STOCKS
Dow hovers near its key resistance zone of 35000-35100 which we expect to break if not immediately but eventually and see a fresh rise. DAX has come-off from 15800 and can continue to retain its 15300-15800 range. The upside breakout of this range is getting delayed. Nikkei is coming down and has room to fall further within its overall uptrend. Shanghai is retaining its 3500-3625 range. The bias is bullish to see an upside breakout of this range. Sensex and Nifty have broken their respective range on the upside and are looking bullish to see further rise towards 54000-56000 and 16000-16200 respectively. Sensex and Nifty are likely to outperform others.
Dow (34987.02, +53.79, +0.15%) hovers near 35000. Immediate support is at 34500 and the bias is bullish to break 35100 and see a rise to 36000. However, in case if the Dow breaks below 34500, a test of 34000-33500 is possible and the expected rise to 36000 will be delayed. The overall trend is up while the Dow remains above 33500.
DAX (15629.66, −159.32, -1.01%) has failed to break above 15800 and has come-off sharply yesterday. The 15300-15800 range can now continue for some more time. The bias is bullish to see an upside break above 15800 and a rise to 16000-16200 eventually.
Nikkei (27970.77, −308.32, -1.09%) is heading down towards 27500 as expected and can even test 27200-27000. While above 27000, Nikkei can consolidate between 27000 and 29500 and then see an upside breakout of this range eventually. But, in case of a break below 27000, Nikkei can see a deeper fall to 26000 before the overall uptrend resumes.
Shanghai (3558.24, −6.34, -0.18%) is managing to hold above 3500. The 3500-3625 range is likely to remain intact for some more time. The bias is bullish to see an upside breakout of this range and a rise to 3700-3800. In case if Shanghai breaks below 3500 a fall to 3450-3400 can be seen before a fresh rally begins. While above 3400, the long-term view is bullish.
Sensex (53158.85, +254.80, +0.48%) has broken the 52000-53000 range on the upside and is bullish to test 54000 initially and then further higher levels eventually in the coming weeks. A strong base has been built now above 52000 which will now be difficult to break in the absence of any strong and fresh trigger.
Nifty (15924.20, +70.25, +0.44%) has risen above 15900 and is indicating a triangle breakout. The view is bullish to see a rise to 16000-16200 in the coming weeks. Strong support is now in the broad 15800-15600 region.
COMMODITIES
Brent and WTI have trade lower and looks bearish for the medium term. Gold has dipped but may continue to rise towards 1840-60 in the medium term.Silver may break 26.50 and eventually head towards 27. Copper continues to consolidate within 4.40-4.20/15.
Brent(73.41) and WTI(71.33) has risen slightly after falling sharply yesterday. While Brent has managed to hold above support near 73, WTI has broken below 72 and may fall towards 71/70 in the near term. WTI may continue to fall towards 70/68 while Brent has scope to test 70 on a break below 73. A strong bounce is needed to take the prices higher towards respective resistances again.
Gold(1827.60) has come off slightly today after testing the level of 1835 yesterday. But overall bullish view remains to see a test of 1840-1860 in the coming sessions.
Silver(26.46) has risen sharply. A rise above 26.50 will pave way towards 27 in the near to medium term.
Copper(4.3385) has bounced back sharply, heading towards the upper end of the 4.15-4.40 range contrary to our expectation of a fall towards 4.15. The range of 4.15/20-4.40 may continue to hold and a strong break on either side of the range is now needed to give clarity on further direction.
FOREX
Dollar Index has risen sharply and could be headed towards 92.80-93 while Euro can re-test 1.1780/70-1.1750 on the downside. Aussie and Pound looks ranged. EURJPY and Yen looks weak towards 129 and 110.80 respectively. USDCNY can rise towards 6.48/50 while above 6.46. USDINR can rise to 74.60/80 but may come off from there towards 74.40/20 soon.
Dollar Index (92.60) has risen from levels seen yesterday and can test 92.80/85-93.00 on the upside before deciding whether to come off from there or continue to rise higher. Watch price action near 92.80/85-93 closely.
Euro (1.1807) has dipped back to test 1.18 and a break below 1.18 can again take it lower to test 1.1780/70 which is an important and immediate support followed by deeper support at 1.1750. We need a cose watch at these levels as any indication of a break below 1.1750 may be vulnerable for Euro for a strongly bearish sentiment for the medium to long term. Watch price action near 1.1780/70 and 1.1750 respectively.
EURJPY (129.91) can be headed towards 129. Thereafter a bounce to 130-130.50 could be possible.
Dollar-Yen (110) has bounced well from lower levels seen yesterday in line with the rise in Dollar Index. A range of 109.50-111 can hold for the near term. While the Dollar Index rises towards 92.85-93, Dollar-Yen can move up towards 110.50/80 too.
Aussie (0.7433) has bounced a bit but a sideways range of 0.74-0.75 may hold for some more time before a break on either side of the range is seen.
Pound (1.3830) is ranged within 1.39-1.3735 and may continue so for the near term.
USDCNY (6.4653) trades within 6.44-6.48/50 and needs a clear and sustained break on either side to indicate further direction from here. While above 6.44/46, immediate view is bullish towards 6.48/50.
USDINR (74.4850) can continue to hold within 74.40-74.60 and broad range of 74.20-74.80 region. While Euro and Chinese Yuan has weakened a bit against the Dollar, we may expect Rupee too to weaken a bit today towards 74.60/80 but may not sustain higher levels for long and could come off towards 74.40/20 in the medium term. Also watch if the rise above 15900 in Nifty sustains today as that may give some relief to Rupee weakness in the very near term. A fall in Nifty from current levels may add on to factors supporting Rupee weakness.
INTEREST RATES
The US Treasury yields remain lower and can dip further to test their crucial supports. A corrective bounce is possible in the coming weeks before the long-term downtrend resume breaking below the supports that are coming up. German yields remain lower and are keeping our bearish view intact. A further fall is possible in the coming days. The 10Yr GoI has support at 6.18% from where a bounce is possible before the overall downtrend resumes.
The US 2Yr (0.23%) and 5Yr (0.79%) Treasury yields remain stable while the 10Yr (1.31%) and 30Yr (1.93%) have dipped further. 1.25%-1.2% is a good support from where we can expect a corrective bounce to 1.5%. Similarly, the 30Yr can bounce from 1.9% to 2.1%. However, from a long-term perspective we expect the yields to break below the above mentioned supports and see a deeper fall eventually in the coming months.
The German 2Yr (-0.69%), 5Yr (-0.63%) and the 10Yr (-0.34%) yields have dipped slightly while the 30Yr (0.15%) has declined sharply below 0.20%. Our bearish view remains intact. The yields have room to test -0.45%/-0.50% (10Yr) and 0.10%-0.08% (30Yr) in the coming weeks. Thereafter a fresh bounce is possible
The 10Yr GoI (6.1915%) has dipped below 6.2% but has immediate support at 6.18%. While that holds a rise to 6.3%-6.32% is still a possibility. 6.3%-6.32% is a strong resistance which can cap the upside and can a fresh fall. The broader trend is down while the 10Yr remains below the 6.3%-6.32% resistance zone. The 5Yr (5.6910%) can trade in the range of 5.64%-5.7% with a bearish bias to break the range on the downside and test 5.6% eventually.
