STOCKS
Equities continue to trade stable broadly. Dow can remain sideways for some time and then move higher. DAX can dip in the near-term to test its support and then can reverse higher. Nikkei and Shanghai have risen above their near-term resistances and look bullish. Sensex and Nifty look mixed and can consolidate/dip in the near-term before moving higher.
Dow (23537.68, +33.33, +0.14%) is managing to hold above 23000. As mentioned yesterday, a sideways move between 22500/23000-24000 can be seen for some time. While above 22500, we prefer the Dow to break 24000 and rise to 24500-25000 in the short-term and then reverse lower again.
DAX (10301.54, +21.78, +0.21%) remains lower but is likely to get support in the 10200-10100 as mentioned yesterday. 10100-10700 is a possible range that can be seen in the short-term. Within this range we expect the DAX to bounce-back in the coming days and breach 10700 to test 11000-11200 eventually.
Nikkei (19759.20, +469, +2.43%) has bounced above 19500 again and keeps our bullish view intact. A strong close above 19500 today will pave way for a further rise to 20300-20500 in the coming days. 19500 will be a good immediate support and then 19000 is the next deeper support.
Shanghai (2842.99, +23.05, +0.82%) has risen past 2825 to test 2850 as expected. A break above 2850 can take the index further higher to 2870-2880 and 2900 in the coming days. As we have been mentioning for some time, the broader picture is bullish and the current leg of upmove has the potential to take the Shanghai to 3000-3100 over the medium-term.
Sensex (30602.61, +222.80, +0.73%) and Nifty (8992.80, +67.50, +0.76%) could trade in the range of 30000-31500 and 8800-9200 respectively. Though the near-term looks mixed, we see high chances of seeing a dip first to 29000 (Sensex) and 8700-8600 (Nifty) before a fresh leg of upmove begins targeting 32000-33000 on the Sensex and 9400-9500 on the Nifty.
COMMODITIES
Commodities are stable. Brent is stable while Nymex WTI seems to have dipped. Gold has come down too and could fall towards 1700 before bouncing back higher. Silver looks broadly stable. Copper is trading below crucial resistance and needs to face stiff rejection from there or break to the upside to give clarity on further direction.
Brent (28.37) is stable below $29 while Nymex WTI (26.51) has dipped a bit. We may expect crude prices to trade near current levels for some more time before attempting to bounce back to levels above $30 in the medium term.
Gold (1724.30) has dipped from levels above 1740. While below 1740, there could be some scope for Gold prices to fall towards 1700 in the near term before attempting to bounce back.
Silver (15.63) is likely to trade in the 15-16.5 region in the near term. Unless a break on either side is seen, we may expect price to trade in the mentioned broad sideways range till the next week at least.
Copper (2.3470) has risen again but remains below 2.35 just now. Failure to face a stiff rejection from 2.35 could eventually lead to a break on the upside with Copper moving up towards 2.40 in the medium term. Watch 2.35 as crucial levels just now.
FOREX
Dollar Index, Euro and Dollar Yen look stable just now. Pound and Aussie have moved up slightly but could head towards upper resistance levels. Yuan trades weak. Rupee weakness if sustains could open up chances of testing 77.5-78 on the upside.
Dollar Index (99.75) has dipped slightly. Near term looks volatile with a possible test of 101 on the upside and 98 on the downside. We would have to wait and watch for more clarity.
Euro (1.0870) has supports near 1.0850 and 1.0830 respectively which needs to hold to produce a sharp rise towards 1.09 or higher. Watch price action near the above mentioned support levels.
Dollar-Yen (107.69) has supports near 107.50 and 107 respectively and while they holds, we may expect USDJPY to rise back towards 109.50-110 in the near term.
EURJPY (117.09) has dipped too but could face support near 117-116. While above 116, view is bullish.
Aussie (0.6372) looks bearish while below 0.65 but immediate support for the very near term is seen at 0.62 which could hold and produce a bounce back towards 0.65. Failure to fall sharply below 0.62 could lead to repeated test of 0.65 which could lead to eventual break on the upside. Watch price action near 0.62 and 0.65 respectively.
Pound (1.2506) has risen back above 1.25 and could attempt to test 1.27 in the near term. But while below 1.27, we do not negate a fall back to 1.24-1.20 in the medium term.
USDCNY (7.0761) is stable just now and could test 7.10 before falling back to 7.05 or lower.
USDINR (76.8650) closed sharply higher yesterday. Failure to fall back to levels below 76.60 would open up chances of testing 77.50-78.00 in the near to medium term. View is strongly bullish above 76.60.
INTEREST RATES
The US Treasury yields continue to trade lower and have room to dip more in the short-term. The German yields remain bearish and can fall further in the coming days. The 10Yr GoI can remain in a narrow range above 6.40% before extending the fall below 6.40%.
The US 2Yr (0.23%), 5Yr (0.40%), 10Yr (0.68%) and 30Yr (1.28%) Treasury yields have bounce-back slightly across tenors. We keep our short-term bearish view intact. The 10Yr has a key resistance at 0.80% and can dip to 0.60%-0.58% in the near-term and then 0.40% thereafter while it remains below 0.80%. The 30Yr can test fall to 1.2% and 1.1% in the coming days while it remains below its resistance level of 1.4%.
The German 2Yr (-0.72%), 5Yr (-0.67%), 10Yr (-0.48%) and 30Yr (-0.08%) yields remains lower but stable. The outlook continues to remain bearish. We expect the 10Yr to dip to -0.55% and -0.60% in the near-term. A break below -0.60% can then drag the 10Yr further lower to -0.80%. The 30Yr on the other hand can fall to -0.20% and even -0.40% in the coming days.
The 10Yr GOI (6.4396 is managing to hold above 6.40%. As mentioned yesterday, while above 6.40%, a range bound move between 6.40% and 6.50% is possible for some time. But eventually, we would expect the 10Yr GoI to break 6.40% and fall to 6.35%-6.30% and even lower in the coming days.
