STOCKS
Dow remains mixed and continues to hover around 34000. It has to sustain above 33500 to move up towards 35000 and avoid a fall from here. DAX remains higher but lacks momentum. Resistances at 15500-15700 can cap the upside from here and drag it lower going forward. Nikkei can move up within its 28000-31000 range. Shanghai is trading at the upper end of its 3350-3500 range and needs to see if it can break this range now on the upside. Sensex and Nifty can consolidate for some time before witnessing a deeper fall.
Dow (34043.49, +227.59, +0.67%) continues to oscillate around 34000. It has to sustain above 33500 and get a strong follow-through rise above 34000 to move up to 35000 in the coming days. As mentioned last week, a break below 33500 followed by a fall below 33000 will turn the outlook bearish to see 32000-31000 on the downside..
DAX (15279.62, −40.90, -0.27%) sustains above 15200 but seems to lack momentum to break 15500 and rise to 15700. We expect DAX to break below 15000 and fall to 14500-14000 in the coming weeks. But whether this fall will happen from here itself or after an extended rise to 15700 is not clear.
Nikkei (29100.79, +80.16, +0.28%) has risen back above 29000. A rise to 30000-30500 is possible in the near-term. Overall Nikkei can continue to trade sideways in the range of 28500-30500 (narrow) or 28000-31000 (broad) in the coming days.
Shanghai (3492.53, +18.36, +0.53%) is trading just below 3500. The price action now will need a close watch to see if Shanghai manages to break above 3500 or not. A strong break above 3500 will be bullish to see 3600 on the upside. While below 3500, the sideways range of 3350-3500 will remain intact and the index can fall within the range.
Nifty (14341.35, −64.80, -0.45%) and Sensex (47878.45, −202.22, -0.42%) remain stable above their crucial supports. As mentioned on Friday, we can look for a range of 14150-14600/700 (Nifty) and 47000-49000 (Sensex) for some time. The broader bias is bearish to see a fall to 14000-13800 on the Nifty and 46000 on Sensex while the indices remain below 14700 and 49000 respectively.
COMMODITIES
Gold and silver see a short corrective fall while Copper has surged sharply along with a rise in crude prices. Brent could be ranged within 64-68/70 while WTI may trade within 65-57 in the near term. Gold and Silver may trade between 1760-1820 and 25-27 respectively. Copper may rise towards 4.60 and looks strongly bullish.
Brent (66.08) has risen slightly and could test $68-70 before falling back from there towards $64. An immediate range of 70/60-64 looks likely to hold. WTI (62.18) on the other hand has scope for a fall to 57 before bouncing back from there. On the upside, movement could be restricted to 65 in the very near term.
Gold (1780.60) has dipped and seems to be holding below 1800 just now. A possible ranged trade within 1820-1760 looks possible before resumption of uptrend is seen again in the longer run. While above 1760, view is bullish on Gold.
Silver (26.10) has dipped and is holding below 27. A fall to 25 could be possible in the near term before a bounce back is seen from there again. Overall, a range of 25-27 looks possible in the near term.
Copper (4.3445) has immediate trend resistance on the daily charts near current levels and if that manages to break on the upside, it is indicative of a sharp upmove towards 4.60. On the longer term charts, view is bullish.
FOREX
Dollar Index is bearish and could be slowly headed towards 90-89 in the medium term. Euro is rising towards 1.22-1.2250 while EURJPY, Aussie, Pound and USDCNY looks bullish towards 131, 0.78-0.7850, 1.3950 and 6.50/52 respectively. USDINR could be ranged within 74.80-75.35 and needs to break on either side to give clarity on further directions.
Dollar Index (90.71) looks bearish and could fall eventually to test 90.50-90.00 in the medium term. Broader view is bearish towards 90-89 levels.
Euro (1.2112) has risen well and while above 1.21, view is bullish towards 1.22-1.2250.
EURJPY (130.49) has risen back sharply from levels above 129.50 and while above 129.50, a scope for retesting 131 is on the cards. Watch for a break out on either side of the 129-131 range.
Dollar-Yen (107.73) continues to fall and could soon be headed towards 107 on the downside. View is bearish on Dollar Yen while below 108.
Aussie (0.7775) is trading higher and could be headed towards 0.78-0.7850 on the upside.
Pound (1.3902) has been bouncing well since the last couple of sessions and may rise towards 1.3950-1.40 on the upside. Failure to break above 1.3950 can push the exchange back towards 1.38 on the downside.
USDCNY (6.4870) has bounced a bit while above 6.48 and could rise sharply from here towards 6.50/52 in the medium term.
USDINR (75.0150) is likely to continue trade within 74.80-75.35 for today also and unless a break on either side of the mentioned range is seen, it is difficult to project the next course of movement.
INTEREST RATES
The US Treasury yields can come down to test their crucial supports ahead of the US Federal Reserve meeting this week. The outcome of the Fed meeting on Wednesday could be key in deciding whether the yields will hold above those supports or not. We will have to wait and watch. The German yields remain higher and stable. The outlook is bullish to see a rise from here. The 10Yr GoI remains below 6.10% and keeps our bearish view intact of testing 6% and 5.90% on the downside.
The US 2Yr (0.16%), 5Yr (0.82%), 10Yr (1.56%) and 30Yr (2.23%) remain lower. The crucial support levels of 1.50% (10Yr) and 2.20% (30Yr) can be tested ahead of the Fed meeting this week on Wednesday. The yields have to sustain above these supports to keep the uptrend intact and move up again to 1.7%-1.8% (10Yr) and 2.4%-2.5% (30Yr). We reiterate that a strong break below 1.50% (10Yr) and 2.20% (30Yr) is needed to indicate a trend reversal and drag the yields lower to 1.2% (10Yr) and 2% (30Yr) going forward.
The German 2Yr (-0.70%), 5Yr (-0.61), 10Yr (-0.26%) and the 30Yr (0.28%) yields remain higher and stable. We retain our bullish view of seeing a break above -0.25% (10Yr) and 0.30% (30Yr) and see a rise to -0.20%/-0.15% (10Yr) and 0.35% (30Yr) in the coming weeks. The yields have to fall below -0.35% (10Yr) and 0.20% (30Yr) to negate the above mentioned rise.
The 10Yr GoI (6.0574%) sustains below 6.10% and keeps our bearish view intact of testing 6% initially and 5.90% eventually on the downside. 6.10% is an immediate resistance which is holding well now.
