STOCKS
Equities are moving up in line with our expectation to test their key resistance. As mentioned last week a strong break above these resistances is needed to stage a fresh rally from here. Else some more consolidation is possible. Dow has to breach the 34700-35000 resistance zone to move up to 36000. DAX has to breach 15800 to test 16000-16100 on the upside. Nikkei has to sustain above 29000 and break 29500. Shanghai is trading inside its 3600-3625 resistance and needs to be seen if it can break 3625 now or not. Sensex and Nifty look relatively stronger than others to see a break above their respective resistances at 53000 and 15900 which can pave way for a fresh rise.
Dow (34433.84, +237.02, +0.69%) has moved up further on Friday and is heading towards 34700 in line with our expectation. As mentioned on Friday, the Dow has to breach 34700 and see a subsequent rise past 35000 to become more bullish to rise to 36000 levels. While below the 34700-35000 resistance, the chances of a fall-back to 34000 and even 33000 cannot be ruled out. The price action in the coming days will need a close watch.
DAX (15607.97, +18.74, +0.12%) oscillates around 15600 and needs to gain strength to move up towards 15800. Else a dip to 15400 is possible again and it will remain under pressure to break below it and fall to 15200-15000. That in turn will delay our expected rise to 16000-16100. For now 15400-15800 can be the range of trade with the bias being bullish to break 15800 and see a rise to 16000-16100.
Nikkei (29017.04, −49.14, -0.17%) sustains above 29000 but seems to lack strength to move up towards 29500 and 30000. The bias is however, bullish to see the rise to 29500-30000 and then break above 30000 to test 32000 on the upside over the medium-term. 28500 and 28000 are important supports. A break below 28000 (though less likely) will bring the danger of seeing a deeper fall to 27000 and lower levels.
Shanghai (3605.77, −1.79, -0.05%) has moved into the 3600-3625 resistance zone. It will have to be seen if it can break above 3625 which is needed to pave way for a further rise to 3700 and 3800. The price action in the coming days will need a close watch. Inability to breach 3625 can drag the index down to 3550 and 3500 again and keep it in the range of 3500-3625 for some more time.
Sensex (52925.04, +226.04, +0.43%) and Nifty (15860.35, +69.90, +0.44%) are keeping intact the chances high for breaking above their crucial resistances at 53000 and 15900 respectively. Such a break will pave way for a fresh rise to 54000 (Sensex) and 1600-16200 (Nifty). However, while the above mentioned resistances hold, the indices can consolidate sideways. 52000-53000 (narrow) or 51000-53000 (broad) can be the range for Sensex and 15600-15900 (narrow) or 15400-15900 (broad) for Nifty.
COMMODITIES
Crude prices have risen well and could continue to move up towards crucial resistances in the near term. Watch $75 on WTI and $77/80 on Brent which could cap the immediate upside. Gold and Silver are likely to be ranged within $1760-1800 and $25.80-26.50 respectively for the near term. Copper has dipped a bit but is likely to hold within 4.50-4.10 region in the near term.
Brent (76.27) has risen sharply and could test $77 which if breaks higher could take Brent to $80 soon from where a decline is expected in the medium term. WTI (74.16) on the other hand is headed towards immediate resistance at $75which if holds could produce a rejection towards $73-70. This if seen would limit further upside for Brent too in the near term. Watch price action near $75 on WTI.
Gold (1771.80) continues to trade within 1760-1800 region and shows no immediate signs of a rise to higher levels. Watch immediate support near 1760 which if holds could keep the immediate range intact. A maximum fall to 1740 can be seen in the near term. View is ranged for Gold just now.
Silver (25.90) remains ranged within 26.50-25.80 and needs to break on either side to give clarity on further direction. Overall broader range of 25-27 is likely to hold for the medium term.
Copper (4.2710) has dipped from levels seen on Friday. While immediate resistance near 4.50/40 holds a decline to 4.20/10 can be possible. A range of 4.10-4.50 can hold for the very near term.
