STOCKS
Dow has a crucial resistance in the 29000-29050 region which we expect to hold and trigger a corrective fall. DAX has room on the upside to move up while it sustains above 13400. Shanghai can consolidate sideways. Nifty and Sensex have to sustain above their near-term supports in order to keeps the chances alive of moving further higher. Nikkei is closed today.
Dow (28823.77, -133.13, -0.46%) tested 29000 and has come-off from there. As expected the 29000-29050 resistance region is holding well. While this resistance holds, we expect the Dow to fall towards 28500 and even lower in the coming days.
DAX (13483.31, -11.75, -0.09%) has supports at 13450 and 13420. While above these supports the outlook is bullish to see 13600 on the upside after which a corrective dip to 13400 is possible.
Nikkei (23850.57) is closed today.
Shanghai (3082.02, -10.27, -0.33%) can continue to oscillate between its key support at 3035 and crucial resistance at 3125. As mentioned earlier, our bias is bullish while above 3035 and we expect Shanghai to break 3125 and rise to 3300-3400 over the medium-term.
Sensex (41599.72, +147.37, +0.36%) and Nifty (12256.80 +40.90 +0.33%) have closed higher but on a mixed note on Friday. Sensex has support at 41400 and has to breach 41800 in order to move further higher towards 42000-42200. Nifty on the other hand has to sustain above 12155 to keep the chances alive of breaking above 12300 and testing 12350-12380 on the upside.
COMMODITIES
Commodities have immediate supports below current levels and are likely to bounce back in the next few sessions to see a decent rise.
Brent (64.99) is likely to remain above 64 and may attempt a rise back towards 68 in the near term.
Nymex WTI (59.09) has important trend support at 58 and while that holds, it could move up towards 62 again in the near term. Immediate view is bullish while above 58.
Gold (1557.25) has risen slightly. Note immediate support at 1540 and lower at 1520 are likely to hold just now. While above 1540, a rise back towards 1580 cannot be ruled out.
Silver (18.058) has bounced from daily trend support near 17.85 and while that holds, we may expect a bounce back towards 18.50 or higher in the near term.
Copper (2.821) is stuck in a sideways range and has scope to move on either side towards 2.90 or 2.75. We would wait and watch to decide on further direction as chances on either side look equally possible.
FOREX
Overall mixed trade in currencies. Dollar Index may come off a bit while Euro may remain stable below 1.1175. Dollar Yen is to test important resistance and needs to break that on the upside to move higher. Yuan and Rupee has strengthened the most and could have limited downside below current levels.
Dollar Index (97.38) has held below resistance near 97.50 as expected and may now possibly come down towards 97.10 before again attempting a rise.
Euro (1.1124) has room for a fall towards 1.1075 on the downside but a fall in Dollar Index towards 97.10, if seen could keep the Euro stable or take it higher towards 1.1175 on the upside before another dip is seen.
Dollar-Yen (109.61) has moved up to test important resistance at 109.72. A break is needed to move higher towards 110.0-110.5 in the near term. Watch price action near 109.72.
EURJPY (121.96) has risen to test 122 as expected. There is room for a further rise towards 122.50 within the current move. Near term is bullish.
Pound (1.3038) has immediate support near 1.30 and lower near 1.2965 which is likely to hold in the near term and produce a bounce back towards 1.32.
Aussie (0.6912) has immediate resistance near 0.6925-0.6950 while support is seen near 0.6850. Near term is likely to see sideways trade within 0.6850-0.6950 region before moving sharply on either side. In the medium to long term, a break on the upside towards 0.70 or higher looks more likely.
USDCNY (6.8971) has come off sharply breaking below 6.90. There is scope for a fall towards 6.85 before a bounce is seen from there. We may not look for further strength in Yuan beyond 6.85 within the current move.
Dollar-Rupee (70.9475) came down drastically after testing 72+ levels a couple of weeks ago. Now immediate support is seen near 70.75 where we may see buying coming in that could pull back USDINR to levels above 71 again in the near term. Possible RBI intervention could be expected as it has previously bought at levels near 70.50 and 70.70/80 levels.
INTEREST RATES
The US Treasury yields have dipped but have key supports which can limit the downside and take it back higher in the coming days. The German yields sustain higher and keep the broader bullish view intact. The 10Yr GoI has risen on Friday and can gain momentum on a strong rise past 6.60%.
The US 2Yr (1.57%), 5Yr (1.63%), 10Yr (1.82%) and 30Yr (2.28%) Treasury yields have dipped again on Friday. However, the 30Yr has a key support at 2.25% which is expected to trigger a bounce again targeting 2.37%-2.40%. The 10Yr has support at 1.79% and then at 1.75%. While these supports hold, a bounce-back move to 1.90%-1.95% is possible in the coming days.
The German 2Yr (-0.61%), 5Yr (-0.51%), 10Yr (-0.20%) and 30Yr (0.30%) yields sustain higher and keep the bullish view intact. The 30Yr can target 0.40%-0.45% on the upside while the 10Yr can test -0.10 on a strong rise past -0.20%.
The 10Yr GoI (6.5890%) has moved up to test 6.60% on Friday. The bullish outlook is intact and the yield may get support at 6.55% now. A strong break above 6.60% will boost the momentum and will take the 10Yr GoI to 6.70% and 6.75%.
