STOCKS
Equities look mixed within their current consolidation with each index poised at different levels within their sideways ranges. Dow, Sensex and Nifty are poised at the upper end of their ranges while DAX and Nikkei have room to move up within their sideways range. Shanghai on the other hand has broken its sideways 3500-3625 range on the downside and is vulnerable to fall further before witnessing a fresh rise. We remain bullish to see an upside breakout of the ranges in Dow, DAX, Nikkei, Sensex and Nifty. It will have to be seen if the outcome of the US Federal Reserve meeting on Wednesday can provide the trigger to break the range.
Dow (35061.55, +238.20, +0.68%) has risen and is poised in the 35000-35100 resistance zone. We retain our bullish view of seeing a break above 35100 and a rise to 36000. Inability to break above 35100 now can continue to keep the index in the broad 33000-35100 range for some more time and the expected rise to 36000 will get delayed.
DAX (15669.29, +154.75, +1%) is moving up towards the upper end of its 15300-15800 range. The bias is bullish to see an upside breakout of this range and a rise to 16000-16200 eventually. The danger of seeing 15000-14800 that was cautioned last week stands reduced.
Nikkei (27931.78, +383.78, +1.39%) has opened with a gap-up and is likely to move up within the expected 27000-29500 range. As long as Nikkei remains above 27000, the broader view is bullish to break 29500 and rise to 31000 and higher levels over the medium-term. Only a break below 27000 will bring the danger of seeing a deeper fall to 26000.
Shanghai (3495.40, -55, -1.55%) has declined sharply and is trading below the 3500-3625 range. While this break sustains a fall to 3450-3400 is possible before a fresh rise is seen. While above 3400, the long-term view is bullish to see a rise to 3700-3800 eventually.
Sensex (52975.80, +138.59, +0.26%) has closed at the upper end of its 52000-53200 range (revised up from 52000-53000 mentioned last week). Our bias is bullish to see an upside break above 53200 and a rise to 54000 and higher levels going forward. It will have to be seen if the range breakout can happen immediately or after some more consolidation.
Nifty (15856.05, +32, +0.2%) is poised at the upper end of its 15600-15900 range. It is likely to break the range on the upside and move up to 16000-16200 in the coming weeks. Inability to breach 15900 can keep Nifty inside the 15600-15900 range for some more time.
COMMODITIES
Crude prices have risen but have resistances above current levels that could produce rejection and push down prices soon. While Gold and Silver look stable within 1820-1780 and 25-26 region, Copper has seen a sharp break on the upside from the long awaited 4.15-4.40 range. It can now head towards 4.60/80 in the coming days. Overall view is bullish for Copper which seems to be trading the strongest among all other commodities mentioned below.
Brent (73.90) and WTI (71.83) have both risen slightly. Brent can rise to 75-76 from where a rejection looks possible back towards 70 while WTI can face rejection from 74 that could push the price back to 68-66 levels soon. Watch price action over the next few sessions to see a possible rejection on both.
Gold (1806.00) is trading within the narrow range of 1820-1780 for now and unless an immediate break above 1820 is seen, it will be difficult for Gold to turn bullish. While below 1820, there is scope for a fall to 1780 before any bounce takes place.
Silver (25.33) has immediate support at 25 and resistance at 26. A range of 25-26 may hold for sometime before a break on either side of the range is seen. In the medium to longer run, a break below 25, if seen would take the price down to 24-23.
Copper (4.4510) has seen an upside break from the 4.40-4.15 region that we have been mentioning for the past 4-5 weeks. View is now bullish towards 4.60 which if manages to break could take it higher to 4.8. Support near 4.15/20 is holding strong for now.
FOREX
Dollar Index needs to break on either side of the 93.30-92.50 region to throw more directionally clarity while Euro seems to looks bearish and could break below 1.1770/50 soon. Only a rise above 1.18 can negate this possibility. EURJPY is ranged between 128.50-130.50 while Aussie and Pound looks bearish while below 0.74 and 1.38 respectively. Dollar Yen may trade within the narrow 110.80-110.0 region. USDCNY may rise sharply towards 6.49/50 or even higher. USDINR may remain within 74.40-74.60/70 today while there is possibility for a break below 74.40 to eventually head towards 74.20/74.00.
Dollar Index (92.89) is stuck below 93.30-93.00 and above 92.50, unable to decide which way to move from here. We would be in a wait and watch mode before any signal is seen on further direction from here. Watch for a break on either side of the 93.30-92.50 range.
Euro (1.1770) is falling from 1.1785 which seems to be an immediate resistance and could push Euro down towards 1.1750. Note that a range of 1.18-1.1750 is crucial just now as a break on either side would give clarity on further direction on the Euro. For now, trend looks bearish and a break below 1.1750, if seen would drag it lower to test 1.17. Watch price action near 1.18-1.1750 region.
EURJPY (129.90) is likely to remain within 130.30-128.50 region for the medium term. Only a break on either side will give more clarity on longer term direction.
Dollar-Yen (110.32) may hold within 110.80-110.00 for the very near term while downside support is seen near 109.50-109.00.
Aussie (0.7349) has dipped from 0.74 and while that holds, Aussie is bearish towards 0.73.
Pound (1.3746) has also come off from 1.3787 and Pound faces difficulty to rise above 1.38 immediately. A fall to 1.37 looks possible before a bounce back is seen. Immediate view is bearish while below 1.3787.
USDCNY (6.4808) has risen from levels seen last week but we need to see if it manages to fall back from 6.49/50 levels of manages to break on the upside, validating a possible triangle formation breakout. Watch for a possible break on the upside in the next few sessions. A fall from 6.49/50 would negate the mentioned possibility.
USDINR (74.4650) may hold within 74.40-74.60/70 but an eventual break on the downside towards 74.20/74.00 looks likely for the medium term.
INTEREST RATES
The US Treasury yields are managing to hold higher after the sharp bounce from the lows last week. There are good chances to see a corrective bounce in the coming weeks. It will have to be seen if the outcome of the US Federal Reserve meeting on Wednesday can provide the possible trigger to seeing this corrective rally. The German Yields have little room within their current fall and have supports coming up. We expect the yields to bounce from their supports going forward. The 10Yr GoI looks bullish to test 6.3%-6.32% amid muted trading. The 5Yr GoI can also move up on a break above 5.7%.
The US 2Yr (0.20%), 5Yr (0.70%), 10Yr (1.26%) and 30Yr (1.91%) Treasury yields are managing to hold higher after bouncing from the lows last week. Our view of seeing a corrective bounce remains intact. The 30Yr can move up to 2.1%-2.2% while it sustains above 1.9% and the 10Yr can rise to 1.45%-1.5% while above 1.2%. Thereafter a fresh fall can be seen to keep the broader downtrend intact.
The German 2Yr (-0.74%), 5Yr (-0.71%), 10Yr (-0.42%) and 30Yr (0.06%) remains lower and stable. The bearish view of seeing a test of -0.45%/-0.50% (10Yr) and 0%/-0.05% (30Yr) remains intact. Thereafter we expect the yields to reverse higher and see a corrective bounce within their broader downtrend.
The 10Yr GoI (6.2312%) has risen sharply above 6.2% on muted trading. It keeps alive the chances of testing 6.3%-6.32% on the upside. Thereafter a fresh fall is possible. A rise past 6.32% is less likely. The 5Yr (5.6852%) on the other hand can rise to 5.76% on a break above 5.7%.