FOREX
Dollar Index may limit its rise to 92 which if breaks on the upside could take it towards 93 in the medium term which would indicate weakness for most currencies globally. Aussie and Pound look to decline in the very near term. EURJPY looks weak along with possible weakness in Euro towards 1.1850 if Dollar Index breaks above 92. USDCNY may rise towards 6.46/48 while above 6.44. USDINR coud be ranged within 74.30-74.00/73.90 in the near term.
Dollar Index (91.86) has bounced well from 91.52 and could be headed towards 92 soon. Any break above 92 would indicate further upside towards 92.40 which would drag down Euro and indicate weakness for most other currencies. Watch price action near 92 in the near term.
Euro (1.1923) did rise to 1.1975 on Friday but could not sustain higher and instead came back sharply to head towards 1.19 again. Euro is bearish while below 1.1975-1.20 and while that holds, a fall to 1.19-1.1850 cannot be ruled out in the sessions to come. A break below 1.19 would be the initial signal of the expected fall.
EURJPY (132.01) may continue to fall while below immediate resistance near 132.70-132.50 . A test of 131.50 or lower can be possible within the current decline.
Dollar-Yen (110.68) tested 111 last week but has not been able to sustain higher and declined from there instead. 110-109.50 is an important near term support region which if holds could produce a sharp bounce taking the pair eventually above 111 towards 112-112.50. Else a break below 109.50 needs to be seen to indicate bearishness for the medium term.
Aussie (0.7586) could not sustain the rise above 0.76 seen last week. While below 0.76, a dip to 0.7550 is possible before again bouncing to higher levels.
Pound (1.3885) has bounced slightly from 1.3870 and the bounce needs to sustain in order to take Pound back to 1.39 or higher. Failure to break above 1.39 would drag it lower keeping the broad bearish view intact towards 1.38 eventually.
USDCNY (6.4597) has bounced from 6.4490 and if the bounce continues, we may expect a rise to 6.46/48 in the near term. View is bullish while above 6.44.
USDINR (74.2150) is likely to remain within 74.30-74.00/73.90 region for now. Any break on either side would trigger fresh moves for the medium term. For today, we may expect stable movement.
INTEREST RATES
The US Treasury yields have moved up at the far-end (10Yr and 30Yr). There is room to rise further and test their key resistances before reversing lower again. The German yields have moved up across tenors and are keeping our bullish view intact. The yields can rise further. The 10Yr GoI remains stable and can trade in the 6%-6.06% range before breaking below and resuming the overall downtrend.
The US 2Yr (0.26%) and 5Yr (0.92%) Treasury Yields remain stable while the 10Yr (1.53%) and 30Yr (2.13%) have inched up further. While above 1.5%, the 10Yr can rise to 1.6% in the near-term. But a rise past 1.6% could be difficult and the 10Yr can reverse lower and remain in the range of 1.4%-1.6%. The 30Yr on the other hand can test 2.2%-2.25% and turn around again. Broadly the 10Yr can remain in the range of 1.4%-1.6% (narrow) or 1.3%-1.7% (broad) and the 30Yr in 1.9%-2.25% in the coming weeks with a bearish bias to break the range on the downside eventually.
The German 2Yr (-0.66%), 5Yr (-0.55%), 10Yr (-0.16%), 30Yr (0.34%) yields have moved up sharply and keeps our bullish view intact. The 10Yr has room to move up towards -0.10% initially and then 0% eventually. The 30Yr can test 0.40% and a break above it will pave way for a further rise to 0.55% going forward.
The 10Yr GoI (6.0342%) has closed just above 6.03%. While it sustains above 6.03%, the 6%-6.06% (broad) range will come into play and the yield can move upto 6.06% in the coming days. A dip below 6.03% can continue to keep the 10Yr GoI in the narrow range of 6%-6.03% for some more time. The broader view is negative and we expect the 10Yr to break below 6% eventually and fall to 5.95% and 5.9% in the coming weeks.
