STOCKS
Dow witnessing the near-term dip to 34000 in line with our expectation within its overall uptrend. 34000 and 33500 are strong supports that can limit the downside. DAX keeps intact the bullish view of seeing 16000-16100 on the upside. Nikkei is moving up towards 29500-30000 as expected. Shanghai has declined sharply and needs to sustain above 3550 in order to keep the 3550-3625 range intact and avoid a further fall from here. Sensex and Nifty have risen sharply from their supports at 52000 and 15600 respectively and are keeping the bullish view intact.
Dow (34393.75, −85.85, -0.25%) remains below 34500 and keeps intact our view of seeing a near-term dip to 34000. However, the overall view is bullish to see a break above 35000 and a rise to 36000 eventually. Strong supports are at 34000 and 33500 which can limit the downside.
DAX (15673.64, −19.63, -0.13%) tested 15800 as expected and has come-off from there. We keep our bullish view intact of seeing 16000-16100 on the upside in the coming weeks. Immediate support is at 15600 and the next one is at 15400. DAX has to fall below 15400 to get more selling pressure.
Nikkei (29375.94, +214.14, +0.73%) is heading up towards 29500 in line with our expectation. The upside can extend up to 30000. The long-term charts are giving bullish signals to see 32000-32500 and even higher levels in the coming months. As such the danger of seeing a fall to 27000-26000 is gradually getting negated.
Shanghai (3562.07, −27.68, -0.77%) has declined sharply today to test the lower end of its 3550-3625 range. It will have to be seen if it can bounce-back from here and keep the sideways range intact or not. A strong break below 3550 can trigger a corrective fall to 3500 and even lower before the overall uptrend resumes.
Sensex (52551.53, +76.77, +0.15%) and Nifty (15811.85, +12.50, +0.08%) have recovered sharply from their day’s low yesterday. The support at 52000 (Sensex) and 15600 (Nifty) is holding very well in line with our expectation and keeps the bullish view intact of seeing 53000-54000 on Sensex and 16000 and 16200-16500 on Nifty going forward.
COMMODITIES
Crude prices continue to trade higher and look bullish for the near term towards $75-77 (Brent) and $72-75 (WTI). Gold needs to sustain above crucial support at 1860 to keep the upside momentum intact else a fall towards 1820-1800 cannot be negated. Silver is likely to trade within 27-28.50 for the medium term before any break on either side is seen. Copper too needs to hold above 4.40 and see a sustained rise above 4.60 to negate a possible fall towards 4.20-4.00 in the near term.
Brent (73.06) and WTI (71.09) continue to trade higher and look bullish for the near term towards $75-77 o Brent and towards $72-75 on the WTI.
Gold (1863.20) is holding above 1860 just now which is an important support level and needs to hold and produce a bounce back towards 1880-1900 and higher in order to keep the bullish momentum intact. Else we may have to look for a fall towards 1820-1800 on the downside before any resumption of upmove is seen in the longer run.
Silver (27.75) trades lower today but while above 27, there is still some scope for a sideways ranged movement between 27-28.50. This range may hold for the medium term before a break on either side is seen to set the longer term direction.
Copper (4.4220) has broken below the trendline support at 4.50 and while Copper trades below the crucial resistance at 4.60, the price could be vulnerable to a sharp fall towards 4.20 or even lower towards 4.00. An immediate bounce from 4.40 is needed to take Copper above 4.60 to negate any possible fall below 4.40.
FOREX
Dollar Index trades below 90.60 just now and needs to sustain below 90.60 to avoid further rise. This is positive for Euro just now which has bounced from 1.21 and could possibly head towards 1.2150 in the near term. EURJPY and USDJPY have risen well and could soon target 134 and 110.30/50 in the near term. USDCNY has risen well too and a break above 6.41 can take kit higher towards 6.42. USDINR can head towards 73.50 if it breaks above 73.30 today. Aussie and Pound looks stable.
Dollar Index (90.493) looks stable too and is trading below immediate resistance at 90.60. While below 90.60, there is scope for a fall to 90 or lower else a rise to 91-91.50 cannot be negated in the medium term.
Euro (1.2123) has bounced slightly from 1.21 and while that holds, a rise to 1.2150 or higher looks possible just now. A break above 90.60 in Dollar Index could drag down Euro to levels below 1.21.
EURJPY (133.49) has bounced well from levels above 132.48 and could be ready to test 134 in the near term. While the upside momentum remains intact an eventual rise to 135-136 too can be seen shortly.
Dollar-Yen (110.08) has finally tested out expected 110 and now trades higher. While the rise above 110 is sustained, the pair may head towards 110.30/50 in the near term. Failure to face rejection from 110.30/50 will take the pair higher towards 111.
Aussie (0.7701) looks stable and while above immediate support near 0.7650, Aussie could attempt a bounce back towards 0.78. Watch price action near 0.7650 just now as a break below this would make Aussie vulnerable to a sharper fall towards 0.76-0.74 in the longer run.
Pound (1.4110) continues to remain stuck within the range of 1.4070-1.42 and is likely to trade within this range for some more time.
USDCNY (6.4050) has risen well and a break above 6.41 if seen could take it higher towards 6.4120-6.42 in the near term. Watch for a possible fall from 6.4120 else the pair could be bullish for the near term.
USDINR (73.2750) closed higher yesterday and if it manages to break above 73.30 today, we will have to allow for a possible rise to 73.50. Support is seen near 73.
INTEREST RATES
The US Treasury yields are moving up ahead of the US Federal Reserve meeting tomorrow. It will have to be seen if the yields can sustain above their crucial support at 1.4% (10Yr) and 2.1% (30Yr) after the Fed meeting tomorrow in order to avoid a much deeper fall. The German yields are bouncing from near their key supports as expected. We expect the yields to see a fresh rise in the coming days. The 10Yr GoI is stuck in a narrow range and can continue to consolidate for some more time before a fresh fall is seen from here.
The US 2Yr (0.16%), 5Yr (0.78%), 10Yr (1.49%) and 30Yr (2.17%) Treasury yields have moved up. View remains the same. The yields will have to sustain above 1.40% (10Yr) and 2.10% (30Yr) in order to avoid a deeper fall to 1.25%-1.2% (10Yr) and 1.9% (30Yr). While 1.40% (10Yr) and 2.10% (30Yr) holds, a fresh rise to 1.6%-1.7% (10Yr) and 2.3%-2.4% (30Yr) is possible again in the coming weeks.
The German 2Yr (-0.66%), 5Yr (-0.62%), 10Yr (-0.25%) and the 30Yr (0.30%) yields have bounced and keeps intact our view of seeing a fresh rise in the coming days. Our broader view is bullish to see a rise to 0% (10Yr) and 0.55% (30Yr) in the coming weeks. Supports are at 0.25% (30Yr) and -0.30% (10Yr).
The 10Yr GoI (6.0044%) remains stuck in a narrow range above 6%. Our view of seeing a break below 6% eventually and a fall to 5.95%-5.9% remains intact. 6%-6.02% (narrow) and 6%-6.04% (broad) is the range that can remain intact for some more time before the above mentioned fall happens.
