STOCKS
Equities are mixed. Dow has dipped while Dax trades slightly higher and could decline after testing interim resistance. Nikkei and shanghai trade lower today but could be overall ranged for now. Shanghai can rise if 3500 holds. Nifty and Sensex have resistance near 17000 and 57000 which may hold and produce a fall in the near term.
Dow (35399.84, -55.96, -0.16%) seems to be holding well below 35500 and struggling to rise above that over the past 4-sessions. A sustained break above 35500 if seen will be bullish towards 35750 else failure to rise past 35500 will keep it ranged within 35500-35250 for a few sessions while further downside to 35222-34750 can also be tested in a corrective decline. Watch price action near 35500 for now.
DAX (15887.31, +35.56, +0.22%) is trading higher and has some scope to rise towards 16000 which if breaks will open up further chances of a rise to 16200 in the longer run. 15600 is an important trend support that may hold for now.
Nikkei (27735.34, -53.95, -0.19%) has decline from resistance at 28000. While below 28000, view is bearish to see a further decline towards 27500-27250 before a bounce sets in.
Shanghai (3503.84, -24.31, -0.69%) is likely to hold above 350 and bounce back to 3560 on the upside but if it fails to sustain above 3500, we may have to allow for a fall to 3480-3460 before a bounce is seen.
Nifty (16931.05, +225.85, +1.35%) has risen sharply yesterday. We need to be cautious today to see if 17000 produces a sharp rejection towards 16700-16500 in the near term before again resuming the uptrend. On the contrary, any rise above 17000 if seen and sustained would be surprising and keep the bullish momentum on for the rest of the week.
Sensex (56889.76, +765.04, +1.36%) is likely to face rejection from 57000 that could push it down to 56000 in the near term.
COMMODITIES
Crude prices are holding below immediate trend resistances near 74 and 70 on Brent and WTI respectively and is likely to hold and decline in the near term while Gold trades below 1820 still trying to gather some momentum that could help to break above 1820 and move up which if fails could lead to a fall back to 1800. Silver is headed to 24.50-25 while Copper is bearish while below 4.40.
Brent (71.78) and WTI (68.76) have both fallen from higher levels seen yesterday and if it sustains, we may expect the dip to extend towards 70-68 and 65-60 respectively. Immediate resistances near 74 on Brent and 70 on WTI are likely to hold for the next few sessions. View is bearish.
Gold (1816.00) has dipped from 1820 and while that holds, Gold can fall back to 1810-1800. A sustained break above 1820 is needed to take price higher towards 1840/60 in the medium term.
Silver (24.06) has risen in line with our expectations to test 24.View is bullish towards 24.50-25.
Copper (4.3505) has come down from 4.38 and while the price holds below 4.40, we are bearish on the view to see 4.30/25 in the near term.
FOREX
Although the euro trades higher and dollar Index has dipped, there is lack of follow-through selling seen in the Dollar Index that may lead to a pause or a turnaround in the index soon. We would wait and watch price action near current levels. EURJPY can rise towards 130-130.50 in the near term before falling from there. USDCNY can trade between 6.45-6.48. We need to see if USDINR can fall below 73.25/20 to test 73-72.90 or rise to 73.60
Dollar Index (92.5930) has broken below 92.75 and is trading lower. Immediate trend support is broken but unless we see follow-through selling, there is scope for a bounce back in the index from 92.47/40 in the near term. We would wait and watch price action near current levels.
Euro (1.1814) sustains to trade higher. We need to be cautious near 1.1830-1.1850 that could produce a rejection and take Euro down in a corrective dip to 1.1750 again. Watch price action near 1.1830/50.
EURJPY (129.77) is rising and could test 130.0-130.5 in the near term before facing any rejection from there.
Dollar-Yen (109.85) has bounced from 109.70 yesterday but while below 110.20, the pair can oscillate within the 110.20-109.40 region with possibility to test 109 on the downside. View is broadly ranged to bearish for the near term.
Aussie (0.7298) is stable just now. It may test 0.7350 before falling from there back to 0.7250.
Pound (1.3773) is trading in the green and has scope to rise to 1.38 before facing rejection. Immediate view is bullish.
USDCNY (6.4682) has bounced a bit and can rise to 6.47-6.4750 while above 6.46. Note that there is support at 6.45 on the downside which cannot be negated and while below 6.48 immediate view could be to see a broad range of 6.48-6.45.
USDINR (73.2650) fell sharply yesterday to test support near 73.25/20. It would be important to see if the pair holds above 73.25/20 and bounces back to 73.60/80 or does RBI allow for a further decline to 73.0-72.90 before the expected bounce is seen especially today, being month closing.
INTEREST RATES
The US Treasury yields have dipped further and the chances of a rise that we were expecting have been reduced. A further fall looks likely in the coming days. The German yields continue to trade stable and have still chances of seeing a corrective rally in the coming days before resuming the broader downtrend. The 5Yr GoI has broken its 5.68%-5.72% range on the downside and has room to dip further today to test its next support at 5.63%-5.62%.
The US 2Yr (0.20%), 5Yr (0.76%), 10Yr (1.27%) and the 30Yr (1.89%) Treasury yields have come down further. The 10Yr has dipped below 1.3% and the 30Yr below 1.9% thereby reducing the chances of seeing 1.4%-1.45% (10Yr) and 2%-2.1% (30Yr). While below 1.3% (10Yr) and 1.9% (30Yr) the yields can fall further to 1.2%-1.18% (10Yr) and 1.8%-1.75% (30Yr) in the coming days.
The German 2Yr (-0.75%), 5Yr (-0.72%), 10Yr (-0.44%) and 30Yr (0.03%) yields have dipped slightly by 1 bps across tenors. View remains the same. As mentioned yesterday, the 10Yr has to break above -0.40% to see the corrective rally to -0.30%/-0.25%. The 30Yr however looks positive while above 0% and keeps alive the chances of seeing 0.10%-0.20% on the upside. Thereafter a fresh fall to resume the broader downtrend is possible.
The 5Yr GOI (5.6507%) has broken the 5.68%-5.72% range on the downside and has tested 5.66% as well. 5.63%-5.62% is a good immediate support which can be tested now. The price action in the 5.63%-5.62% will need a close watch in the coming sessions to see if the yields can bounce-back from there or not.
