STOCKS
The Dow and Dax trade lower while Asian indices look strong. Dow and Dax could rise while supports at 35250 and 15800 holds respectively. Nikkei and shanghai have risen well and could continue to rise in the near term towards 28000 and 3500 in the near to medium term. Nifty and Sensex are trading strong too but could see a short corrective dip before resuming the uptrend.
Dow (35343.28, -282.12, -0.79%) has fallen sharply after the release of the US retail sales data yesterday. Immediate support is seen at 35250 which if hold could produce a bounce again in the near term. Failure to hold above 35250 can rag the index lower towards 34750.
DAX (15921.95, -3.78, -0.024%) has immediate support near 15800 which if holds can produce a bounce back towards 16000-16200 in the medium term. For now, we may expect some range movements above 15800.
Nikkei (27579.84, +155.37, +0.57%) has risen today and is heading towards 28000. While the support at 27250 holds we can see a test of 28000 in the coming sessions. A strong break above 28000 will be needed to be bullish towards 29000 and negate the view of seeing a dip towards 27000-26500.
Shanghai (3467, +20.02, +0.58%) has risen back again after seeing a fall towards 3438.12. While above 3400 the view is bullish to see a test of 3500 and eventually 3600 in the coming days.
Nifty (16614.60, +51.55, +0.31%) rose sharply yesterday and needs to sustain above 16600 to move up towards 16700/800 eventually. Failure to rise from current levels could lead to a corrective dip which can be limited to 16400/350 on the downside.
Sensex (55792.27, +209.69, +0.38%) is heading towards 56000. Any corrective dip, if seen could be limited to 54500.
COMMODITIES
Commodities have dipped slightly due to fall in US retail sales data released yesterday. Brent and WTI look bearish towards $65 while Gold and Silver have dipped from interim resistances near 1800 and 24 respectively. A range of 1810-1750 and 24.50-23 looks likely for the medium term. Copper needs to bounce from immediate support at 4.20 else could be vulnerable for a fall towards 4.0-3.8.
Brent (68.99) and WTI (66.33) continue to trade lower and can fall to test $65 in the near term.
Gold (1791.60) has come down slightly as expected after testing 1800 on the upside. Immediate resistance is seen near 1800-1810 which is likely to hold and produce a deeper fall towards 1780/60 in the coming sessions. While above 1760/40, uptrend remains intact.
Silver (23.75) tested 24 before coming off from there. Resistance is seen at 24 and higher at 24.50 which may hold for the near term to produce a fall towards 23.
Copper (4.2335) fell sharply to test 4.20 as expected and if it manages a bounce today, it can rise towards 4.30/40 again else could be vulnerable to a sharp fall in the near term towards 4.0-3.80. Watch price action near 4.20 for now.
FOREX
Dollar Index has bounced well dragging Euro down to 1.17. We need to see if the Dollar Index can manage to rise above 93.30 or come off from there back to 92.50 and lower. This would be important. Euro can turn bullish again only on a rise above 1.1750. Aussie, Pound and EURJPY have risen from respective lows and need to sustain the bounce in order to keep the upmove intact else the bounce could be corrective and could lead to a fall again in the medium term.
Dollar Index (93.047) has risen sharply after the release of the US Retail sales. We need to see if the index manages to rise above 93.30 again or fall from there. A rise above 93.30 if seen can be bearish for Euro and most other currencies.
Euro (1.1720) tested 1.17 and bounced back well from there. A rise to 1.1750 looks possible in the near term. A break above 1.1750 is needed for Euro to turn bullish again.
EURJPY (128.41) has bounced slightly from 128.22 and if the bounce sustains, we may expect a rise to 129 initially and slowly towards 130.50.
Dollar-Yen (109.56) has bounced back well from interim support at 109 in line with our expectations and could again head towards 110-110.50 before reversing from there.
Aussie (0.7312) has broken below the mentioned support at 0.7325. While the fall sustains, Aussie can extend towards 0.7290-0.7250 soon before bouncing back.
Pound (1.3754) has bounced from 1.3726 but could be limited to 1.38 on the upside before again falling lower. Immediate view is bullish within a downtrend.
USDCNY (6.4836) tested 6.4868 before slightly coming off from there. The pair may fall towards 6.47 again before attempting to bounce back.
USDINR (74.37) has held above 74.20 yesterday to bounce higher and while that continues, we may expect a rise to 74.50 on the upside or even towards 74.80 in the coming sessions. Note that above 74.40/50, the next important resistance to look at will be 74.80.
INTEREST RATES
The US Treasury yields remain lower and stable and keep alive the chances of a further fall from here. The 10Yr has to rise above 1.35% and the 30Yr above 2% to avoid the above mentioned fall. The German yields continue to hover above their key supports. We expect them to see a corrective rally in the coming weeks before resuming the broader downtrend again. The 5Yr GoI has declined below 5.7% and is now bearish to test 5.66% in the near-term.
The US 2Yr (0.21%), 5Yr (0.77%), 10Yr (1.26%) and the 30Yr (1.92%) Treasury yields continue to remain lower. We retain our view of seeing a test of 1.18% on the 10Yr while below 1.35% and 1.85%-1.8% on the 30Yr on a fall below 1.9%. As mentioned yesterday, the 30Yr has to rise sharply above 2% and the 10Yr above 1.35% (revised higher from 1.3% mentioned yesterday) to bring back the chances of seeing 1.4%-1.45% (10Yr) and 2.1%-2.2% (30Yr) on the upside.
The German 2Yr (-0.75%), 5Yr (-0.73%), 10Yr (-0.47%) and 30Yr (-0.03%) yields remain stable and lower. The view remains the same. -0.45%/-0.50% (10Yr) and -0.05% (30Yr) are the key supports which we expect to hold and produce a corrective rally to -0.30%/-0.25% (10Yr) and 0.10% (30Yr) in the coming weeks. Thereafter the broader downtrend can resume again.
The 5Yr GOI (5.6948%) broke below 5.7% yesterday contrary to our expectation to remain in the range of 5.7%-5.8%. While below 5.72%, the outlook will now be bearish to test 5.66% and even 5.64%-5.62% in the coming days.
