STOCKS
The battle between Bulls and Bears continues. The Bulls could be getting tired and might be looking for rest, but are not keen on giving way yet.
As the Dow (26642.59, +556.79, +2.13%) has managed to hold above near-term Support just below the 26000 level mentioned yesterday, it could try to test 27000.
The DAX (12697.36, -102.61, -0.80%) dipped a bit yesterday, but looks bullish for a rise towards 13200 while above 12400.
Resistance at 23000 continues to hold on the Nikkei (22914.21, +327.20, +1.45%). A break thereof is needed to take the Nikkei up towards 24000. We have to see if near-term Support near 22400 holds today or not.
We continue to stand aside to see if the Shanghai (3370.02, -44.60, -1.31%) breaks above 3450-3500 in the current thrust, or if it needs to dip towards 3300-3200 before that.
We got lulled into looking for a rally in the Nifty and Sensex in our Morning Briefing yesterday. However, the correction to 10600 that we had expected last week played out instead as the Nifty (10607.35, -195.35, -1.81%) closed the day at 10607.35 after hitting an intra-day low of 10562.90. 10600 itself is a crucial support just now and while that holds we may expect a bounce back in the Nifty and Sensex today, especially after a sharp rise seen in Crude prices and Dow. If so, the Sensex (36033.06, -1.80%) too could see a bounce back towards 37000 or higher. Expect a strong session on the Indian equities today.
COMMODITIES
Crude prices have moved up and could be on the verge of breaking above immediate resistances and heading towards higher levels soon. Gold, Silver look bullish too for the near term. Similar rise in Copper is expected but could be limited to 3.00 in the near term which if holds could produce a dip.
So far, in line with expectations, Brent (43.17) and WTI (40.54) trade higher, holding above Supports, and could be gearing up to break above Resistance at 43.50 and 41.00 respectively. If they are successful, they can target 50 and 45.
Gold (1811.80) tested support near 1797 yesterday and has successfully bounced back from there. While above 1800, view is bullish for Gold which could rise back towards 1850/60 or even higher in the near term.
Silver (19.68) tested 19.98 before coming off from there. This has been in line with our broad range of 20-18.5 mentioned yesterday. But if the prices sustains and attempts to rise above 20 again, we may expect a test of 21 soon.
As suggested, Copper (2.9360) stayed below 3.00 and dipped to 2.90 yesterday. The chances of further fall to 2.80 remain intact while 3 holds as interim resistance.
FOREX
Weakness in the Dollar Index has pulled up Euro, EURJPY, Aussie and Pound but we remain cautious to see if respective supports and resistances hold just now. Rupee could strengthen if equities open up higher and if 75.50 holds for now.
Dollar Index (96.18) has fallen as expected and could re-test 96.0-95.70 from where a bounce could be expected back towards 97. Overall 97.0-96.0-95.70 is the broad range that could hold for some more time before a sharp move comes in on either direction.
Euro (1.1402) tested 1.1423 yesterday and is trading just above 1.14 in line with our mentioned resistance. A sharp fall in Dollar Index is keeping Euro higher but we may expect
EURJPY (122.30) has also managed to move up above 122 and while that holds EURJPY could be bullish towards 123-124 in the near to medium term. While Euro looks bullish,
EURJPY may rise in the near term.
Dollar-Yen (107.25) has risen a bit but needs to move to 108 and higher to turn further bullish for the medium term. Else we may have to look for a dip back to 106 in the longer run. Watch 107.50 today for a break or bounce from there.
Aussie (0.6999) has risen surprisingly contrary to our expectation of a possible dip from here towards 0.68. If Aussie manages to break above 0.70, we may expect a rise towards 0.71/72 as mentioned earlier. Our expected dip from 0.70 may not be seen while the upside momentum picks up.
Pound (1.2572) may rise towards 1.26 which if holds could push the currency down towards 1.2480 in the near term.
USDCNY (7.0032) has been ranged in the 7.0239-6.98 region and could continue to remain so for a few more sessions. Upside could be limited to 7.03 while we may expect a dip from there towards 7.00.
USDINR (75.4250) could dip today while 75.50 holds on first testing within the recent rise seen in the last 2-3 sessions. A fall to 75.30-75.20 could be possible in the near term before another bounce is seen. Although we expect a dip today, we do not negate upside chances of rising to 75.75/85 in the medium term.
INTEREST RATES
The US Treasury yields are stable and could dip some more towards respective supports while the German yields trade above our mentioned supports just now. The 10Yr GOI has risen to 5.82% as expected and could dip a bit from here.
The US 2Yr (0.16%), the 5Yr (0.29%), 10Yr (0.64%) and the 30Yr (1.33%) are stable and we could see a dip towards suport levels in the near term. A dip to 0.60%-0.58% on the 10Yr and 1.30%-1.25% on the 30Yr looks possible in the near term. View is bearish for the near term.
The German 2Yr (-0.661%), the 5Yr (-0.647%), the 10YR (-0.443%) and the 30Yr (-0.032%) look mixed but continue to trade above immediate supports. We continue to look for a rise towards -0.63% (2Yr), -0.60% (5Yr) and -0.38% (10Yr) respectively.
The 10Yr GOI (5.8205%) could be expected to dip from here towards 5.75% again as we have been mentioning for quite some time now. Only if the break above 5.82% sustains, we would have to look for higher levels but that seems less likely just now.
