STOCKS
Dow is holding above 34500 and keeps alive the chances of testing the crucial 35000-35100 resistance zone. A strong rise past 35100 is needed to become more bullish and see further rise. DAX continues to oscillate inside the 15400-15800 range and remains mixed. We will have to wait for a breakout of this range to get clarity. Nikkei is coming down towards the crucial long-term support level of 28000 from where we expect it to bounce back again and keep the long-term uptrend intact. Shanghai retains its 3500-3625 range and can move up within this range in the coming days. Sensex has rise just above its 52000-53000 range and needs to sustain above 53000 to rise further while Nifty is yet to break the range 15600-15900 range on the upside. The price action today will need a close watch.
Dow (34681.79, +104.42, +0.3%) is managing to hold above 34500. This keeps alive the chances of rising past 34700 and test the crucial 35000-35100 resistance zone. A strong break/close below 34500 is needed to bring the Dow under pressure to fall-back towards 34000-33500 again.
DAX (15692.71, +181.33, +1.17%) continues to whipsaw around 15600 and remains mixed within its 15400-15800 range. We reiterate to wait and watch for a breakout of this range to get clarity on whether DAX can move up to 16000-16200 or fall to 15200-15000 from here.
Nikkei (28212.17, −154.78, -0.55%) has been coming down towards the crucial support level of 28000 – the crucial long-term support from where we expect it to bounce back again. While above 28000, the long-term uptrend will remain intact. In case of a break below 28000, Nikkei can see a deeper fall to 27000-26000. The price action at 28000 will need a close watch.
Shanghai (3535.57, −18.15, -0.51%) has risen back sharply yesterday. The support at 3500 is holding well and the 3500-3625 range remains intact. Whioe above 3500, a rise to 3600-3625 can be seen again in the coming days.
Sensex (53054.76, +193.58, +0.37%) has closed above 53000 yesterday. It has to be seen if it sustains above 53000 and gets a strong follow-through rise towards 54000. The price action today will need a close watch.
However, Nifty (15879.65, +61.40, +0.39%) is yet to breach 15900 which is needed to pave way for a fresh rise to 16000-16200 in the coming days. While below 15900, the 15600-15900 range can continue to remain in place.
COMMODITIES
Commodities trade lower today as they face rejection from respective resistances. Copper has fallen from 4.40 and could trade within 4.40-4.20 while Silver faced rejection from 27 and could test 25.80/50 before again bouncing back towards 26 or higher. Crude prices have fallen sharply as the $76-78 region held well on both WTI and Brent. Crude prices now have scope to fall towards $70. Gold can test 1780/60 before again bouncing back towards 1820 on the upside. Overall range of 1760-1820 may hold.
Brent (73.03) and WTI (71.73) fallen sharply in line with our broad expectations of seeing a fall from $75-77/78 on Brent and $75-77 on WTI. Brent has fallen sharply as expected. We had allowed for a possible test of $80 on the upside but the price ahs come down sharply from 78 itself. While below 74, scope of rising back towards 77/78 is reduced and we may look for lower levels in the near term. Brent and WTI both can fall towards $70 if the current dip sustains.
Gold (1797) has dipped yet again and may fall towards 1780/60. We continue to expect 1820-1760 to hold for the near term. In the longer run, a slow and steady rise above 1820 is possible taking the price higher towards 1860-1880.
Silver (25.96) too came off instead of heading higher towards 27-28. Resistance near 27 has held well and produced a fall which could test 25.80/50 before rising back in the medium term.
Copper (4.2850) has fallen sharply from 4.40 and could remain within 4.20-4.40 region for the medium term. Sideways trade within the mentioned range looks likely for now.
FOREX
Dollar trades strong pulling down Euro below 1.18, Aussie below 0.75 and Pound below 1.38. EURJPY is bearish and heading towards 130 while Dollar-Yen can test 110-109.50 before again bouncing back towards 111 or higher. Dollar Index is headed to test 93 from where a reversal looks possible. USDCNY trades higher and could head towards 6.48/50 before reversing. USDINR can attempt to test 74.80-75 while above 74.50. A break below 74.50 if seen can take it lower towards 74.40/20.
Dollar Index (92.74) has risen and is headed towards resistance near 93 which is likely to hold and produce a rejection. Watch price action near 93.
Euro (1.1791) has broken below 1.18 but has immediate support near 1.1770 which is likely to hold and produce a bounce back towards 1.1850 and higher eventually. Break below 1.1770 , if seen would be bearish for Euro towards 1.17 before finally reversing in the longer run. We currently do not expect any fall below 1.17.
EURJPY (130.38) has continued to fall and could test 130 in the near term before rising back towards 131-131.50 again in the next 1-2 weeks. Immediate view is bearish for EURJPY.
Dollar-Yen (110.57) has risen a bit but looks bearish for a test of 110-109.50 in the near term before bouncing back sharply towards 111 or higher in the longer run.
Aussie (0.7462) has been falling sharply and looks bearish for a fall to 0.7445 before any bounce is seen. Below 0.7445, Aussie can test 0.74.
Pound (1.3783) has fallen further and can hold above 1.3750 just now to bounce back towards 1.38. Failure to bounce from 1.3750 can take it lower towards 1.37 in the medium term.
USDCNY (6.4775) has risen well as expected. A rise above 6.48 is needed to turn further bullish on the pair else we may witness a dip back towards 6.46/44. Watch price action near current levels.
USDINR (74.62) came down sharply from 74.7850. If the fall sustains, we may expect a dip to 74.40/20 again today else a possible bounce from 74.50 back towards 74.80-75.00 cannot be negated. Watch price action near 74.50 to see if it manages to remain above it or breaks lower. Very broad range of 74.20-74.80 may hold for the next few sessions.
INTEREST RATES
The US Treasury yields have declined further and are coming to test their key supports at 1.9%-1.85% (30Yr) and 1.25%-1.2% (10Yr) as expected. The yields will have to bounce from these supports in order to avoid a deep fall. The German yields have come down further as expected. The view is bearish now and there is room to fall more from current levels. The 10Yr GoI has to break above 6.2% to move further higher. A sideways move between 6.1% and 6.2% is possible in the near-term.
The US 2Yr (0.21%), 5Yr (0.78%), 10Yr (1.31%) and 30Yr (1.92%) have declined further. The 30Yr has come down close to 1.9% and the 10Yr has broken below 1.35% as expected. 1.9%-1.85% (30Yr) and 1.25%-1.20% (10Yr) are the crucial levels to watch in the coming sessions. The yields will have to bounce from these supports in order to avoid a deeper fall. While these supports hold, a strong bounce back move to 2.1%-2.2% on the 30Yr and 1.4%-1.5% on the 10Yr is a possibility. We will have to wait and watch.
The German 2Yr (-0.69%), 5Yr (-0.60%), 10Yr (-0.30%), 30Yr (0.18%) yields have come down further as expected. The 30Yr is heading down towards 0.10% in line with our expectation. The 10Yr on the other hand can break -0.30% and fall to -0.40%- and -0.45% in the coming days. Our earlier bullish view has been negated.
The 10Yr GoI (6.1637%)has come-off from the high of 6.1839%. A break above 6.20% is needed to move further up towards 6.3%. A consolidation between 6.1% and 6.2% is possible for some time. While above 6.1% the outlook is bullish to see 6.3% on the upside.
