STOCKS
Dow has risen well above 34000 and can remain in a range of 33500-35000 within its broader uptrend. DAX has gained momentum and can rise to 15700-15800 before reversing lower. Nikkei has failed to sustain the break above 28000 and is bearish to fall further in the coming days. Shanghai has broken its 3350-3500 range on the upside and can gain strength to see 3600-3650 on the upside on a break above 3525 from here. Sensex and Nifty are holding above their intermediate supports and can move up in the near-term. But the broader picture is still weak while below 15100 (Nifty) and 50000 (Sensex) to see a fall again.
Dow (34382.13, +360.68, +1.06%) has risen further and well above 34000. As mentioned on Friday a range of 33500-35000 is possible while above 33500 within the current uptrend. 33500 and 33000 are crucial supports. Dow has to fall below 33000 to become under pressure and turn bearish.
DAX (15416.64, +216.96, +1.43%) has surged and closed just above 15400 last week. This has increased the chances of seeing 15700-15800 – a crucial resistance zone on the upside. We expect 15800 to cap the upside and DAX to reverse lower again towards 15200 going forward.
The bounce-back in Nikkei (27907.51, −176.96, -0.63%) last week has failed to sustain above 28000. This keeps our bearish view intact of seeing 27000-26000. As mentioned on Friday, a strong rise past 28500 is needed to turn the view bullish again.
Shanghai (3516.34, +25.97, +0.74%) has risen sharply and is now trading above 3500 contrary to our expectation to reverse lower from 3500 and keep the 3350-3500 range intact. Next important resistance is at 3525. A strong break above it will be bullish to see 3600-3650 on the downside.
Nifty (14677.80, −18.70, -0.13%) and Sensex (48732.55, +41.75, +0.09%) are managing to hold above their intermediate support levels of 14600 and 48500 respectively. A strong rise past 14800 (Nifty) and 49000 (Sensex) will be needed to gain momentum and move further up towards 15000-15100 (Nifty) and 50000-50500 (Sensex). Else the indices are likely to remain under pressure to see 14400-14200 (Nifty) and 47000 (Sensex) on the downside. The price action in the coming days will need a close watch.
COMMODITIES
Crude prices have bounced a bit but continue to remain below important resistances. We may look for a ranged movement in Crude for some more time. Gold has bounced well and could test resistance near 1860 from where a break or bounce would decide on the next course of movement. Silver is holding above support at 27 and could test 28.0-28.50. Copper has immediate support at 4.60 which if holds could take price towards 4.80/90; else a fall towards 4.40 cannot be negated.
Brent (68.95) and WTI (65.62) have bounced back but continue to remain below the respective resistances of $70 and $67. A sideways range of 70-65.75 and 67-62.50 could hold for the medium term. Only a break on either side of the mentioned range will decide the next course of movement. Till then we would wait and watch. Preference is to expect that the respective resistances will hold in the longer run.
Gold (1850.40) has bounced back too and did not see our expected fall to 1800. While Gold is headed towards resistance at 1860, we need to keep a close watch if the resistance holds or paves way for further upside. If 1860 holds, we may not rule out a possible dip to 1800-1760 again but a break above 1860 will increase upward momentum taking prices towards 1900 or higher and reducing chances of falling towards 1800-17600. Watch price action near 1860 in the near term.
Silver (27.70) has bounced from support near 27 and may test 28.0-28.50 in the near term. View is bullish.
Copper (4.6630) has immediate support at 4.60 which if holds could take Copper prices towards 4.80/90 in the medium term. Only a break below 4.60, if seen would indicate a fall towards 4.50/40 in the medium term. Watch price action near 4.60.
FOREX
Dollar Index has dipped again and needs to hold above 90 to keep bullish possibilities alive else a it could be vulnerable to a sharp fall eventually. Euro could test 1.22 before falling from there while EURJPY looks bullish towards 135. Aussie and Pound look stable within 0.77-0.7850 and 1.40/38-1.42. USDJPY can test 109 before rising from there. USDCNY may rise while above 6.43/42 while USDINR may hold within 73.50-73.25. Any break below 73.25 may drag the pair lower towards 73 which is a crucial long term support.
Dollar Index (90.386) fell sharply last week but it would be important to see if the index remains above support at 90 to rise back towards 91-91.50 again in the near term. Only a break below crucial support at 90, if seen would make view bearish else we continue to look for a bounce from 90.
Euro (1.2134) has risen above 1.21 and could test 1.22 on the upside soon before falling from there. Overall range of 1.22-1.2050 may hold for the medium term.
EURJPY (132.67) is bullish to see an eventual rise to 135.
Dollar-Yen (109.32) has dipped a bit but could be limited to 109 on the downside from where a bounce towards 110 looks likely. Broad range of 109-110 may hold for sometime.
Aussie (0.7759) has bounced well from 0.77 and could trade within 0.7850-0.77 for sometime.
Pound (1.4039) is holding above 1.40 and needs to continue moving up to rise further towards 1.42 in the near to medium term. Any break below 1.40, if seen can drag the Pound down to 1.38. Watch orice action while above 1.40.
USDCNY (6.4373) dipped sharply from 4.4570 last week. 6.43/42 is an immediate support below current levels which needs to hold strong to produce a bounce back towards 6.46/48 in the medium term.
USDINR (73.29) fell on Friday to close near the lower end of the 73.50/25 range. While the range is likely to continue today also, a break below 73.25 needs to be seen for the pair to be bearish towards 73. Immediate resistance is seen near 73.45/50. Note that 73 would be a strong support for Dollar-Rupee in the medium term.
INTEREST RATES
The US Treasury yields have come-off sharply on Friday as the intermediate resistances have held well. A further dip is possible in the coming days and the expected rise could get delayed. Overall we can expect the Treasury yields to trade in a broad range for some time. The German yields sustain higher and keep the bullish view intact to move up further from here. The 10Yr GoI seems to be gaining strength to see a corrective rise first before resuming the downtrend.
The US 2Yr (0.15%), 5Yr (0.81%), 10Yr (1.62%) and 30Yr (2.34%) have come-off sharply on Friday from levels seen on Thursday last week. 1.7% on the 10Yr and 2.4% on the 30Yr are holding well. While below these intermediate resistances a dip to 1.5%-1.45% (10Yr) and 2.2%-1.15% (30Yr) cannot be ruled out again. A strong rise past 1.7% (10Yr) and 2.4% (30Yr) is needed to move further up towards 1.8% (10Yr) and 2.5% (30Yr) eventually.
The German 2Yr (-0.67%), 5Yr (-0.52), 10Yr (-0.13%) and the 30Yr (0.43%) yields sustain higher. The bullish view is intact to see 0% (10Yr) and 0.55% (30Yr) while the yields remain above -0.20% (10Yr) and 0.35% (30Yr).
The 10Yr GoI (6.0276%) has risen and closed above 6.02%. It seems to be gaining strength to see a corrective rise to 6.04%-6.06% and even 6.10% first in the coming days. Thereafter the overall downtrend can resume targeting 5.95%-5.9% over the medium term.
