STOCKS
Dow has risen just above 35250 and while that sustains the rise to 36000 that we have been expecting can be seen in the coming days. DAX continues to hover at the upper end of its 15200-15800 range. We expect it to break the range on the upside and rise to 16000-16200. Nikkei can move up within its 27000-29500 range. Shanghai has room to move up and test 3580-3600 in the near-term. Sensex and Nifty continue to consolidate at higher levels. Outlook is bullish to break this consolidation on the upside and see a fresh rise from here.
Dow (35264.67, +162.82, +0.46%) has closed just above 35250. While this sustains the rise to 36000 that we have been expecting can happen in the coming days. Only a fall below 35000 will bring the Dow under pressure. But that looks less likely as seen from the charts. As such our broader bullish view is likely to remain intact.
DAX (15770.71, +25.30, +0.16%) continues to hover below 15800tested 15800. A strong rise past 15800 is needed to see the rise to 16000-16200 that we have been expecting. As mentioned yesterday, a fall below 15600 from here can drag the index down to 15400-15200 again and will keep the 15200-15800 range intact for some more time.
Nikkei (28069.28, +181.13, +0.65%) has risen just above 28000 and keeps intact our view of seeing a rise to 29000-29500 in the near-term. The 27000-29500 range remains intact. A sustained rise above 28000 will reduce the danger of seeing the deeper fall to 26000 that we had cautioned earlier.
Shanghai (3533.43, +3.50, +0.1%) has risen well above 3500 and can now head up towards 3560/3580 and 3600 in line with our expectation. As mentioned yesterday, a strong rise past 3600 is needed to become bullish again and negate the danger of falling back to 3400-3300. Price action at 3600 will need a close watch.
Sensex (54554.66, +151.81, +0.28%) continues to oscillate around 54500 and remains stable. Bullish view of seeing 56000 on the upside remains intact. Key support is in the 53500-53000 region which can limit the downside in case of a fall below 54000.
Nifty (16280.10, +21.85, +0.13%) is stuck between 16200 and 16350 over the last few days. Bias is bullish to see a strong break above 16350 and a rise to 16500-16600. Supports are at 16150-16000 and then at 15900-15800.
COMMODITIES
Crude prices have bounced a bit and could move up some more before falling back while Gold is stable near levels seen yesterday. Gold is bearish while below 1750 and could move back to test 1700 or lower soon. Silver has fallen and could test support near 23, which if breaks can make the price vulnerable to a fall towards 21-20. Copper can rise to 4.40 while support near 4.20 holds well.
Brent (70.66) and WTI (68.31) both have risen as immediate supports near 68 and 66 held respectively. The corrective bounce seen now could take Brent and WTI towards 72.50-73 and 70/71 respectively before again falling back in the medium term.
Gold (1732.60) is almost stable and we may expect a near term trade within 1700-1750/80 before a further decline is seen towards 1680/70 in the longer run. Immediate view is stable to bearish.
Silver (23.29) has dipped further and is headed towards support near 23. A break below 23, if seen is bearish for a fall towards 21-20 in the medium term.
Copper (4.3385) has risen slightly today. We continue to expect support at 4.20 to hold while the price can is slowly move back towards 4.40. a range of 4.40-4.20 can hold for now. Any break below 4.20 can make Copper vulnerable to a sharp fall towards 4.0-3.80 in the longer run.
FOREX
Dollar Index is strongly bullish opening up scope for a fall in Euro towards 1.17-.1.16. EURJPY can test 130.50 before falling off from there. Pound and Aussie look stable to bearish. Dollar Yen has broken above 110.50 and if it does not stop at 110.80/85, it may rise above 111 soon. USDCNY can rise to test 6.49/50 before falling while USDINR can rise towards 74.60/80 while above 74.40. On the downside 74.20/10 is immediate support.
Dollar Index (93.06) is trading above 93 and need to fall back from 93.30 to keep up hopes of a possible fall in the medium term. A rise on the flip side above 93.30 would make it bullish towards 94.0-94.50 in the medium term.
Euro (1.1723) has fallen and could test 1.17. Any break below 1.17 can drag it down to 1.16 before any bounce can be expected. View is strongly bearish.
EURJPY (129.70) has risen and if the rise continues, we may again test 130.0-130.50 before falling off again towards 129 or lower. Watch price action near crucial resistance at 130.50.
Dollar-Yen (110.61) has risen above 110.61 and could test 110.80/85 which may produce a short rejection. Failure to fall from 110.80/85 can take the pair higher towards 111-111.20. View is strongly bullish.
Aussie (0.7344) has risen a bit. While above 0.7320, view is bullish towards 0.7370. A trade of 0.74-0.73 for now looks likely.
Pound (1.3831) has continued to fall on dollar strength. A test of 1.38/37 is likely in the medium term before a bounce is seen.
USDCNY (6.4807) has risen and could head towards 6.49/50 before falling towards 6.45 again in the near term. A broad range of 6.45-6.50 is likely to hold for now unless a sharp break on either side is seen and sustained.
USDINR (74.4250) traded within 74.46-74.33 yesterday. On the upside we have crucial resistances near 74.60 and 74.80 which are likely to hold for the near term producing a fall back towards 74.40/20. While above 74.40, watch for a slow rise towards the respective mentioned resistances.
INTEREST RATES
The US Treasury yields continue to move up in line with our expectations. The 10Yr and 30Yr are at their key intermediate resistances. A rise past these resistances can see the corrective rally extending further in the coming days before resuming the broader downtrend. It will have to be seen if the Consumer Price Index (CPI) inflation data release today can provide the trigger to move up further. The German yields hover above their key supports. We expect a corrective rally from here in the coming weeks before a fresh fall is seen. The 5Yr GoI remains lower and has room to dip further from here and then bounce-back again.
The US 2Yr (0.24%), 5Yr (0.82%), 10Yr (1.35%) and the 30Yr (2%) Treasury yields have moved up further in line with our expectation. The 10Yr and 30Yr are at key levels of 1.35% and 2% respectively. As mentioned yesterday, a sustained rise above these levels can take the yields up to 1.4%-1.45% (10Yr) and 2.1%-2.2% in the coming days. Thereafter a fresh fall can be seen to resume the broader downtrend.
The German 2Yr (-0.75%), 5Yr (-0.73%), 10Yr (-0.46%) and 30Yr (-0.01%) yields continue to trade stable above their key supports. Our view remains the same. We expect the support at -0.45%/-0.40% (10Yr) and -0.05% (30Yr) to hold. A corrective rally to -0.30%/-0.25% (10Yr) and 0.10% (30Yr) in the coming weeks. Thereafter a fresh fall is possible.
The Indian 5Yr GoI (5.7421%) continues to trade lower and keeps intact our view of testing 5.7%-5.69% on the downside in the near-term. Thereafter a fresh bounce to 5.74% and even 5.78% is possible.
