STOCKS
Dow and Dax are in a corrective decline while the Asian indices trade higher. Nikkei, shanghai, Nifty, Sensex are in the positive and could face immediate resistances but we need to watch and see if that produces a sharp decline or not.
Dow (35360.73, -39.11, -0.11%) can fall to 35250 before rising back towards 35500/750 in the longer run. The index looks bearish just now. Watch price action near 35250.
DAX (15835.09, -52.22, -0.33%) has dipped too but while above 15800-15600 there is scope to rise back towards 16000-16200 in the near term.
Nikkei (28446.81, +357.27, +1.27%) has risen sharply above 28000 contrary to our expectation. While that sustains, the view is bullish towards 29000 and 30000 eventually.
Shanghai (3577.62, +31.08, +0.88%) is holding above 3500.Immediate view is bullish towards 3580/3600 in the coming days.
Nifty (17132.20, +201.15, +1.19%) rose above resistance near 17100 yesterday and while that sustains it can rise towards higher resistance towards 17400. Failure to sustain above 17100 can drag it lower towards 16700/800 in the near term.
Sensex (57552.39, +662.63, +1.16%) has risen above 57500 contrary to our expectation of facing rejection there. Immediate resistance is seen near current levels which if holds can push the index down today also taking along Nifty. On the alternative, failure to fall from current levels can take it higher to 58500 eventually.
COMMODITIES
Gold is stable and trading below 1820 which can drag it lower to 1800 in the near term. Bullishness will only come above 1820. Silver has dipped and could trade within the broad 23.0-24.5 region. Copper has dipped and can fall towards 4.30/25 before again bouncing back. Crude prices have risen and could test respective resistances before again falling in the medium term.
Brent (71.99) and WTI (68.86) have risen yet again. We continue to look at immediate resistances at 72.50-74 on Brent to hold while WTI has similar resistance near 70. While the respective resistances hold, we may expect the price to dip in the medium term. Brent could trade within 72.50-67.50 for a few sessions.
Gold (1815.80) needs to sustain and break above 1820 in order to move up towards 1840/60. Else a sideways range of 1820-1800 can hold for now.
Silver (23.91) fell from 24.27 and while below 24.50, a dip towards 23 can be seen soon. A strong sustained break above 24 will be needed for the view to be bullish towards 24.5 again.
Copper (4.3280) has fallen and could test 4.30/25 in the near term. The price has bullish possibilities while above 4.20/25. On the upside resistance is seen near 4.40/50.
FOREX
Dollar Index has risen sharply leading to corrective movements in all currency pairs. Euro has fallen to 1.18 and while below 1.1850, view is bearish. Aussie and Pound have fallen too and could remain low for a few sessions before rising back sharply again. EURJPY looks bullish but we need to see if it breaks above 130.50 to head towards 131+ levels. USDINR can bounce from 72.90/75 support levels. USDJPY looks bullish but we need to see if it sustains above 110.50/80.
Dollar Index (92.75) bounced back sharply from 92.40 and is headed higher just now. If the bounce sustains, it can rise towards 93 again in the near term. Watch price action near current levels to see if the rise is short lived.
Euro (1.1801) has fallen from 1.1845 as warned yesterday. While below 1.1850, the exchange can fall to 1.1770 on the downside before again moving up. Immediate resistance of 1.1850 needs to be broken and sustained to be able to go strongly bullish in the medium term.
EURJPY (130.06) continues to rise and can test 130.50 in the next few sessions. Whether it will break above 130.50 is to be seen in which case the cross can attempt to rise further towards 131.30. Else a rejection from 130.50 may be seen.
Dollar-Yen (110.21) has risen to re-test 110.20 and if that holds, the pair can rise sharply towards 110.50/80 in the near term indicating strong bullishness moving forward. Watch price action over the next few sessions.
Aussie (0.7314) tested 0.7341 and declined from there. If immediate resistance near 0.7350 holds, we may have to allow for some ranged movements within 0.7350 and 0.7280 before breaking on either side of this range. A break above 0.7350 is needed to make the exchange bullish towards 0.74 or higher.
Pound (1.3734) has been pushed off sharply from 1.38 as warned and while that holds, Pound may fall sharply towards 1.37-1.3680 in the near term.
USDCNY (6.4629) dipped from 6.4718 and while that holds, the pair can be ranged below 1.4750/20. 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 (73.0) has immediate support at 72.90 which if holds can take the pair higher towards 73.20/40 in the coming sessions. Failure to bounce from 72.90 will open up chances of a further fall to support zone of 72.75/50 on the downside. Watch price action while above 72.90 today.
INTEREST RATES
The US Treasury yields have bounced back again yesterday and are keeping alive the chances of seeing a corrective rally. It will have to be seen if the yields can sustain the bounce. The German Yields have risen sharply across tenors following an ECB member’s comments to begin reducing the asset purchase. The corrective rally that we have been mentioning over the last few days is happening now. The 5Yr GoI has an important support near current levels which has to hold to see a bounce back move from here.
The US 2Yr (0.21%), 5Yr (0.79%), 10Yr (1.33%) and the 30Yr (1.94%) Treasury yields have risen-back. Inability to sustain the dip below 1.3% (10Yr) and 1.9% (30Yr) keeps the chances alive of seeing the seeing the corrective rise to 1.45%-1.45% (10Yr) and 2%-2.1% (30Yr) before the broader downtrend resumes. The yields have to sustain above 1.3% (10Yr) and 1.9% (30Yr) to avoid a fall back to 1.2%-1.18% (10Yr) and 1.8%-1.75% (30Yr) from here itself. Overall it’s a wait and watch situation for now.
The German 2Yr (-0.73%), 5Yr (-0.68%), 10Yr (-0.39%) and 30Yr (0.09%) yields have risen sharply across tenors. The expected rise to -0.30%/-0.25% (10Yr) and 0.10%-0.20% (30Yr) is happening now. Thereafter we expect the yields to reverse lower and resume the broader downtrend.
The 5Yr GOI (5.6507%) had come-off sharply from the high of 5.6757% yesterday. 5.63% will be an important support which has to hold in order to produce a bounce-back move to 5.68%-5.70% again. A break below 5.63% can drag it to 5.6% and even lower. The price action at 5.63% will need a close watch.
