STOCKS
Dow still keeps alive the chances of seeing a rise to 32000 before witnessing a correction. But other major indices like DAX and Nikkei are not showing any strong signs to see a rise from here. Instead they look vulnerable to fall from here itself. DAX can break 13800 and fall to 13400-13200. Nikkei can test 29000 and even lower levels on a close below 30000 today. Shanghai, Sensex and Nifty have already begun their corrective fall and have room to fall further in the coming days. Shanghai can test 3550. Sensex and Nifty have resistances at 51000 and 15000 respectively that can cap the upside and drag them to 48000 and 14400-14200 respectively.
Dow (31537.35, +15.66, +0.05%) had recovered sharply from the low of 31158.76 yesterday. The chances of seeing 32000 on the upside are still there. However, we repeat that 32000 is a strong resistance that can cap the upside. Dow can see a corrective fall from there and break below 31000 to target 30000 and even lower levels.
DAX (13864.81, −85.23, +0.61%) broke below 13800 but had bounced-back from the low of 13664.81. A strong rise past 14000 will be needed to gain bullish momentum. While below 14000, the expected fall to 13400-13200 can happen from here itself. For now the chances of seeing the extended rise to 14500-14600 stands reduced.
Nikkei (29923.82, −232.21, -0.77%) has dipped below 30000. The price action over the last few days indicates that the index is coming down gradually. A strong close below 30000 today will then reduce the chance of seeing 33000-34000 on the upside and in turn can drag Nikkei to 29000 going forward. We will have to wait and see.
Shanghai (3611.32, −25.04, -0.69%) has come-off sharply from the high of 3672.15 yesterday. 3600 has been tested already. Our view of seeing a fall to 3550 remains intact.
Nifty (14707.80, +32.10, +0.22%)is managing to hold above 14600. However, it will have to rise past 15000 from here to bring back the bullishness. While below 15000, the outlook is bearish to see a break below14600 and a fall to 14400-14200
Similarly, though Sensex (49751.41, +7.09, 0.01%) is holding above 49500 for now, a strong rise past 51000 is necessarily needed to become bullish. While below 51000, the bias is bearish to break 49500 and see a fall to 48000.
COMMODITIES
Crude prices have dipped a bit. WTI faces rejection from 63 and falls, rise in Brent could be limited too in the near term. Else a break above 63 on WTI can take it towards 65 and Brent toewards 68-70. Gold too has crucial trend resistance at 1820 which needs to break to turn bullish on Gold else a fall back to 1780/60 looks possible. Silver may continue to rise towards 29.50-30 soon. Copper has surged well but may face a corrective dip from 4.25/30 towards 4.0 before resuming the longer term upmove.
Brent (65.07) and WTI (61.23) have dipped from higher levels but the dip looks short lived as the prices may head towards 68-70 and 65 respectively. If interim resistance near 63 holds on WTI and pulls the price lower, it could pull down Brent too in the near term. Watch price action near 63 on WTI else the mentioned targets could be met soon before a sharp reversal is seen.
Gold (1811.50) has immediate resistance at 1820 which if holds could produce a rejection to 1780/60 again on the downside. Watch price action at 1820. A break on the upside could lead to a sharp rise towards 1860 in the longer run; else range of 1760/40-1820/40 is likely to hold for the medium term.
Silver (27.93) has dipped but has scope for a rise towards 29.50-30 while above 26.50. Broad range of 26.50-30 is likely to hold for the medium term.
Copper (4.2085) may face slight rejection near 4.25/30 which if holds could produce a dip towards 4.00 before resuming the long term upmove. Failure to hold below 4.25/30 would take it higher towards 4.50/60.
FOREX
Dollar Index has risen back but EURO still remains bullish while above 1.21-1.2050. Aussie, Pound and EURJPY look bullish for the near to medium term. USDJPY ahs scope for a rise to 106.50 while above 105. USDCNY may remain within 6.44-6.48/50 while USDINR needs to break below 72.25 to head lower; else a bounce from current levels could take it higher indicating a possible reversal.
Dollar Index (90.06) has not been able to sustain below 90 and has risen a bit. Upside is limited to 91 while there is enough room for a fall towards 89-88 in the medium term. View is bearish while below 91.
Euro (1.2156) is almost stable and may rise towards 1.22-1.23 in the near term. A break above 1.22 could accelerate the rise.
EURJPY (128.21) has scope for a rise towards 129-130 in the medium term. View is bullish while above 127.
Dollar-Yen (105.46) bounced back sharply and is holding above immediate trend support at near 105. While that holds, there is scope for a possible test of 106.50 on the upside before a fall back is seen. A sharp fall in Dollar Index if seen can take the USDJPY down to 104 else the upmove remains intact.
Aussie (0.7930) needs to break above immediate levels of 0.80 to rise further towards 0.82 in the medium term. Watch price action near 0.80 in the near term. Downside could be limited to 0.7760.
Pound (1.4172) has dipped from 1.4240. Need to see if this holds and lets the currency dip towards 1.41 before again resuming the uptrend. Else a continued rise from here looks possible.
USDCNY (6.4603) has moved up and could target 6.48/50 on the upside while immediate downside is limited to 6.44.
USDINR (72.4650) bounced well from 72.36 yesterday but while below 72.50, there is scope for a possible re-test of 72.25 a break below which could open up chances of a fall towards 72.15-72.00 in the near term. Failure to break below 72.25 would indicate a reversal signal.
INTEREST RATES
The US Treasury yields have dipped slightly expect for the 30Yr that is continuing to move up. The outlook is still bullish and we except the yields to move up further. The US Federal Reserve Chairman Jerome Powell had said yesterday that the inflation is still low and long way to attain the goal. While the yields have not reacted much immediately for this, it will have to be seen how Powell’s comment is going to weigh going forward. The German yields have bounced and keep the bullish view intact. A further rise is possible in the coming days. The 10Yr GoI can see a corrective fall in the near-term before resuming its upmove.
The US 2Yr (0.11%), 5Yr (0.56%) and 10Yr (1.34%) Treasury yields have dipped slightly while the 30Yr (2.19%)continues to move up. The 30Yr has come near 2.20% as expected. It will have to be seen if it can breach 2.20% and extend the rise to 2.40% from here itself or a corrective fall can be seen before the above mentioned rise happens. The 10Yr has support at 1.30% while above which the bullish outlook of seeing 1.45%-1.55% on the upside will remain intact.
The German 2Yr (-0.70%) and 5Yr (-0.62%) remains stable while the 10Yr (-0.32%) and 30Yr (0.19%) have bounced-back. This keeps alive the bullish view of seeing -0.25% on the 10Yr. The 30Yr on the other hand will have to rise past 0.20% decisively in order to strengthen the bullish momentum and target 0.40% on the upside. The price action in the coming sessions will need a close watch.
The 10Yr GoI (6.1724%, 05.85 GS 2030) has come-off below 6.20% yesterday. A corrective fall to 6.15%-6.12% is possible in the near-term while the yield stays below 6.20%. Thereafter a fresh rise can happen. Our view of seeing 6.28% on the upside will get delayed now.
