STOCKS
Dow and DAX have to breach their near-term resistances to regain bullishness. Else they can see a dip in the near-term. Shanghai has surged and is coming closer to a crucial long-term resistance which will need a close watch in the coming days. Nifty and Sensex can consolidate sideways.
Dow (28538.44, +76.30, +0.27%) has bounced back above 28500 again on Tuesday and needs to be seen if it can sustain it. Inability to sustain above 28500 will keep the index vulnerable to test 28200-28100 on the downside. Also a strong rise past 28650 will be needed to regain momentum.
DAX (13249.01, -88.1, -0.66%) can fall to 13100-13000 on a break below 13200. The index needs to breach 13400 decisively in order to become bullish. While below 13400 it can consolidate between 13000 and 13400 for some more time.
Nikkei (23656.62, -181.1, -0.76%) is closed for the rest of the week.
Shanghai (3092.43, +42.30, +1.39%) has surged breaking above 3050. An important resistance is in the 3100-3120 region which will need a close watch now. If Shanghai manages to breach 3120 it will be very bullish. But a pull-back from the 3100-3120 resistance zone can drag it to 3050 again. We will have to wait and watch.
Nifty (12255.85, +10.05, +0.08%) and Sensex (41558, -17.14, -0.04%) were stuck in a narrow range yesterday. We expect them to consolidate between 12100-12300 (Nifty) and 41100-41800 (Sensex) for the rest of the week.
COMMODITIES
Crude continues to trade weak and has room to fall further. Gold and Silver remains bullish and can rise further in the coming days. Copper has bounced but has a strong resistance that can cap the upside and drag it lower again.
Brent (66.20) remains lower and can fall to 65 and even on a break below its immediate support level of 65.60. Resistances are at 66.7 and 67.
Nymex WTI (61.30) on the other hand has a key resistance near current levels at 61.40. The outlook is bearish to test 60. A break below 60.80 can accelerate the fall.
Gold (1519) remains higher and bullish. It can test 1535 in the near-term. A break above 1535 will then pave way for 1565.
Silver (17.85) is struggling to see a sustained break above 18. However, it has strong supports at 17.75 and 17.50 which can limit the downside. While above these supports, the outlook is bullish to see a rise to 18.5-19 in the coming weeks.
Copper (2.82) has bounced. However it has strong resistance in the 2.8250-2.83 region which has to be broken in order to turn the outlook positive. While below 2.83, we retain our bearish view. A fall to 2.77-2.76 is likely while the resistance at 2.83 holds.
FOREX
Dollar looks weak. Euro has a crucial resistance ahead which if broken can pave way for further rise. Dollar-Yen dip in the near-term before bouncing back again. Aussie and Pound are bullish. USDCNY has bounced from a key support zone and can move higher in the near term. Dollar-Rupee is stuck in a narrow range. The pair is likely to break this range on the upside and move higher in the coming days.
Dollar Index (96.44) remains lower and looks vulnerable to test 96 on the downside. Resistance is at 96.75 which can cap the upside in the near term.
Euro (1.1223) has an important resistance in the 1.1240-1.1250 region. A strong rise past 1.1250 will pave way for a further rise to 1.13 and even 1.14 in the coming weeks. We will have to wait and watch closely the resistance level of 1.1250.
Dollar-Yen (108.66) can test 108.40 while it remains below 108.75. A further break below 108.4 can drag it to 108. As mentioned earlier we would not look for a fall below 108 at the moment.
EUR-JPY (121.95) has support in the 121.70-121.50 region which is likely to hold and limit the downside. While above 121.5 the outlook is bullish to see a rise to 123-123.2 in the coming days.
Pound (1.3258) has surged above 1.32 and remains bullish. A further rise to 1.3350-1.3400 is possible while it sustains above 1.32 in the coming days.
Aussie (0.7014) sustains higher and has room to test 0.7080 while it holds above 0.70. As mentioned earlier, 0.7080 is a crucial resistance which will need a close watch. A strong rise past 0.7080 is needed to gain further bullishness.
As expected USDCNY (6.9719) has bounced-back from the 6.96-6.95 support zone. A test of 6.98 and even 7 is possible in the coming days.
Dollar-Rupee (71.2275) continues to oscillate between 71.18 and 71.40. We expect the pair to breach 71.40 and rise to 71.50 / 71.65-71.70 in the coming weeks.
INTEREST RATES
The US Treasury yields are trying to bounce at the far end (10Yr and 30Yr) and need to see if they can sustain it. However, the key resistances poised at higher levels can cap the upside and drag them lower again. The German yields continue to remain bullish and can move higher in the coming days. The 10Yr GoI has strong support near current levels which can cap the downside and take it back higher again.
The US 2Yr (1.57%) and 5Yr (1.69%) Treasury yields remains lower while the 10Yr (1.92%) and 30Yr (2.39%) are trying to move up. We will have to wait for a few sessions to see if the 10Yr and 30Yr are managing to hold higher or not. Though some uptick is possible in the near-term, broadly we continue to remain bearish on the 30Yr to see a fall to 2.25% and 2.22% on a break below 2.30% and 10Yr to test 1.75% on a break below 1.85%.
The German 2Yr (-0.62%), 5Yr (-0.48%), 10Yr (-0.19%) and 30Yr (0.34%) yields remain bullish. As we have been mentioning for some time, the 10Yr can test -0.10% and the 30Yr can rise to 0.40% .
The 10Yr GoI (6.5042%) has declined sharply yesterday. However, it has cluster of supports in between 6.50% and 6.45% which can limit the downside. We expect the 10Yr GoI to bounce from this support zone again and target 6.60%-6.65% on the upside.
