STOCKS
Sensex and Nifty have broken their sideways consolidation while the other equities still remain inside their range. As such, Sensex and Nifty are likely to outperform others and are bullish to move up further from here. Dow is at the upper end of its 33000-35250 range and needs to be seen if it can break 35250 from here and rise to 36000. DAX continues to remain unclear within its 15200-15800 range. Nikkei is holding on to its 27000-29500 range for now. Shanghai can move up towards 3500-3550 from here which will ease the danger of breaking below 3300.
Dow (35116.40, +278.24, +0.80%) has risen back above 35000 and needs to see if it can rise past 35250 from here which is needed to see 36000 on the upside. A strong break above 35250 from here will reduce the chances of seeing 34250-34000 cautioned yesterday. We will have to wait and watch. For now the 33000-35250 range remains intact and we retain our bullish view to see an upside breakout of this range.
DAX (15555.08, -13.65, -0.09%) continues to trade unclear at the middle of its 15200-15800 range. As mentioned yesterday, we see equal chances of either a rise to 15800 or a fall to 15200 from here. The broader bias is bullish to see an upside breakout above 15800 and a rise to 16000-16200 eventually.
Nikkei (27625.58, −16.25, -0.06%) is managing to hold above 27500 but is not gaining strength to move up strongly. A strong rise past 28000 is needed to gain momentum and move up within the 27000-29500 range. While below 28000, the danger is still alive of breaking below 27000 and see a fall to 26000.
Shanghai (3468.83, +20.84, +0.60%) sustains higher and can move up further to test 3500-3550 from here. As mentioned yesterday a strong rise past 3550 will be needed to negate the danger of seeing 3200 on the downside over the medium-term and bring back the earlier bullish view of seeing 3700-3800 on the upside.
Sensex (53823.36, +872.73, +1.65%) has surged breaking the 52000-53200 range on the upside as expected. This keeps our bullish view intact of testing 54000 immediately and also to see 56000 on the upside eventually going forward.
Nifty (16130.75, +245.60, +1.55%) has broken its 15600-15900 range on the upside as expected and has also risen past 16000. Our bullish view of seeing 16200 remains intact. A break above 16200 can take it further up to 16500 and even higher levels in the coming weeks.
COMMODITIES
Crude prices have fallen and could head lower in the near term while Gold and Silver are headed towards 1820 and 26 respectively which need to break to take prices further up in the near term. Copper has broken below 4.40 and if the fall sustains, it can fall further towards 4.30 soon. Watch price action to see if the price rises above 4.40 today. Overall crude and Copper looks bearish while Silver and Gold can move up slowly.
Brent (72.45) and WTI (70.41) have dipped as expected and could fall towards 70 and 69/68 respectively. Immediate view is bearish.
Gold (1817.50) is slowly inching up and a break above 1820 can take it higher to 1840/60 again in the near to medium term. While above 1800, view is bullish for Gold just now. Watch price action near 1820.
Silver (25.71) has risen well and could test 26 before pausing. Overall broad range of 24.50-26 holds well for now.
Copper (4.3880) dipped to 4.36 and has bounced a bit from there. A sustained trade below 4.40 would be an early indication of further bearishness towards 4.35/30 in the near term. Watch price action to see if it bounces back to levels above 4.40 or continues to trade lower.
FOREX
Dollar Index looks bearish while Euro, Aussie, Pound, Chinese Yuan have strengthened against the Dollar and looks to rise further towards 1.19, 0.75, 1.40+ and 6.45 respectively in the coming sessions. EURJPY tests 129.50 which can extend to 129 and keep the 129-130.50 range intact for sometime. Watch if USDINR breaks below 74.20 as it could then head towards 74.00
Dollar Index (91.99) trades just below 92 and needs to fall and break below 91.75 to gain some bearish momentum. View is bearish while below 92.25.
Euro (1.1874) is poised for a slow rise towards 1.19-1.1950 in the near term. View is bullish while above 1.1850.
EURJPY (129.48) has fallen to the lower end of the 130.50-129.50 range which can extend to 129 on the downside which if holds can then produce a bounce back towards 130-130.50 in the coming sessions.
Dollar-Yen (109.03) has come down to test 109 and if the pair fails to bounce back from here immediately, it could be vulnerable to a deeper fall towards 108.50-108 in the coming sessions. Watch price action near 109. Overall seeing the movement over the past few days, the pair looks strongly bearish. Any bounce from current levels could be short lived.
Aussie (0.7408) has finally broken above 0.74 and while it trades higher, a test of 0.75 would be the next target. View is bullish while above 0.74.
Pound (1.3928) is attempting to bounce and could re-test 1.40 soon on the upside. A break above that if seen would be bullish for the medium term. Watch price action near 1.40 in the coming sessions.
USDCNY (6.4633) fell back from 6.47 instead of rising higher but we do not negate a possible rise to 6.49 while the pair trades above 6.45. Overall a sideways range of 6.45-6.49 may hold for now.
USDINR (74.2850) held well above 74.20 yesterday but we would keep a close watch to see if 74.20 holds or breaks to pave way for 74.00-73.80 on the downside. Preference is to see a fall towards 74, any bounce from 74.20 today also could take it higher to 74.40/50. Watch price action near 74.20 today. Strength in Euro, Chinese Yuan and Nifty should be Rupee positive today.
INTEREST RATES
The US Treasury yields remain lower and are likely to dip further to test their key supports. We expect a corrective bounce from there within their broader downtrend. The German yields are also coming closer to their key supports within their current downtrend. A corrective rise is possible before a fresh fall is seen again. The 10Yr GoI has surged to 6.3% amid muted trading as expected and is likely to reverse lower in the coming days. The 5Yr GoI has little room to move up from here before reversing lower again.
The US 2Yr (0.17%), 5Yr (0.65%), 10Yr (1.18%) and the 30Yr (1.85%) Treasury yields remain lower. We expect the yields to test 1.1% (10Yr) and 1.8% (30Yr) in the near-term now within their overall downtrend. Thereafter a corrective rally to 1.45%-1.5% (10Yr) and 2.1%-2.2% (30Yr) is possible before the broader downtrend resumes again.
The German 2Yr (-0.78%), 5Yr (-0.75%), 10Yr (-0.48%) and 30Yr (-0.01%) yields remain lower and stable. Immediate supports are at -0.5% (10Yr) and-0.05% (30Yr) from where a short-term corrective bounce to -0.30%/-0.25% (10Yr) and 0.10% (30Yr) can be seen. Thereafter the broader downtrend can resume again.
The 10Yr GoI (6.3062%)had surged to test 6.3% as expected. We expect 6.3%-6.32% to be a cap on the upside and the yields to come down towards 6.2%-6.1% again. The 5Yr GoI (5.7336%) has room to test 5.74%-5.76% on the upside and then can fall-back again.
