STOCKS
Equity segment is managing to retain the hope of seeing one more leg of rally before it enters into the correction phase. Will the US Federal Reserve meeting outcome today provide the possible trigger for the Equities to move up from here? We will have to wait and watch. Dow oscillates around 28000 and will need a strong rise past 28500 from here to strengthen the case for a fresh rise. DAX is holding well above 13100 and keeps alive the chances of seeing 13800 first and then fall-back. Sensex and Nifty are holding well above their near-term supports and keep the immediate outlook bullish. Nikkei needs to break above 23500 in order to move up towards 24000-24500 in the near term while Shanghai may have scope for a rise to 3400-3450 while above 3250-3300.
Dow (27995.60, +2.27, +0.008%) oscillated around 28000 and has closed flat yesterday. The view remains the same. A strong rise past 28000 and a subsequent move above 28500 will be needed to bring back the bullishness of seeing 29000-29500 on the upside before a sharp correction begins. Such a move will also negate the danger of seeing a sharp corrective fall from current levels itself. Immediate support is at 27500 while above which the chances are still alive of seeing 29000-29500 levels first before the correction.
DAX (13217.67, +24.01, +0.18%) is managing to hold above 13100 and oscillates around 13200. As mentioned yesterday, while above 13100 the bias is bullish to see a rise to 13800 and a sharp corrective fall thereafter. In case of a fall below 13100 from here, a test of 12800 is possible and the 12800-13200 range will come back to play again. Only a strong break below 12800 will turn the outlook bearish.
Nikkei (23487.26, +32.37, +0.14) has moved up a bit and could rise towards 24000, if a break above 23500 is seen and sustained. Immediate support is seen at 23350 as mentioned yesterday. On the upside 24000-24500 is a crucial resistance zone on the weekly candles and could hold in the longer run.
Shanghai (3293.25, -2.43, -0.074%) continues to trade below 3300 and unless a sustained break above this level is seen, Shanghai would find difficulty to strengthen. There is scope for a rise to 3400-3450 on a break above 3300. On the downside , we keep an eye on 3250 which would be the breaking point for our current view to turn bearish,
The support at 11400 on the Nifty (11521.80, +81.75, +0.71%) continues to hold well. A range bound move between 11400 and 11600 is a possibility in the near-term. However, while above 11400, the bias is bullish to see an eventual break above 11600 and rise to 11800 and 12000 in the coming weeks.
Sensex (39044.35, +287.72, +0.74%) hovers higher and is attempting to break above 39000. A sustained rise above 39000 will be bullish to see 40000 initially and then 40500-41000 eventually in the coming weeks. It will also avoid the danger of seeing a fall to 37000 that we had cautioned earlier.
COMMODITIES
Gold and silver have dipped slightly from yesterday’s intra-day highs. But while above immediate trend supports, both Gold and Silver look positive and could rise towards 1980-2000 and 28-29 respectively. Copper is bullish for a rise to 3.10/15 in the next few sessions. View is bullish while above 3.00. Crude prices see a rise after the American Petroleum Institute (API) reported a draw in crude oil inventories of 9.517 mln barrels for the week ending 11-Sep-20. This is against the analyst expectation of 1.27mln barrels. If the immediate supports hold and the current rise in prices sustain, we may expect prices to move up further towards 42.50-45 on Brent and 40-41 on WTI.
Brent (41.02) tested 39.39 yesterday before again bouncing back to 40+ now. Our earlier mentioned 39.32 has held well yet again and while that holds, Brent could have some scope of rising back towards 42.50-45.00 soon. While above 39.32, we may negate a fall to 37.50 just now. But note that below 39.32, we have crucial supports at 37.50 and 35 respectively which would only come into the picture on a break below 39.32. For now, a rise from here looks likely.
Nymex WTI (38.82) is also trying to inch up slowly after testing 37.07 yesterday. While above 37, view is bullish for WTI towards 40-41 in the very near term.
Gold (1964.60) tested 1982.40 yesterday but has dipped slightly from there. While the price remains above 1960, the scope of moving higher towards 2000 remains intact. Watch price action near immediate support at 1960 today.
Silver (27.42) also tested 27.82 yesterday before slightly coming off from there. While the price holds above 27, view is bullish to see a rise to 29 in the next few days.
