STOCKS
Equities are showing sign of relief in increasing hopes of the corona virus spread getting stabilized. Dow is holding well above 21000 and has room to rise further. DAX and Nikkei have to break their range resistances in order to gain strength and move higher. Shanghai is bullish. Senex and Nifty have closed on a weak note last week and need to see if they can take cues from the global markets and bounce or not.
The crucial support level of 21000 on the Dow (22679.99, +1627.46, +7.73%) that we had been mentioning for some time is holding well. The chances of a rise to 24200-24500 that we had mentioned last week is increasing now as the Dow are holding well above 21000. A strong rise past 23000 will now accelerate the upmove.
DAX (10075.17, +549.40, +5.77%) has risen within its 9500-10150 range and has come closer to the upper end of the range. The bias is bullish to seen an upside breakout of this range above 10150. Such a break can take the index higher to 10400-10500 in the short-term.
Nikkei (18760.89, +184.59, +0.99%) has risen back above 18500 thereby reducing the chances of seeing a fall to 17000-16500 that we had mentioned last week. However, a strong rise past 19500 is needed to turn the outlook bullish to test 20300-20500. While below 19500, Nikkei can remain in a sideways range of 17500-19500 for some time.
Shanghai (2808.18, +44.20, +1.60%) has risen above 2800 and is keeping our bullish view intact. A strong close above 2815 today will pave way for a test of 2870 initially. It will also increase the chances of revisiting 3000-3100 levels eventually.
Nifty (8083.80, -170, -2.06%) and Sensex (27590.95, -674.36, -2.39%) Nifty has to sustain above 8000 in order to avoid a further fall to 7700-7500. Similarly, Sensex has to remain above 27000 to avoid a fall to 26000. We will have to wait and see if the Indian indices can bounce today taking cues from the global markets.
COMMODITIES
Concerns over global economy continue to pour into the safe haven assets as Gold and Silver continue to rise. Crude prices too trade higher as prices seem to be in a corrective mode just now. But watch mentioned resistances above current levels. Copper has risen too but could be headed towards resistance in the near term.
Brent (33.92) and Nymex WTI (27.02) are trading higher. Brent could test $37.50-40 and WTI could test $32-35 which could act as immediate resistance zone above current levels. While we may expect a short dip from the mentioned levels, a break on the upside would take the prices much higher. For now, watch out for a test of above mentioned levels.
Gold (1713.80) has held well above support near 1580 and has risen sharply above 1700. While above 1700, Gold may continue to surge towards 1800. View is bullish for the near term above 1700.
Silver (15.50) has broken above immediate resistance near 15 and while that holds, we may expect a dip from here towards $14.50 again in the near term. A sustained break above current levels is needed for sentiments to turn further bullish for Silver targeting 16.50 in the coming sessions.
Copper (2.2685) has risen from levels near 2.20, but now has scope for rising towards 2.35/40 in the near term. We may expect an initial dip on testing 2.35/40 but may see an eventual rise above 2.35/40 in the longer run.
FOREX
Dollar Index (100.63) is currently trading below 101 but may soon move up targeting 101-102 in the coming week. Near term looks bullish unless a sharp fall below 100 is seen.
Euro (1.0806) has dipped and is likely to trade sideways within 1.0750 and 1.09 in the near to medium term.
Dollar-Yen (108.86) has support near 107 and while that holds, there could be scope for a rise towards 109-110 in the near term.
EURJPY (117.73) has held above interim support at 117 as expected and has moved up to trade higher. We may expect downside to be limited to 116 while the cross may move up towards 119-120 in the near term.
Aussie (0.6114) could face resistance near current levels or at 0.62 and while that holds we may expect a dip towards 0.59 in the near term. Overall trade in the near term is likely to range in the 0.62-0.59 region.
Pound (1.2252) has support at 1.21 which is likely to hold in the near to medium term and take Pound higher towards 1.25-1.27 levels. Watch price action near current levels.
USDCNY (7.0780) has been trading in a sideways range of 7.06 and 7.1250 and is likely to continue so for the near term. On the upside, there is scope for a rise towards 7.15. Such a rise in USDCNY could indicate weakness for the EM currencies.
USDINR (76.18) may open lower today and could have some scope for a fall towards 75.80. NDF quotes at 75.9050 just now. Higher crude prices could be in favor of Rupee.
INTEREST RATES
The US Treasury yields have bounced as the hopes of the virus spread in the US getting stabilized is giving a sign of relief. The Treasury yields have immediate resistances coming up which needs to be broken in order to move further higher. The German yields remain lower and stable. The immediate outlook is mixed. The 10Yr GoI has surged on Friday last week and can move further higher to test the key resistance and then can reverse lower again.
The US 2Yr (0.27%), 5Yr (0.44%), 10Yr (0.68%) and 30Yr (1.29%) have risen across tenors. It will have to be seen if this bounce can sustain or not. Immediate resistances are available at 0.70% on the 10Yr and 1.30% on the 30Yr. A strong rise past these resistances is needed for the yields to move further higher and reduce the chances of further fall. The 10Yr can rise to 0.90% on a break above 0.70%. The 30Yr can test 1.50% on a break above 1.30%.
The German 2Yr (-0.70%), 5Yr (-0.62%), 10Yr (-0.43%) and 30Yr (-0.03%) yields remain lower and stable. The 10Yr has to rise past -0.40% in order to negate the fall to -0.60% that we had been expecting and rise to -0.20%. The 30Yr remains stable below 0%. As mentioned earlier, the 30Yr can fall to -0.20% while it remains below 0%-0.1% resistance region.
The 10Yr GoI (6.3056%) has surged above 6.20% on Friday last week. A test of 6.38%-6.40% is likely now and the chances of the upside extending upto 6.45% cannot be ruled out. We expect the 10Yr GoI to reverse lower from the 6.40%-6.45% region towards 6.20% again. Broadly we expect the 5.98%-6.40%/6.45% range to remain intact.
