STOCKS
Strong bounce in US equities on Friday and in the Asians early morning today. The Dow has risen above 34500 and needs to see if it can rise past 35100 from here which is needed to become strongly bullish. DAX has risen within its 15300-15800 range. Nikkei has bounced sharply above 28000 thereby easing the danger of seeing a fall to 27000-26000. Shanghai has risen back into its 3500-3625 range and can retain this range for some more time. Sensex and Nifty can also rise within its 52000-53000 and 15600-15900 range respectively.
Dow (34870.16, +448.23, +1.30%) had risen back sharply above 34500 again on Friday. The danger of seeing 34000-33500 on the downside that was mentioned on Friday has eased. 35000-35100 will be a crucial resistance zone which will have to be broken to move up further towards 36000. Inability to breach 35100 can drag it back to 34500 and can keep the chances alive of seeing 34000-33500 on the downside.
DAX (15687.93, +267.29, +1.73%) has risen back above 15600. We can expect a range of 15300-15800 (changed from 15400-15800 mentioned so far). A breakout on either side of this range will give a clear cue on whether DAX can move up to 16000-16200 or fall to 15000-14800 going forward.
Nikkei (28583.89, +643.47, +2.30%) has risen back well above 28000 again. It will have to be seen if it can sustain above 28000 which is needed to negate the danger of seeing 27000-26000 on the downside mentioned on Friday. While above 28000, a further rise to 29000-29500 in the near-term.
Shanghai (3557.06, +32.98, +0.94%) failed to sustain the break below 3500 on Friday and has risen back into the 3500-3625 range. While above 3500, the sideways range can continue for some more time and the fall to 3450-3400 stands reduced now.
Sensex (52386.19, −182.75, -0.35%) and Nifty (15689.80, −38.10, -0.24%) remained stable above the lower end of their 52000-53000 and 15600-15900 range respectively. We expect this range to hold and see a bounce within it this week.
COMMODITIES
Commodities have risen today.Brent and WTI have risen and have room to test the level of $77/78 and $75/77 before we see a fall from there. Gold has also risen above 1800 and near term view is bullish towards1820 and eventually 1840 on the upside . silver is bullish towards 26.50-27. Copper trades near the upper end of the range of 4.40-4.20 .We can see a pull back from the levels of 4.40 towards 4.20 again.
Brent(75.46) and WTI(74. 50) have risen slightly after falling sharply last week from respective resistances. Brent can now bounce back towards $77/78 which if breaks higher could extend a rally towards $80 followed by a dip towards $73-72 in the medium term. WTI can also test the level of $75/77 before we see a fall towards the level of $70.
Gold(1806.30) has risen above 1800 and could now rise towards 1820. Thereafter the price needs to sustain above 1820 to more up further in the medium term towards 1840/60. Immediate view is bullish.
Silver(26.25) has risen significantly and could rise towards 27 on a break above 26.50. The contract can range within 25.80-26.50-27.00 before we see an eventual break on either side.
Copper (4.3320) has risen within the previously mentioned range of 4.20-4.40.The contract can now face rejection near 4.40 and fall towards the lower end of the range. We may expect consolidation between 4.20-4.40 for some time before we see a break on either side.
FOREX
Dollar trades weak while Euro is headed towards 1.19 in the near term. Pound and Aussie have risen sharply and look bullish while EURJPY may test immediate resistance near 131 from where it can fall. USDCNY can dip towards 6.44. The strength in Chinese Yuan and Euro against the Dollar indicates some Rupee strength today towards 74.40/20 with upside capped at 74.80/60.
Dollar Index (92.166) has dipped well but may again attempt to bounce from 92. A break below 92 is needed for the index to set a medium term bearish sentiment. Else 92-93 could be the trade range for the near term.
Euro (1.1871) has risen well and could test 1.19 in the near term. A sustained break above 1.19 would be needed in the longer run for Euro to rally towards 1.1950 or even higher.
EURJPY (130.80) has risen well from 12962 seen least week. Immediate trend resistance is seen at 131 which if holds could push the pair down towards 129.60-129.00 again in the longer run. Watch price action near 131.
Dollar-Yen (110.16) has risen well from 109.53 seen last week. This has been in line with our expected support at 109.50 that we have been mentioning for quite sometime. While above 109.50, immediate view is bullish to see a rise towards 110 eventually.
Aussie (0.7476) rose to test 0.75 but has again dipped from there. While below 0.75, there is scope to see some ranged moves within 0.75-0.74 for a few sessions before a break on either side is seen.
Pound (1.3894) has bounced well too. While above 1.37, we may expect a test of 1.40 on the upside before another dip is seen. Overall broad range of 1.37-1.40 may hold for the next few weeks. Only a break below 1.37, if seen would turn it bearish.
USDCNY (6.4724) looks bearish and can fall below 6.46 in the near term towards 6.45/44 before bouncing to higher levels.
USDINR (74.6425) can test 74.40 today and a break below 74.40, if seen would negate a possible test of 75 and instead take the pair down towards 74.20. Upside could be capped at 74.80 in the near term.
INTEREST RATES
The crucial supports on the US Treasury yields have held very well as expected and the corrective bounce is happening in line with our expectation. There is room for the yields to move up further from here before a reversal is seen again. The German yields have bounced at the far-end on Friday but may not sustain. The view is bearish to see further fall in the coming days. The 10Yr GOI may remain volatile with the expected 6.1%-6.2% range for some more time. A breakout of this range is needed to get clarity on the direction.
The US 2Yr (0.21%), 5Yr (0.79%), 10Yr (1.36%) and 30Yr (1.99%) Treasury yields have risen back sharply on Friday. The 1.25% on the 10Yr and 1.9% on the 30Yr has held very well as expected and the corrective bounce has happened in line with our expectation. The 10Yr can rise to 1.4%-1.5% and the 30Yr has room to test 2.1%-2.2% on the upside while this bounce sustains.
The German 2Yr (-0.69%) and 5Yr (-0.60%) yields remain stable while the 10Yr (-0.29%), 30Yr (0.20%) have bounced slightly. The view is bearish. The 30Yr can fall to 0.10%-0.8% and the 10Yr has room to test -0.45% and -0.50% on the downside in the coming days.
The 10Yr GoI (6.1726%)had risen back sharply on Friday. The yield seems to remain volatile within our expected 6.1%-6.2% range. As mentioned on Friday, we will have to wait for a breakout on either side of this range to get clarity on whether the 10Yr GoI can move up to 6.3% or fall to 6% going forward.
