STOCKS
Equities have all risen well and trade in the green with bullish hopes for the near term. Dow has held above 35250 while Nikkei, Shanghai and Dax has risen above 28500, 3550 and 15800 respectively, all looking bullish for the near term. Nifty can head towards 17400 while Sensex too looks bullish for a rise to 58000.
Dow (35443.82, +131.29, +0.37%) has held above support at 35250 and bounced back well. A break above 35500 is now needed for the index to rise further towards 35750-38500 in the coming sessions. While above 35250, view is bullish.
DAX (15840.59, +16.30, +0.10%) is trading above support at 15800 and while that holds, a rise to 16000 can be possible soon. Failure to hold above 15800 can drag the pair down to 15600. A range of 16000-15600/800 may hold for now.
Nikkei (28787.35, +243.84, +0.85%) has surged sharply above the immediate resistance at 28500.The view is bullish to see a test of 29000 and eventually 30000 on the upside. A break below 28000 will be needed for the index to again turn bearish.
Shanghai (3599.83, +2.79, +0.078%) is almost at 3600 and a break above this if seen and sustained, can take it towards 3620/40 in the near term.
Nifty (17234.15, +157.90, +0.92%) bounced back sharply yesterday. Immediate view is bullish to see a test of 17400 before we see a dip towards 16800-16700 in the longer run.
Sensex (57852.54, +514.33, +0.90%) has risen sharply and can rise to 58000 before we see a corrective dip
COMMODITIES
Brent and WTI can test 73.50/74 and 70 respectively before falling off while Gold and silver seems o be stuck in a sideways range. Copper can range within 4.20-4.40/50.
Brent (72.91) and WTI (69.71) have moved up. A range of 72.50-67.50 mentioned on Brent yesterday has been broken on the upside and we may have to allow for a test of 73.50-74 which if holds can produce a fall to 70.50-67.50 again in the medium term. Immediate range of 73.50/74-70.50 can be considered for now. Nymex WTI on the other hand is headed towards immediate resistance at 70.
Gold (1815.90) is in a sideways range of 1820/25-1800 and needs to break on either side to give directional clarity. Overall while the US Dollar trades weak, Gold should ideally rise.
Silver (23.97) may test 24.50-25 on the back of Dollar weakness before falling back to 23.50 on the downside. Overall range of 23.50-24.50/25 may hold for the medium term.
Copper (4.2940) is ranged within 4.20-4.40 and could soon bounce back to 4.40-4.50 in the medium term if it holds above 4.25/20. Failure to hold above 4.20/25 can drag it sharply lower towards 4.10/4.00.
FOREX
Dollar Index has fallen sharply pulling up Euro to above 1.1850. While the dollar Index head towards 92-91.75, Euro may rise above 1.19. A break above 1.1920/30 would confirm medium term bullishness. Aussie, Pound and EURJPY have also broken their respective resistances and could be headed towards 0.7450-0.75, 1.39-1.3950 and 131-132 respectively in the medium term. USDCNY can bounce from 6.45 to head towards 6.47/48. USDINR has scope to test 73.40/50 while above 72.90, but looking at the strength in other currencies, would USDINR too attempt a fall from current levels? Will need a close watch today.
Dollar Index (92.17) has broken decisively below 92.50 and could fall towards 92-91.75 before bouncing back again. We will have to see if it bounces back from 91.75 or breaks lower. A break below 91.75 would bring back the index within the broad range of 89-93 that may hold for the medium term. Watch price action near 92-91.75.
Euro (1.1882) has been surging past 1.1850 and is headed towards 1.19.A break above 1.1920/30 would confirm further bullishness on the Euro.
EURJPY (130.57) has broken above 130.50 and could be headed towards 131-132 on the upside if the rising momentum continues to hold.
Dollar-Yen (109.90) has been fluctuating below 110.40/20 with lack of clarity on immediate direction. A sharp and sustained movement on either side of the 109-110.40 region is needed for some clarity. Immediate support is seen near 109.60/40.
Aussie (0.7405) has risen as expected and could be headed towards 0.7450 soon. We may expect resistance near 0.7450 or higher at 0.75 to hold and produce a fall towards 0.7350 in the medium term.
Pound (1.3843) is not an exception and in line with other currency pairs showing strength, Pound has also broken above 1.38 and could soon test 1.39/1.3950 before coming off from there. 1.40 continues to hold as crucial resistance while above 1.38.
USDCNY (6.4593) has support at 6.45 which if holds can produce a bounce back to 6.47/48 in the near term within the broad sideways range of 6.45-6.50 that has been holding since July’21.
USDINR (73.0625) has scope to rise to 73.40/50 while above 72.90 before resuming downtrend towards 72.75/50 in the medium term. Will have to watch closely to see if the pair would fall in line with strength in other currencies globally.
INTEREST RATES
The US Treasury yields have dipped further and continues to keep the near-term outlook mixed. The chances of a rise before resuming the broader downtrend is still alive though. We will have to wait and see what the jobs data release has in plate for the yields. The German yields sustain their corrective rally and have room to move up further from here before resuming the broader downtrend. The 10Yr and 5Yr GoI have declined sharply further and are keeping our bearish view intact.
The US 2Yr (0.21%), 5Yr (0.77%), 10Yr (1.29%) and the 30Yr (1.90%) Treasury yields have dipped slightly across tenors. The immediate view continues to remain unclear. As mentioned yesterday, the 30Yr will still have the chances alive of seeing a rise to 2%-2.1% while above 1.87%. But the 10Yr looks mixed with equal chances of either falling to 1.2%-1.18% or rising to 1.4%-1.45% from here. We will have to wait and watch.
The German 2Yr (-0.74%) and the 5Yr (-0.70%) yields have dipped slightly while the 10Yr (-0.38%) and 30Yr (0.11%) remains stable. Our view remains the same. The current corrective rally can extend up to -0.30%/-0.25% (10Yr) and 0.20% (30Yr) while the 30Yr sustains above 0.10%. Thereafter we expect the yields to reverse lower and resume the broader downtrend.
The Indian 10Yr GoI (6.1713%) has seen a strong break below 6.2%. As mentioned yesterday, the view is bearish to test 6.1% initially and then extend upto 6% eventually over the medium-term. The 5Yr GOI (5.5860%) has declined further and keeps our bearish view intact of seeing 5.5% on the downside in the coming weeks. Intermediate support is at 5.57% from where a short-lived corrective bounce is possible.
