STOCKS
Equities remain broadly stable and are attempting to rise from current levels. The indicies will have to break above their near-term resistance to gain bullish momentum. Dow has to rise above 34000 and can rise to 34700. A strong rise past 35000 is needed to become bullish again. DAX can consolidate between 15400 and 15800 for some time before moving up to 16000-16200. Nikkei has to break above 29500 and Shanghai has to breach 3625. Sensex and Nifty have resistances at 53000 and 15900 which have to be broken to see further rise. While these resistances hold, a sideways consolidation is possible for some time.
Dow (34196.82, +322.58, +0.95%) has risen above 34000 and can now test 34700. A break above 34700 and a subsequent rise past 35000 is needed to become more bullish again to see 36000 levels. While 34700 holds, a pull-back to 34000 and 33500 again cannot be ruled out. The price action at 34700 will need a close watch.
DAX (15589.23, +132.84, +0.86%) has bounced back after having fallen sharply below 15600 on Wednesday. A rise above 15600 again from here will ease the danger of breaking below 15400 mentioned yesterday. In that case DAX can remain in the range of 15400-15800 for sometime. The broader view is to see a break above 15800 and a rise to 16000-16100 eventually going forward.
Nikkei (29093, +217.77, +0.75%) has risen above 29000 and can head up towards 29500 as expected. Immediate outlook is bullish. A break above 29500 can take it up to 30000 initially and then to 32000 eventually over the medium-term. It will also negate the danger of falling below 28000.
Shanghai (3584.10, +17.45, +0.49%) is moving up towards 3600 as expected. Inability to breach 3600 can keep the index in the range of 3500-3600 for some time. It will also keep alive the chances of seeing 3450-3425 on the downside before the broader uptrend resumes. Shanghai has to break above 3625 decisively to indicate the resumption of the uptrend and rise to 37000-3800 in line with our expectation.
Sensex (52699, +392.92, +0.75%) and Nifty (15790.45, +103.50, +0.66%) have bounced back well yesterday. 53000 on Sensex and 15900 on Nifty are important levels which will have to be broken to see a rise to 54000 and 16000-16200 respectively. While below 53000 Sensex can remain in the range of 52000-53000 (narrow) or 51000-53000 (broad). Similarly, Nifty can consolidate in the range of 15600-15900 (narrow) or 15400-15900 (broad) while below 15900.
COMMODITIES
Crude has risen and could continue to rise towards next resistance levels of $77 (Brent) and $75 (WTI) while Gold looks stable and could be ranged within 1760-1800 for the near to medium term. Silver has risen well and while above 26, it can test 26.50 before pausing. A narrow range of 25.80-26.50 may hold for now within the broad range of 25-27. Copper can test 4.40/50 while above support at 4.0/4.10.
Brent (75.64) and WTI (73.39) have risen further and could continue to rise towards immediate resistances near $77 and $75 respectively from where a short corrective dip could be possible.
Gold (1778.90) is slightly up. The range of 1760-1800 could continue to hold for the near term. While below 1820/00, Gold could remain ranged.
Silver (26.15) has moved up above 26 and could head towards 26.50 before seeing a corrective dip from there. Broad range of 25-27 and narrow range of 25.80-26.50 could hold for the near term.
Copper (4.3210) has risen well and has scope to rise towards 4.40/50 in the near term. On the downside, support near 4.10-4.0 is likely to hold for now.
FOREX
Dollar Index has dipped slightly bringing up Euro and other currencies up today. Euro trades above 1.1925 and can head towards 1.1950-120 while Aussie has also risen slightly. Pound on the other hand remains weak along with a stable EURJPY. Dollar-Yen has fallen below 111 and can test 110.35 in the near term before again rising from there. USDCNY has fallen again and may bounce from 6.45/44 to be seen in the near term. USDINR may remain ranged within 74.30-74.00. Bias is tilted towards Rupee strength today as Euro and Chinese Yuan both trade strong.
Dollar Index (91.77) has dipped, bringing up Euro and other currencies slightly up. A test of 91.50 looks possible before a bounce from there is seen.
Euro (1.1939) has risen further and could be headed towards 1.1950-1.20 in the near term.
EURJPY (132.36) looks stable just now. We need to see if it manages to rise above 132.50 in the near term to head higher towards 133-134 or remains within the 132.50-131 region for some more time. Watch price action near current levels.
Dollar-Yen (110.87) has fallen below 111 and while the fall sustains, a test of 110.35 can be possible before again bouncing back from there. Only a break above 111, if seen again would bring in further bullishness towards 112-112.5 into the picture.
Aussie (0.7589) is inching up slowly and steadily. An eventual rise to 0.76 looks possible soon.
Pound (1.3931) has dipped slightly and can test 1.39/38 on the downside before bouncing back from there. A range of 1.38-1.40 could continue to hold for now.
USDCNY (6.4668) continues to dip today also and could test 6.45/44on the downside before again bouncing back to higher levels of 6.48. Immediate view is bearish.
USDINR (74.1650) may not rise above 74.30/40 today also and could remain ranged within 74.0-74.30/40 with most of the time likely to spend at lower levels. This could be mainly because the Euro and Chinese Yuan has strengthened a bit and could impact the Rupee positively.
INTEREST RATES
The US Treasury yields remain stable and have chances to move up in the near-term within their expected sideways range. German yields remain bullish to move up further from current levels. The 10Yr GoI can continue to remain stable and consolidate above 6% before a fresh fall below 6% is seen.
The US 2Yr (0.27%), 5Yr (0.91%), 10Yr (1.50%) and 30Yr (2.11%) Treasury yields remain stable. There is a chance for the 10Yr and 30Yr to move up towards 1.6% and 2.2% from here within the expected range in the near-term. However, broadly, they are likely to remain in the range of 1.4%-1.6% (narrow) or 1.3%-1.7% (broad) in the coming weeks. The bias is bearish to see the yields breaking these ranges on the downside eventually.
The German 2Yr (-0.66%), 5Yr (-0.57%), 10Yr (-0.19%), 30Yr (0.30%) continue to trade stable. View remains the same. While above the supports at -0.30% (10Yr) and 0.25% (30Yr) the outlook is bullish to see a rise to 0% (10Yr) and 0.55% (30Yr) in the coming weeks.
The 10Yr GoI (6.0122%) remains stable inside the 6%-6.03% range. A break below 6% is needed to trigger the expected fall to 5.95% and 5.9%. While above 6% the yield can remain stuck in the range of 6%-6.03% (narrow) or 6%-6.06% (broad) before the above mentioned fall below 6% happens.
