STOCKS
Dow and Dax have fallen sharply but can be ranged within a broad zone of 34750-33500 and 15000-15500 respectively. Shanghai markets are closed till 7th October. Nikkei has also fallen sharply and has scope to eventually fall towards 27000 while it remains below 28000. Nifty and Sensex may rise from current levels while supports on the downside are intact near 17600/400/200 on Nifty and 59000 on the Sensex.
Dow (34002.92, -323.54, -0.94%) has fallen back yet again and seems to fluctuate within the 34750-33500 range which is possible for the next few sessions before we see any decisive break out on either side of the mentioned range.
DAX (15036.55, -119.89, -0.79%) has fallen too, testing 15000 again. It would be important to see if Dax breaks below 15000 to fall towards 14800 or manages to bounce back again towards 15400-15500 which is an immediate trend resistance above current levels. Watch price action on extremes of the 15000-15500 region.
Nikkei (27658.31, -786.58, -2.77%) has come down sharply today due to shortage of vaccines and spike in inflation. 27000 is the next strong support below 28000 which can be tested in the next 1-2 weeks before a rise back towards 28000 or higher looks possible.
Shanghai (3568.17, +31.87, +0.90%) markets are closed till 7th October. While above 3500, view is bullish.
Nifty (17691.25, +159.20, +0.91%) rose yesterday to test 17746.80 before closing lower just below 17700. A strong break above 17800 is needed to negate the view of seeing a corrective fall towards 17400/200 levels.
Sensex (5929932, +533.74, +0.91%) closed above 59000.While above 59000,the view is bullish to see a test of 60000 in the coming sessions
COMMODITIES
Crude prices have risen and look fairly bullish for the coming 1-2 weeks especially after the OPEC+ has decided to keep the output policy intact for now. Brent can test 85.0-85.62 while WTI has scope to rise to 78-80. Gold can remain within 1780/90-1760/40 region for the near term. Silver may remain ranged within 21.50-23 zone. Copper is trading below resistance at 4.25 which if holds can take the price down to 4.10/00 else a test of 4.35 is possible.
Brent (81.56) has risen above 80-81 levels again after OPEC+ confirmed that it would stick to its current output policy as demand seems to be rising for oil and petroleum products. Although there is immediate resistance on the 3-day chart, we may look for a slow rise to 85.62 in the coming weeks. 78-80 would be an important support zone on the downside.
WTI (77.83) has scope to rise steadily towards 78-80 on the upside.
Gold (1764.10) tested 1771 but has come off from there. A range of 1780/90-1760/40 looks likely for the near term within which a test of the upper end of the range can be seen.
Silver (22.51) has come off even before testing 23 on the upside. We may look for a range of 23-21.50 for the near term unless a break on either side is seen.
Copper (4.2180) rose to test 4.24 before coming off from there. Note that 4.25/24 is an interim trend resistance which if holds can take the price down to 4.10/00 again in the near term. Any break above 4.25 will again open up chances of a rise to 4.30/35 in the longer run.
FOREX
Dollar Index has risen from 93.678 and while the index trades above 93.60, it is likely to rise back above 94. Euro can test 1.1660/80 before again falling back from there. Broadly while below 1.171.1750, we cannot negate a bearish view of testing 1.15-1.14 in the longer run. EURJPY is ranged within 130.50-128 region while Pound and Aussie are also likely to remain ranged within 1.3750-1.34 and 0.7320-0.7220 respectively. USDINR may rise towards 74.45/50 as rising crude can impact the pair positively.
Dollar Index (93.917) bounced back sharply from 93.678 seen yesterday and has scope to rise towards 94+ while above 93.60. Unless the index is able to break below 93.60, it is difficult to expect Dollar weakness for now that would sustain for at least a couple of weeks.
Euro (1.1604) tested 1.1640 yesterday before falling off from there. The exchange rate has to necessarily break above 1.1660-1.1680 in the near term and above 1.1750 in the medium term to avoid falling towards 1.15-1.14 on the downside. While below 1.17-1.1750, downside risk persists in the longer run.
EURJPY (128.94) had risen well from yesterday’s intra-day low of 128.518 and can test 129.40/50 in the near term. Broad range of 130.50-128 continues to hold for now.
Dollar-Yen (111.11) is holding above 110.80 from where a bounce has been seen since yesterday. While above 110.80, the rate can rise towards 111.40-111.60 in the coming sessions.
Aussie (0.7275) is unable to break above 0.7320 and while below that, it is likely to remain stable within 0.7320 and 0.7220 for a few sessions. Immediate view is ranged unless a decisive break on either side is seen.
Pound (1.3602) has been rising well from 1.34 and can test 1.3650-1.37 before again falling lower from there. A range of 1.3750-1.34 can hold for now.
USDCNY (6.4450) may continue to hold within 6.47/48-6.44 range. As mentioned yesterday, any break below 6.44 can lead to a fall towards 6.41/40.
USDINR (74.3150) rose yesterday from low of 74.1275 as expected. The air may rise further today as it holds high correlation with crude prices currently. Rising crude may take USDINR higher towards 74.45/50.
INTEREST RATES
The US Treasury Yields have bounced slightly. As mentioned yesterday, the yields will have to break below the near-term supports to see a deeper fall from here. While the supports hold, a near-term rise is possible before we see a fresh reversal. The German yields remain stable and are keeping alive the chances of seeing a short-term rise to test their resistances and then fall back again. The 5Yr and 10Yr GoI have immediate resistances ahead which have to be broken to see an extended rise. While these resistances hold, a pull-back can be seen.
The US 2Yr (0.28%), 5Yr (0.95%), 10Yr (1.48%) and the 30Yr (2.04%) %) have bounced back. A rise above 1.5% will bring back the chances of testing 1.6% on the upside. As mentioned yesterday, the 10Yr will have to fall below 1.4% to negate the rise to 1.6%. Similarly, the 30Yr should break below 2% to see 1.9%-1.8% on the downside again and negate the chances of seeing 2.1%-2.2% on the upside
The German 2Yr (-0.71), 5Yr (-0.58%), 10Yr (-0.22%) and 30Yr (0.26%) remains stable. Our near-term bullish view remains intact. The 10Yr can rise to -0.1% on a break above -0.2%. The 30Yr has room to test 0.30%-0.35% while above 0.2%. Thereafter a fresh fall is possible to keep the long-term downtrend intact.
The Indian 10Yr GoI (6.2478%) has an immediate resistance at 6.26% which will need a close watch. While that holds, a pull-back to 6.2% is possible in the coming days. But a break above 6.26% will see an extended rise to 6.3%-6.32% and then see a reversal.
The 5Yr GoI (5.6842%) on the other hand has resistance in the 5.7%-5.72% region which has to be broken for it to rise further towards 5.75%-5.76%. While below 5.72%, the chances are high for it to come down towards 5.66%-5.64% again in the coming days.
