STOCKS
Equities broadly remain bullish. Dow is heading up towards the upper end of its 33500-35000 range. Bias is bullish to break this range on the upside eventually. DAX was closed yesterday and is likely to break its 14800-15500 range on the upside in the coming days. Nikkei is breaking above 28500 and can rise to 29000-29500 if the break sustains. Shanghai has surged above 3500 and has turned bullish contrary to our expectation to see a fall to 3450-3400. Sensex and Nifty remained higher and stable yesterday. The outlook is bullish and a further rise is possible.
Dow (34393.98, +186.14, +0.54%) is moving up towards the upper end of its 33500-35000 range in line with our expectation. Our broader view remains bullish to see a break above 35000 and a rise to 36000 eventually. 33500 and 33000 are crucial supports and the Dow has to fall below 33000 to negate the rise to 36000 and turn bearish.
DAX (15437.51) was closed yesterday. We expect it to break the 14800-15500 range on the upside and then reverse lower.
Nikkei (28534.27, +169.66, +0.60%) is attempting to break above 28500. While this break sustains, a further rise to 29000-29500 is possible in the coming sessions. That would delay the fall to 27000-26000 that we have been mentioning for some time. However, a strong rise past 29500 is needed to completely negate the above mentioned fall.
Shanghai (3555.33, +58.05, +1.66%) has surged above 3500 and has turned bullish to test 3625-3650 on the upside. Our view of seeing a fall to 3450-3400 has gone wrong.
Nifty (15197.70, +22.40, +0.15%) oscillated around 15200 yesterday. A strong rise past 15200 will pave way for a further rise to 15400-15450. Overall the view is bullish while the Nifty remains above the 15100-15000 support zone.
Sensex (50651.90, +111.42, +0.22%) sustains above 50500. A break above 51000 will boost the bullish momentum to test 51500-52000 on the upside. 50500-50000 is a good support zone.
COMMODITIES
Commodities are mixed today. Gold and silver have dipped and could trade lower for a few sessions before bouncing back to higher levels eventually. Copper may head towards 4.60/65 before again falling off from there. Crude prices have risen well and could soon test resistances which need to hold to drag the prices lower again. Any break above immediate resistance levels could take the prices further up. Watch closely the price action near $70 and $67 on Brent and WTI respectively.
Brent (68.67) continues to rise and is headed towards resistance at $70. It would be important to see if the price faces rejection from $70 and falls back towards $65-62 or manages to break above $70 to head higher. While our preferred view is to see a fall from $70, we would keep a close watch at price action in the next few sessions.
WTI (66.17) has risen too and need to break above immediate resistance at $67 to head towards upper resistance at $70. Watch price action near $67 closely for the next few sessions.
Gold (1876.40) fell back after a brief bounce above 1880. A re-attempt to break above 1880 is possible that may take the price to 1900 or higher eventually. On the downside, immediate fall could be restricted to 1860.
Silver (27.71) has dipped too but while above 27, there is still some hope of a rise back to 28+ levels in the medium term. A break below 27 would negate bullish possibilities and extend the fall downwards, forcing us to look at fresh lower targets.
Copper (4.5680) rose before testing support levels of 4.40/30. We may expect a test of 4.60-4.65 on the upside before again falling to 4.40/30 in the medium term. A successive break above 4.70 is needed to become bullish again on the price.
FOREX
Dollar Index has fallen and looks bearish towards 89.30 in the near term. Euro can rise to 1.23-1.2320 before falling back from there. EURJPY looks bullish while above 132 and can re-test 133.50. Aussie and Pound look bullish for the near term. Dollar Yen may test 108.50/30 before bouncing back from there. USDCNY is testing crucial support at 6.41 which if fails to hold could make the pair vulnerable to fresh fall towards 6.36. USDINR may trade within 72.80-73.00. Any break on either side could take it towards 72.60/50 or 73.25.
Dollar Index (89.76) has fallen sharply re-confirming the bearishness intact. A break below 89.65 is needed for the index to fall towards 89.50/30 below which targets of 88-86 would open. Near term view is bearish.
Euro (1.2225) has risen well and could test 1.23-1.2320 on the upside before falling off from there. View is bullish while above 1.2150.
EURJPY (132.92) has tried to rise too and could re-test 133.50 soon. Immediate view is bullish while above 132.
Dollar-Yen (108.71) is stuck near the lower end of the 110-108.50/30 range and a bounce from lower levels of the range could again take it back towards 109-110 soon. Watch if the pair manages to rise from 108.50/30 or breaks lower.
Aussie (0.7757) has risen and could be headed higher towards 0.78.
Pound (1.4174) has been rising steadily and could continue to slowly move up towards 1.42. Thereafter whether it faces rejection to fall back towards 1.40 or manages to rise towards 1.43 is to be seen.
USDCNY (6.4113) has fallen sharply and is just few pips away from crucial support at 6.41. A break below 6.41 can make the pair vulnerable to see fresh lows of 6.36, within the current downtrend that started in March’21. Watch price action near 6.41/40.
USDINR (72.9650) traded within 72.9750-72.86 yesterday. We may continue to look for a sideways trade between 72.80-73.00 today. Any break below 72.80 would open up chances for a fall to 72.60/50 while a break above 73 could take it higher towards 73.25. Watch for a break on either side of the 72.80-73.00 range in the very near term.
INTEREST RATES
The US Treasury yields are inching down gradually within their broad sideways range. We expect the Treasury yields to remain sideways for some time. The German yields are witnessing a corrective dip as expected within their overall uptrend. They can move down to test their supports and then resume the uptrend. The 10Yr GoI consolidates in a narrow range within its broader downtrend.
The US 2Yr (0.15%), 5Yr (0.81%), 10Yr (1.61%) and 30Yr (2.30%) Treasury yields have dipped across tenors. The 10Yr and 30Yr are at the lower end of their 1.6%-1.7% and 2.3%-2.4% range respectively. It will have to be seen if they can bounce-back from here to keep this narrow range intact. 1.45%-1.8% (10Yr) and 2.15%-2.5% (30Yr) is the broader range of trade that is likely to be in place for some time.
The German 2Yr (-0.67%), 5Yr (-0.53%), 10Yr (-0.14%) and the 30Yr (0.41%) yields are inching down gradually. As mentioned yesterday, corrective dip to test the supports at -0.20% (10Yr) and 0.35% (30Yr) can be seen in the near-term. Thereafter the broader uptrend can resume to target 0% (10Yr) and 0.55% (30Yr) on the upside over the medium-term.
The 10Yr GoI (5.9720%) remains stable within the narrow 5.95%-6% range. The broader view is bearish to see 5.9% on the downside. But whether this fall will happen from here itself or after a corrective bounce to 6.02%-6.04% is not clear.
