for the next 1-2 session is stable with a possible rise from current levels.
Copper (2.8035) is likely to remain above 2.75 for the next 1-2 sessions.
FOREX
Dollar Index (97.34) could attempt a rise towards 97.75 while above 97. Euro (1.1128) has dipped slightly and if the dollar index continues to rise as expected, we may see a fall in Euro towards 1.11
Dollar-Yen (109.57) is holding well below 110 but at the same time has important support at 109 below current levels. We may expect trade in the 109.63 and 109 for the next couple of sessions.
EUR-JPY (121.93) is almost stable but we may expect upper resistance near 122.78/86 to hold and push prices down towards 121.50-121.00 before bouncing back higher.
Pound (1.3087) has decent support at 1.3048 which if holds may produce a bounce towards 1.32 and higher in the near term. While above 1.30, bullish possibility cannot be negated.
Aussie (0.6871) has very near term trend support near 0.6839 and while that holds we may expect a bounce back towards 0.69 in the next few sessions. However, in the medium term we cannot negate a possible test of 0.68.
USDCNY (7.0018) is likely to trade in the 7.00-7.02 region for the near term. Overall downside limit at 6.96/95 looks potentially strong for now.
Dollar-Rupee (70.98) has immediate and very near term resistance near 71.12 which if holds could possibly push the exchange rate towards 70.90/85. Overall 70.85-71.15 could be the immediate range while a possible extension to 71.25 over the coming sessions looks likely.
INTEREST RATES
The US Treasury yields continue to inch higher towards their key resistances which can cap the upside and reverse them lower again. The German yields remain stable at the near-end while those at the far-end have moved higher. The broader bullish view remains intact to see further rise. The 10Yr GoI has dipped to test 6.70% as expected and can extend the fall to 6.65% on a break below 6.70%.
The US 2Yr (1.62%) and 5Yr (1.71%) Treasury yields remained stable while the 10Yr (1.90%) and 30Yr (2.30%) have inched slightly higher. The 10Yr and 30Yr are at their first key resistance and have another strong resistance coming up at 1.95% and 2.35% respectively. The yields can reverse lower either from current levels itself or after testing 1.95% (10Yr) and 2.35 (30 Yr) in the coming days. In such a scenario the 10Yr can fall to 1.77%-1.75% and the 30Yr can test 2.20% on the downside.
The German 2Yr (-0.65%) and 5Yr (-0.53%) remained stable at the near-end while at the far- end the 10Yr (-0.25%) and 30Yr (0.26%) have moved higher. The 30Yr has risen past 0.22% and need to see if it sustains higher or not. While above 0.22% our bullish view of seeing 0.40% will remain intact. The 10Yr is also moving higher in line with our expectation and can test -0.20% and even -0.10% in the coming days.
As expected, the 10Yr GoI (6.7103%) declined below 6.75% to test 6.70% on the downside yesterday. A fall below 6.70% can drag the yield further lower towards 6.65%.
