STOCKS
Dow and Dax trade lower while Nikkei and shanghai too have dipped slightly. We may expect some consolidation within the immediate support and resistance levels for a few sessions. Indian equities had risen on Friday but we need to see if the rise would sustain today or the indices may see a small corrective dip from current levels.
Dow (34607.72, -271.66, -0.78%) has broken 34750 and is heading towards crucial trend support near 34500/450 which needs to hold in order to see a sharp bounce back towards 35000 or higher in the medium term. Failure to bounce from 34500/450 will be strongly bearish for a sharp fall in the longer run taking the index down towards 34000-33000 in the coming weeks. Watch price action near 34500/450 in the next few sessions.
DAX (15609.81, -13.34, -0.085%) has support near 15600 and lower near 15400 and while that holds, we may expect a trade within 15800-15600/400 in the near term. A bounce from 15600-15400 is on the cards in the medium term.
Nikkei (30292.84, -89, -0.29%) is sustaining above 30,000 and while that holds, view remains bullish to see a test of 30500/700 on the upside before we see a dip back to 30000-29500 is seen in the coming sessions.
Shanghai (3699.27, -3.84, -0.10%) is trying to rise above 3700 in line with our expectations. Shanghai needs to sustain above 3700 to test 3800 in the coming 1-2 weeks.
Nifty (17369.25, +15.75, +0091%) is still trading between the range of 17250-17500 as we had mentioned previously. The view is to see a test of 17250 which is the lower side of the range followed by a rise towards 17500 and eventually 17700/800.
Sensex (58305.07, +54.81, +0.094%) has been consolidating between the levels of 58000-59000. View remains bullish to see a rise above 59000 in the coming sessions.
COMMODITIES
Commodity prices trade higher. Crude prices have risen and could rise further to test respective resistances in the near term before coming off from there. Brent may rise towards 74-75 or even 76-78 while WTI may test 72. Gold needs to sustain above 1780 to move up slowly else can fall back to 1770/40. Silver may test 23.50-23.00 before bouncing back from there. Resistance on Copper has held at 4.47 and while that holds, a fall to 4.40/30 is possible.
Brent (73.44) has held well above immediate trend support at 71 and bounced back from there to rise sharply breaking above immediate resistance at 73. While above 73, Brent is likely to be bullish and test 74-75 or even 76-78 on the upside before a fall from there is seen. Contrary to our expectation of a fall to 67/65, we may have to allow for a rise in the near term.
WTI (70.24) has broken above immediate trend resistance at 70 and if that sustains, a rise to 72 is possible before falling off from there. Support is seen near 68 for the near term.
Gold (1791.40) fell sharply from 1806 on Friday. Immediate support is seen near 1780 which if breaks can take the price sharply lower towards 1770/40 in the coming sessions. Watch price action near 1780 for now,
Silver (23.79) is trading within our expected range of 23.50-25 and while that holds, we may expect a test of 23.50 or even 23 before a bounce is seen from there.
Copper (4.4290) rose sharply yesterday testing immediate trend resistance near 4.47 before dipping back from there. While resistance near 4.47 holds, price can fall towards 4.30 in the next few sessions before any bounce is seen from there.
FOREX
Dollar Index has bounced back and can test 92.80/93.00 before falling back from there. Euro needs to sustain above 1.1775/1.1750 to eventually head higher breaking above 1.19 on the upside. EURJPY looks ranged within 131-129.60. Aussie and Pound can be stable while below resistances at 0.7450 and 1.39 respectively. USDCNY is rising and may test 6.46/47 in the near term while USDINR can test 73.40/30 before bouncing higher. USDJPY can trade within 110.40-109.60 in the near term.
Dollar Index (92.67) can test 92.80-93.00 on the upside on a break above 92.75. While below 92.75, there is scope for a fall to 92.25-92.00. Overall broad range of 92.00-93.00 can hold for the next 1-2 weeks.
Euro (1.1802) can fall to 1.1775-1.1750 but may bounce back from there and hold the upward momentum in the medium term. A break below 1.1750 if seen can again trigger a fall towards 1.17-1.1660 in the medium term. While above 1.1750, there are chances of a bounce back.
EURJPY (129.77) is holding below 131 and can fall towards 129.50-129.00 before bouncing back towards 131 again in the medium term.
Dollar-Yen (109.94) fell from 110.40 last week and while that holds, we may expect trade within 110.40-109.60 in the near term. A break on either side of this range can lead to a sharp break out in the longer run.
Aussie (0.7359) holds well below 0.74 and is likely to trade within 0.7450-0.7350 in the very near term. A break below 0.7350, if seen can take the price lower towards 0.73 or even 0.7250-0.72in the medium term before a sharp bounce is seen. Watch price action near 0.7350 for now.
Pound (1.3835) is holding below 1.39 and while that holds, a fall to 1.3750-1.37 is possible before it bounces back again in the medium term. Overall broad range of 1.39-1.37 may hold for the next few weeks.
USDCNY (6.4531) fell to 6.4337 on Friday before bouncing back sharply from there. A rise to 6.46/47 is possible in the near term.
USDINR (73.5050) fell sharply from 73.85 levels last week. While the fall sustains, a test of 73.40/30is possible before a bounce back is seen in the medium term.
INTEREST RATES
The US Treasury yields remain stable. While the near-term supports on the 10Yr and 30Yr continues to holds, we expect the yields to move up further in the coming weeks. The chances of seeing an extended rise are also there which we will have to keep a close watch. The German yields sustain higher and have room to move up further within the current corrective rally to test the key resistances and then can reverse lower again. The 10Yr and 5Yr GoI have come-off last week after testing their resistances. The outlook is bearish to see a fresh fall in the coming days.
The US 2Yr (0.21%), 5Yr (0.82%), 10Yr (1.33%) Treasury yields remain stable while the 30Yr (1.92%) has dipped slightly. While above 1.3%, the 10Yr is bullish to test 1.45%-1.5% even (revised up from 1.4%-1.45% mentioned last week). From a bigger picture we will have to see the chances of this rise extending even up to 1.7% in the coming months. A strong fall below the 1.2%-1.18% support zone is needed to become bearish again. The 30Yr on the other hand can break 2% and rise to 2.1% and even higher while it stays above 1.8%.
The German 2Yr (-0.71), 5Yr (-0.64%), 10Yr (-0.33%) and 30Yr (0.15%) yields continue to sustain higher and stable. Our view of seeing -0.30%/-0.25% (10Yr) and 0.20% (30Yr) on the upside remains intact. Thereafter we expect the yields to reverse lower and resume the broader downtrend.
The Indian 10Yr GoI (6.1782%)had come-off last week after testing 6.2%. The outlook is bearish while below 6.2% to test 6.15%-6.14% immediately and then 6.1%-6% eventually in the coming weeks. The 5Yr GoI (5.6080%) had failed to break above the resistance at 5.64% and keeps our bearish view intact of testing 5.55%-5.5% on the downside.
