STOCKS
Dow needs to sustain above 36250/000 to keep the uptrend intact while Dax also needs to hold above 16000 to keep the bullish momentum intact for the near to medium term. Nikkei and shanghai have fallen and unless both sustain above 29500 and 3450, view is bearish for the near term. Nifty and Sensex have bullish scope intact while above 18000 and 60000 respectively.
Dow (36319.98, -112.24, -0.31%) has come down after testing the high of 36565.73 yesterday. A fall below 36250/000 is needed for our view to turn bearish. While above 36000/250, we may expect a test of 36500 and 37000 eventually.
DAX (16040.47, -6.05, -0.038%) has dipped slightly today but while above 16000, view remains bullish to see a test of crucial resistance at 16400.
Nikkei (29200.04, -84.63, -0.29%) has broken below the support at 29500. While below 29500 a fall towards 28000 is possible in the coming sessions before we see a bounce again. Our earlier mentioned bullish view towards 30000/31000 is negated while below 29500.
Shanghai (3461.98, -48.62, -1.28%) as come down sharply below 3475 resistance mentioned previously. A further fall below 3450, if seen will be bearish towards 3400. A strong break above 3475/3500 is needed to see a rise towards 3550+.
Nifty (18044.25, -24.30, -0.13%) closed above 18000 yesterday. While above 18000 the view is bullish to see a test of 18200/250. A fall back below 18000 can take it down towards 17600. Overall view is bullish.
Sensex (60433.45, -112.16, -0.19%) looks bullish to test 61000-62000 while above 60000. Watch price action closely in the near term.
COMMODITIES
Crude prices have surged as the US has opened its borders for international travel indicating a boost in jet fuel demand going ahead. Brent can rise to 87.50 while WTI can rise to 86 in the near term. Gold has dipped a bit while below 1835/40 but it needs to break on the upside soon to continue moving higher in the coming sessions. Copper has dipped while below 4.45 but can again bounce back from 4.25 soon. Silver is headed towards 24.65-25 while above 24.
Brent (85.20) and WTI (84.34) have risen sharply as the US reopened the country’s borders for international travel as a sign of an increase in demand for jet fuel going ahead. We may have to allow for a rise to 87.50 and 86 on Brent and WTI respectively.
Gold (1830.30) has dipped from 1832.72 and has interim resistance in the 1835-1840 region which if holds can produce a decline towards 1810-1800 on the downside before again a sharp rise is seen. Else an immediate break above 1835/40 is needed to give more weightage for further bullishness. That if seen may put downtrend since 2100 (Aug’20) into question.
Silver (24.32) looks stable just now and while above 24, there is scope for a rise to 25. Interim resistance is seen near 24.65/70 which if holds can produce a fall towards 24-23 in the medium term.
Copper (4.3615) tested 4.45 yesterday before coming off rom there. As mentioned yesterday, 4.45 may act as a decent resistance for the near term, pushing the price down towards 4.30/25before again attempting to bounce back towards 4.45/50 in the medium term.
FOREX
Dollar Index and Euro seem stable just now. Dollar Index holds above support near 93.65 while Euro is falling while below decent resistance near 1.16-1.1650. Aussie, EURJPY, Pound and Dollar Yen all look strongly bearish for the near to medium term. USDCNY can be ranged within 6.3750/38-6.40 while USDINR can attempt to rise to 74.20/25-74.40/50 before falling from there.
Dollar Index (94.023) has bounced from 93.87 and while above 93.75/60, the index could remain higher within 93.65-94.25 region. A break on either side in the near term will indicate further direction.
Euro (1.1583) tested 1.1609 yesterday before falling off from there. While below 1.16-1.1650 region we may keep intact our bearish view of seeing a test of 1.15-1.14 .
EURJPY (130.71) has support near 130.50 which if holds can produce a bounce to 131.50-131.75 before the cross again resumes its downtrend towards 130-129.50.
Aussie (0.7364) has fallen sharply and may continue to fall while below 0.74. The view is strongly bearish for a target of 0.7350-0.7315.
Pound (1.3559) had risen to 1.36 but came off sharply from there. While below 1.36, a fall to 1.35 is possible. Unless a break on either side of 1.36-1.35 is seen, it may remain in a sideways consolidation. Broad range of 1.37-1.33 may hold for a couple of weeks.
Dollar-Yen (112.85) has fallen breaking below 113. View is strongly bearish just now and there is scope for a fall to 112.55-112 in the medium term.
USDCNY (6.3935) tested 6.3869 yesterday and has bounced from there. A range of 6.40-6.3750/38 can hold for the near term before a decisive rise is seen.
USDINR (74.02) bounced well yesterday from 73.84 and has managed to close above 74. We expect the rise to extend towards 74.20/25 or even 74.40/50 on the upside before any fresh decline is seen again. We would expect a broad range of 73.50-74.50 for the coming sessions with a sell-on rallies environment.
INTEREST RATES
US Treasury Yields remain stable at the near-end while those at the far-end has dipped further. There is room for the 10Yr and 30Yr to dip further to test their key supports and then bounce-back again. We expect the Treasury yield to remain in a broad sideways range for some time. The German Yields have come down towards their intermediate supports much faster than expected. A corrective bounce is possible in the coming days before the broader downmove resumes. The 10Yr and 5Yr GoI dipped further yesterday and keeps our bearish view intact of falling further from here.
The US 2Yr (0.43%) and the 5Yr (1.09%) Treasury yields remain stable while the 10Yr (1.46%) and 30Yr (1.83%) have dipped slightly. Our view remains the same. 1.4%-1.35% (10Yr) and 1.8%-1.75% (30Yr) are important supports that can be tested in the near-term. We expect the yields to bounce from there and remain in a broad range of 1.35%-1.65% (10Yr) and 1.75%-2.1/2.2% (30Yr) for some time.
The German 2Yr (-0.76%), 5Yr (-0.59%), 10Yr (-0.30%) and the 30Yr (0.0%) have declined again sharply across tenors. The 30Yr has dipped to -0.3% as expected and has room to extend the fall to -0.4% before bouncing back again. The 30Yr has come down to 0% much faster than anticipated and can see a corrective bounce to 0.1% from here and then a fresh fall to -0.1% and -0.2% can be seen.
The India 10Yr GoI (6.2925%) has dipped below 6.3% as expected. It remained lower but stable yesterday. While below 6.3%, the view is bearish to see 6.2% and even lower in the coming weeks.
The 5Yr GoI (5.6655%) can extend the fall to 5.62%-5.6% on a break below 5.66% in the coming days.
