STOCKS
Equities remain higher within their consolidation range and can move up towards the upper end of their range. As mentioned yesterday, the bias now is bullish to see an upside breakout of the range eventually. Dow can test 35000-35100 and a break above it will pave way for 36000. DAX can rise to 15800 on a break above 15600. Nikkei is closed today. Shanghai oscillates within its 3500-3625 range. Sensex and Nifty are moving up within their 52000-51000 and 15600-15900 range respectively.
Dow (34823.35, +25.35, +0.07%) sustains higher and has room to test 35000-35100 on the upside. Our view is bullish to see a break above 35100 and test 36000. But, while 35100 holds, a consolidation between 33000 and 35100 can be seen for some more time before a break above 35100 happens.
DAX (15514.54, +92.04, +0.60%) has moved up further. As mentioned yesterday, a break above 15600 will pave way for a revisit of 15800 and will keep the chances high of seeing 16000-16200 from here itself. A fall below 15400 will bring back the danger of seeing 15000-14800 on the downside first before seeing 16000-16200 on the upside.
Nikkei (27548) is closed today.
Shanghai (3569.70, +7.04, +0.20%) has dipped within its 3500-3625 range today. The sideways remains intact and our bias is bullish to see a break above 3625 and a rise to 3700-3800 eventually.
Sensex (52837.21, +638.70, +1.22%) has risen within its 52000-53000 range as mentioned yesterday. We retain our bullish view of seeing a break above 53000 and a rise to 54000 and higher levels going forward. Supports are at 52000 and 51000.
Similarly, Nifty (15824.05, +191.95, +1.23%) has moved up within its 15600-15900 range as expected. The broader outlook is bullish to break 15900 and rise to 16000-16200. Key supports are at 15600 and 15500.
COMMODITIES
Crude prices have risen and could test immediate resistance above current levels from where a fall can be seen soon. Gold has scope for a fall towards 1780 while within the 1820-1780 range. Silver and Copper trade higher today and needs to sustain to test 26 and 4.40 before coming off from there. If Copper manages to break above 4.40, it can head towards 4.60 in the medium term.
Brent (73.64) has risen above 72.50 mentioned yesterday and could have scope for a re-test of 74-76 zone before facing another rejection from there. WTI (71.74) is up too and could rise to 72-74 before again facing rejection.
Gold (1803.80) is holding above 1800 but while the Dollar rises and attempts to head towards 93 again, Gold has fair scope to fall to support near 1780. Any break below that will be triggered by a sharp surge in dollar Index beyond 93.30 which would then indicate fresh bearishness for Gold in the longer run. But for now, we may expect a possible fall to 1780 before a bounce is seen again. 1820 continues to hold on the upside keeping a near term range of 1820-1780.
Silver (25.41) had risen to 25.54 but has come down slightly from there now. While above 25, we may expect a rise towards 26. Failure to sustain above 25 in the near to medium term will drag it lower towards 24.
Copper (4.3585) has attempted to break above the 4.15-4.30 range but needs to break above 4.40 to turn bullish for the medium term towards 4.60.
FOREX
Dollar Index has risen and heads towards 93-93.30. Euro is stuck within the 1.1750-1.1830 range and is not clear which side to break. We would wait for more clarity on further direction. EURJPY may fall towards 129 while below 130. Dollar Yen may remain ranged within 110.80-109.00. Aussie and Pound looks bullish for the near term. USDINR can test 74.20 while resistance at 74.60 holds well for now.
Dollar Index (92.85) has risen sharply from yesterday’s low of 92.50. Immediate range of 92.50-93.30 may hold for the near term within which the index can attempt to rise over the next few sessions. Any break above 93.30 would be indicative of medium to long term bullishness.
Euro (1.1771) is oscillating within 1.1750 and 1.1830, unable to decide which way to go and we have to wait to see a break out on either side. We may expect sideways consolidation for a few more sessions.
EURJPY (129.78) is likely to remain within 130-128.50 region and a break on either side of the range is needed for the cross to give clarity on further direction from here.
Dollar-Yen (110.23) is likely to hold within 110.80-109.00 region for the near term. Any break on either side will give more clarity on further movement from here.
Aussie (0.7379) is holding well above 0.73 and can rise towards 0.75 eventually. Immediate view is bullish while above 0.73.
Pound (1.3762) is heading towards important level of 1.38 from where a rejection looks possible which can drag down Pound to 1.37 again. Sustained rise above 1.38 can be a bit of a surprise which would then pave way for a rise towards 1.39 eventually.
USDCNY (6.4709) is likely to move up within the 6.45/45-6.49/50 region and eventually break on the upside soon. Failure to rise from current levels could keep it above 6.44 within a narrow trade.
USDINR (74.4650) came down sharply yesterday to test 74.33 before bouncing back from there. A test of 74.20 is possible on the downside while resistance near 74.60 holds. Any break below 74.20 would be further bearish towards 74.00-73.80 in the longer run. For now, watch support at 74.20.
INTEREST RATES
The US Treasury yields have dipped slightly but remain well above their key supports. While above the support, we expect the Treasury yields to see a corrective bounce in the coming weeks and then resume the broader downtrend. The German yields remain bearish and have come down further as expected. There is little room to test their intermediate supports from where we expect a corrective bounce going forward. The 5Yr GoI has risen back above 5.64% contrary to our view of testing 5.6% on the downside. It can now remain in the range of 5.66%-5.7% for a few sessions.
The US 2Yr (0.20%), 5Yr (0.72%), 10Yr (1.28%) and 30Yr (1.92%) have dipped slightly across tenors. Our view remains the same. While above 1.9%, the 30Yr can see a corrective rise to 2.1%-2.2%. Similarly the 10Yr can test 1.45%-1.5% while it sustains above 1.2%. Thereafter the broader downtrend can resume.
The German 2Yr (-0.73%), 5Yr (-0.71%), 10Yr (-0.43%) and 30Yr (0.05%) have come down further in line with our expectation. The 10Yr and 30Yr are coming closer to their key support at -0.45%/-0.50% and 0%/-0.05%. We expect these supports to hold and the yields to see a corrective bounce in the coming weeks.
The 10Yr GoI (6.2021%) oscillates around 6.2% with muted trades. The 5Yr (5.6814%) has risen back sharply above 5.64% again thereby reducing the danger of seeing 5.6% on the downside. We expect it to remain in the range of 5.66%-5.7% in the near-term.