Copper (3.0660) is headed towards 3.10/15 for the near term while above immediate support at 3 seen on the daily candles.
FOREX
Overall commodities look mixed. Dollar Index is stable and could be ranged for a few more sessions while Euro ahs dipped sharply from 1.19 and while that sustains we may see a fall back to 1.1770-1.1800 in the near term. Pound and Chinese Yuan look strong just now. RBI intervention took USDINR higher yesterday which if sustains could lead to a break above 73.70, targeting 73.90-74.00 before a fall is seen thereafter. Dollar Yen is trading above support at 105 which needs to hold to see a bounce back to 107 in the medium term.
Dollar Index (92.94) fell to test 92.79 yesterday but bounced back from there to trade above 93+. We may expect some ranged trade around 93 for the next 1-2 sessions before deciding on further move. 92.70-93.70 could be the range for the near term.
Euro (1.1848) has dipped a bit after testing 1.19 yesterday. Failure to rise back from here again could limit immediate scope for a further rise beyond 1.19 just now. But watch price action near support at 1.18-1.1770.
EURJPY (124.73) has dipped below 125 to test support at 124.40 which if holds could take the pair back towards 125+ in the near term. Else, a break below 124.40 could be bearish for the near to medium term targeting 123.75.
Dollar-Yen (105.30) has fallen as expected and could test support near 105 before bouncing back from there towards 107. Only of the Dollar Index breaks sharply below 92, it could drag down Dollar Yen too below 105 for a test of 104 on the downside. For now, we keep the ranged view of 105-107 intact.
Pound (1.2907) has risen well and has scope for a test of 1.30 before a dip from there is seen. A sustained break above 1.30 would decrease chances of a fall back towards 1.28/26.
USDCNY (6.7701) has been falling sharply and has room to fall towards 6.7392 initially which also if breaks could drag down the pair further towards 6.68/66 on the downside. Watch price action near 6.7392 to see if it holds to produce a bounce. Overall view is bearish for the near to medium term (2-3 weeks).
RBI bought dollars below 73.50 yesterday and took USDINR (73.65) higher to close above 73.50. Immediate support at 73.70 is to be seen today. If 73.70 holds, we may keep our ranged view of 73.70-73.30 intact and expect a fall but a break above 73.70 could open up chances of testing 73.90-74.00 on the upside before a decline is seen from there. For today, watch price action near 73.70.
INTEREST RATES
The Treasury yields continue to trade stable. The short-term sideways range remains intact and a breakout of the ranges will give a cue on the next direction of move. The US Federal Reserve meeting outcome is due today. While the Fed will keep the rates unchanged, further details of the new inflation policy and any hint on more stimulus will be in focus today. The German yields remain lower and stable. The broader view remains bearish and we expect the German yields to fall in the coming days. The 10Yr GoI can dip in the near-term within its 5.90%-6.10% range.
The US 2Yr (0.14%), 5Yr (0.27%), and 10Yr (0.68%) Treasury yields remain stable while the 30Yr (1.43%) has inched up slightly. The 10Yr and 30Yr retains the 0.65%-0.73% and 1.40%-1.50% range respectively. As mentioned yesterday, a breakout on either side of these ranges will decide whether a rise to 0.80% (10Yr) and 1.60-%1.65% (30Yr) or a fall to 0.50% (10Yr) and 1.30%-1.25% (30Yr) will happen. The long-term trend remains down.
The German 2Yr (-0.70%), 5Yr (-0.69%), 10Yr (-0.48%) and the 30Yr (-0.04%) yields continue to trade stable. We retain our view of seeing a fall to -0.10% and even -0.20% on the 30Yr while it remains below 0%. As mentioned yesterday, a strong rise past 0.05% will be needed to negate this fall. The 10Yr on the other hand can trade in the range of -0.40%/-0.50% with a bearish bias to break -0.50% and fall to -0.60% eventually.
The 10Y GOI (6.0297%, 05.77 GS 2030) has dipped further. It can test 6% and even 5.95%-5.93% on the downside while it trades below the intermediate resistance level of 6.05%. Broadly, the 10Yr GoI can oscillate in the range of 5.90%-6.10% in the coming days.
