STOCKS
Apart from the Indian and US equities other indices have fallen from levels seen yesterday. Dow can rise further on a break above 36000 while Dax has scope to fall to 15900 before a bounce is seen. Failure to hold above 15900 will be strongly bearish. Nikkei and Shanghai too need to hold above 29000 and 3550 to keep bullish possibilities intact. Nifty and Sensex are bullish above immediate supports.
Dow (35813.80, +194.55, +0.55%) has risen well and may test 36000. A break above 36000 is needed to rise further towards 36250-36500 in the medium term. Immediate support near 35500 looks strong just now.
DAX (15937.00, -178.69, -1.11%) has come down sharply, breaking below our mentioned support at 16100. Lower support is now visible near 15900 which if breaks can take the index down to 15800/400 on the downside. Watch price action near 15900 just now.
Nikkei (29436.73, -337.38, -1.13%) has fallen sharply and looks bearish while below 29500 to fall towards 29250-29000-28500 from where a bounce can again be possible in the medium term.
Shanghai (3581.87, -7.22, -0.20%) has come down as warned yesterday. While below 3600 view is bearish for a fall to 3550. A break above 3600 is needed for initial indication of a fresh rally towards 3625-3675 on the upside.
Nifty (17503.35, +86.80, +0.50%) rose very well yesterday. The view is bullish above 17200 to see a test of 17800 and higher eventually. A break below 17200 if see can drag the index down towards 17000. Narrow range of 17800-17200 and broad range of 17000-18200 is possible over the next 1-2 weeks.
Sensex (58664.33, +198.44, +0.34%) has risen back and the view is bullish to see a rise towards 59000/60000 on the upside.
COMMODITIES
Gold and Silver have fallen sharply on Dollar strength and has scope to fall to 1780/1760/1740 and 23-22 in the near term. Copper may trade within 4.45-4.30 while below 4.45. Crude prices have risen sharply but may hold below resistances near 84/85 (Brent) and 80 (WTI) respectively.
Brent (82.32) and WTI (78.62) have risen sharply on news that US President Joe Biden had authorized the release of 50 million barrels from the country’s Strategic Petroleum Reserve. We see immediate resistance at 84/85 on Brent and 80 on WTI which may hold to push back oil prices down towards 78-75 soon. The OPEC+ would meet next on 2nd Dec, 2021.
Gold (1793.40) has fallen to the 1780-1800 support region. Need to see if the price bounces from 1780 to rise back to 1800+ or falls off below 1780 to test 1760/40 on the downside. With the Dollar Index trading strong, Gold may either remain stable or see a sharp fall.
Silver (23.56) has sharply broken below 24 and could test 23-22 on the downside before again bouncing back from there. Immediate view is bearish.
Copper (4.4035) seems to be holding below 4.45 just now and unless a break above 4.45 is seen, view is to see a ranged movement between 4.45 and 4.30 for the near term. A break above 4.45 is needed for a rise to 4.50/60
FOREX
Most currencies are stable and seen near levels mentioned in yesterday’s edition. Dollar Index continues to remain strong keeping possibility of euro to fall to 1.12 or lower. Aussie and Pound have paused but look bearish for the near term. USDCNY could trade within 6.37-6.42 while EURJPY needs to break above 130 to turn further bullish else can remain within 130-128 for some more time. USDINR can trade within a narrow range of 74.60-74.40 and a broad range of 74.80-74.00.
Dollar Index (96.552) continues to sustain above 96.50 and looks fairly bullish towards 97.50-98.
Euro (1.1237) has paused just now and could remain ranged for a couple of sessions before falling back to 1.12 or lower. It would be important to see if Euro breaks below 1.12 in the near term.
EURJPY (129.29) tested 129.60 before coming off from there. A rise above 130 is needed to turn the cross bullish again. Else we may expect a fall back to 128 soon. Watch price action near 130.
Aussie (0.7222) fell to 0.7206 yesterday before bouncing back from there as expected. While above 0.72-0.7170, we may expect some corrective upmove towards 0.7250-0.7265 before again coming off from there.
Pound (1.3377) tested 1.3342 as expected before bouncing from there. A short corrective upmove is possible to 1.34-1.3450 before a fall is again seen in the longer run.
Dollar-Yen (115.06) needs to move up sustaining above 115 to slowly head towards 116 and higher. View is bullish for now.
USDCNY (6.3899) trades near the upper end of the 6.39-6.37 range mentioned yesterday. A break above 6.39 if seen can take the pair up to 6.42 extending the range to 6.37-6.42 for the near term.
USDINR (74.42) held below 74.60 well. While resistance at 74.60 holds, we may expect trade within 74.40-74.60. a break below 74.40 will drag the pair down to 74.20/00. Narrow range of 74.60-74.40 and broad range of 74.0-74.80 may hold till the next one week.
INTEREST RATES
The US Treasury yields have risen further sharply at the far-end and are coming closer to their key resistances. The US PCE data release today will be key to see if it is providing a trigger to break the resistances and move higher or not. We will have to wait and watch. The German yields have risen further sharply. A break above the immediate resistances will prove our bearish view wrong and in turn will take the yields further higher. The 5Yr and 10Yr GoI are likely to trade sideways for some time.
The US 2Yr (0.60%) and the 5Yr (1.32%) Treasury yields remain stable while the 10Yr (1.65%) and the 30Yr (2%) have moved up further as expected. The 10Yr has a crucial resistance in the 1.65%-1.68% region which if broken can take it up to 1.75% and even higher. The 30Yr on the other hand has room to test 2.1% from here and need to see if it is reversing lower from there to keep our expected range intact.
The German 2Yr (-0.74%), 5Yr (-0.55%), 10Yr (-0.22%) and 30Yr (0.10%) yields have risen further sharply yesterday. A further rise above -0.2% (10Yr) and 0.10% (30Yr) can take the yields up to -0.1% (10Yr) and 0.2% (30Yr). That in turn will then negate our earlier bearish view of seeing -0.45% and -0.5% on the 10Yr and -0.1% and -0.2% on the 30Yr.
The Indian 10Yr GoI (6.3648%) tested 6.38% and has come-off from there. The narrow range of 6.3%-6.38% mentioned yesterday remains intact and a test of 6.3% is possible while below 6.38%. We reiterate that 6.3%-6.45% is the broader range of trade possible and the bias is bearish to see a break below 6.3% and a fall to 6.2% eventually.
The 5Yr GoI (5.6967%) has come-off from the high of 5.7156%. The yield is likely to oscillate in the 5.66%-5.75%/5.78 range for some more time before breaking below 5.66% and falling to 5.63%-5.62%.
