STOCKS
Dow (34600.38, +25.07, +0.07%) sustains above and could inch higher gradually towards 35000 in line with our expectation. Broadly, 33500-35000 is the range of trade now. We expect Dow to break this range above 35000 eventually and rise to 36000.
DAX (15602.71, +35.35, 0.23%) sustains above 15500 and keeps intact our bullish view of seeing 15800 now. As mentioned yesterday, a sustained rise above 15600 can take the index even upto 16000-16100 on the upside. Only a fall below 15400 will negate this rise.
Nikkei (29048.28, +102.14, +0.35%) has risen back above 29000 again and keeps intact the chances of testing 29500-30000 on the upside. The price action on the charts is gradually reducing the danger of seeing 27000-26000 on the downside for now. However, we will have to wait for a strong rise past 30000 to completely negate that danger.
Shanghai (3609.74, +12.60, +0.35%) is stuck between 3580 and 3630 over the last few days. The near-term outlook is mixed. 3650 can be cap on the upside for now. While below 3650, a corrective fall to 3550 is still possible. A strong rise past 3650 is needed immediately to resume the uptrend without seeing a corrective fall. Our long-term view remains bullish to see 3800 on the upside.
Nifty (15576.20, +1.35, 0.01%) and Sensex (51849.48, −85.40, -0.16%) have recovered well from their respective lows of 15459.85 and 51450.58 yesterday. The support at 15450 (Nifty) and 51500 (Sensex) mentioned yesterday are holding well. While above 15450-15400 (Nifty) and 51500-51150 (Nifty), the bullish view is intact to see 16200-16500 (Nifty) and 53000-54000 (Sensex) in the coming weeks.
COMMODITIES
Crude prices have risen and could continue to rise further towards 72-73 (Brent) and 70 (WTI) initially where the prices could pause for a while before resuming the rise towards 72-75 (WTI) and 75-77 (Brent) in the longer run. Gold has risen slightly. Although a rise to 1920/50 looks possible but the rise could be very slow. Silver has risen faster as compared to Gold and could now be headed towards 29 while above 28. Copper needs to break or bounce from 4.60 to decide which way to move in the near term. There is scope for either a test of 4.50 or 4.70/80 in Copper.
Brent (71.80) and WTI (69.25) continue to rise as the movement now looks strongly bullish. WTI has almost reached $70 on the upside and if it does not come off in the first testing then a further rise to $75 or higher cannot be negated. On Brent, the price has broken above $70 clearly and may test 72-73 initially before rising further towards 75-77 levels. We may expect short corrective dip from 72-73 region or from higher levels of 75-77. Immediate view is bullish.
Gold (1908.70) has inched up a bit and could slowly rise towards 1920 in the next few sessions. A further rise above 1920 could take the price towards 1950 in the medium term.
Silver (28.29) has risen well compared to Gold and while above 28, it can attempt to rise towards 29 in the near term.
Copper (4.6135) has dipped possibly because 4.70 is holding well for now. Copper could test 4.60 over the next 2-3 sessions but a break below 4.60, if seen can drag it lower towards 6.50 before again rising from there. Watch price action near 4.60 to see which way the price moves.
FOREX
Dollar Index may rise to 90.20 before again falling from there. Euro could test 1.2150-1.21 in the near term before again attempting to rise higher. Aussie and Pound could be ranged for now while EURJPY can remain below 134.12 for the very near term. USDCNY is above 6.38 and while that holds, it can head towards 6.40. USDINR has scope to test 72.90 on the downside before again bouncing back to higher levels. On the upside, 73.30 could hold just now.
Dollar Index (89.964) has risen slightly and has scope for a test of 90-90.20 on the upside before another dip is seen. If such a rise is seen, Euro could dip towards 1.2150. Watch price action near current levels, just now.
Euro (1.2203) has dipped but if it moves below 1.22 again, a re-test of 1.2150-1.2100 could come into the picture for the near term. Watch price action near current levels.
EURJPY (133.84) could test 134.12 but a break above that is needed for the cross to continue moving up towards 135/136 in the medium term. View is bullish on EURJPY.
Dollar-Yen (109.67) has risen further from levels near 109.60 seen yesterday. A test of 109.70/80 is possible before dipping from there. Narrow range of 109.20-109.80 could be seen for the day.
Aussie (0.7739) has dipped instead of breaking above 0.7780. The expected fall towards 0.7740/30 is playing out well. A bounce from 0.7730 if seen could take it higher else a fall towards 0.7675 is possible.
Pound (1.4168) trades above 1.4140 and could rise to 1.4180-1.42 again in the near term. A break below 1.4140 will be needed for the exchange to fall towards 1.41.
USDCNY (6.3855) is rising and needs to move above 6.40 to rise further in the medium term and establish a low for the near term.
USDINR (73.09) rose to test initial resistance at 73.30 and came off sharly from there to close at 73.09. Today we may expect a fall to 73.0-72.90 on the downside while upside could be intact at 73.30 that may hold for the near term. But whether the pair falls below 72.90 or not is to be seen.
INTEREST RATES
The US Treasury yields have dipped again and are hovering just above the lower end of their 1.57%-1.7% (10Yr) and 2.25%-2.4% (30Yr) range. We expect this range to hold for some time. The German yields are inching down in line with our expectation and have room to dip further before resuming their broader uptrend. The 10Yr GoI has to sustain above 6% to see the expected corrective bounce. Else the overall downtrend can resume from here itself.
The US 2Yr (0.15%), 5Yr (0.79%), 10Yr (1.59%) and 30Yr (2.27%) Treasury yields have dipped across tenors. The 10Yr and 30Yr are poised just above the lower end of their 1.57%-1.7% (10Yr) and 2.25%-2.4% (30Yr) range respectively. We expect this range to hold and the yields to rise gradually towards the upper end of this range. As mentioned yesterday, 1.45%-1.8% (10Yr) and 2.15%-2.5% (30Yr) are the wider range of trade that is possible over the next couple of days.
The German 2Yr (-0.68%), 5Yr (-0.58%), 10Yr (-0.20%) and the 30Yr (0.36%) yields are inching lower in line with our expectation. The yields can test 0.30%-0.25 (30Yr) and -0.30% (10Yr) on the downside in the near-term. Thereafter a fresh rise is possible that will keep the broader uptrend intact to 0% (10Yr) and 0.55% (30Yr) on the upside over the medium-term.
The 10Yr GoI (6.0050%) fell yesterday. Immediate support is at 6%. While this support holds, the chances are still there to see the corrective bounce to 6.04%-6.06% before resuming the downtrend. Only a strong break below 6% will negate this chance and drag the yields from here itself straightaway towards 5.95% again and then 5.90% eventually.
