STOCKS
Dow, Dax, Nikkei and Shanghai have risen but could face resistances on the upside before declining from there. Failure to decline from respective resistances can give some upside momentum for the medium term. Nifty and Sensex plunged yesterday and although there is some rom on the downside, we would wait to see if the Indian markets can bounce in line with the strength seen in other indices globally.
Dow (35227.03, +646.95, +1.87%%) has risen sharply. Immediate resistance can be seen at 35500 which can hold for now and send index down towards 34000 again. A strong break above 35500 if seen, can take the index up towards 36000 and indicate bullishness. Till then a broad range of 35500-34000 may hold.
DAX (15380.79, +210.81, +1.39%) has moved up but while below 15500 we can see some more consolidation between 15500 and 15050. The index has room to rise towards 15750-15800 on a break above 15500.
Nikkei (28282.01, +354.64,+1.27%) has risen today. The index is just below the immediate resistance at 28250 which if holds can bring down the index to 27500 else can open up scope for a rise towards 29250.
Shanghai (3590.73, +1.42, +0.032%) has dipped below 3600 as mentioned previously as resistance near 3625 iss holding for now. The view is bearish to see a fall towards 3550/3500 in the coming sessions before we see a test of 3600/3625 again.
Nifty (16912.25, -284.45, -1.65%) plunged yesterday and closed below the crucial support level of 17000. While below 17000, the view is bearish to see a dip towards 16800 before bouncing back. Any break below 16800 can drag the index down towards 16600/400.
Sensex (56747.14, -949.32, -1.65%) has fallen sharply yesterday. The view is bearish to see a test of 56000-55500 on the downside.
COMMODITIES
Brent and WTI have risen well and need to break above interim resistances to head further up. The rise is expected to be a corrective one which can be short lived. Gold is bearish while below 1790. Silver and Copper are likely to continue range trade within 22-24 and 4.25-4.45/50 respectively.
Brent (73.34) and WTI (69.93) have risen today. While above 73, Brent can rise to 75-77 before declining from there again. Needs to rise above 70 to test 73 on the upside before sharply falling back from there.
Gold (1779.60) has earlier support turned resistance near 1790 and while that holds, Gold can fall towards 1760 or even lower in the near term.
Silver (22.30) has dipped and can test support near 22. While above 22, a range of 22-24 may hold.
Copper (4.3050) trades stable near current levels. We continue to look for a range of 4.25-4.45/50 for the near term.
FOREX
Some recovery is seen in most currency pairs. Aussie, Pound, EURJPY have bounced from yesterday’s lows and may see some corrective bounce for the next few sessions before deciding whether to continue the upmove or resume its fall. Dollar Index, Euro and USDCNY continue to remain ranged within 97-95.50, 1.1142/1.12-1.14 and 6.38-6.3663 respectively. USDINR can test 75.50 which if holds can produce a fall to 75.20. Failure to fall from 75.50 can lead to an eventual rise to 75.75.
Dollar Index (96.23) is holding below 96.50 for now and has scope to fall towards 95.50. As mentioned yesterday, we would keep a close watch on the broad range of 95.50-97; a break on either side thereafter can determine the next course of movement.
Euro (1.1290) may trade within 1.14-1.12/1.1142 for the near term. A break below 1.1142 will be needed for the Euro to become more bearish.
EURJPY (128.17) has risen back to above 128 and needs to sustain the rise to head towards 129-129.50 soon. Failure to break above 128.50 can again bring it down towards 127.50. Immediate support is now seen at 127.50 while there enough room on the upside.
Aussie (0.7048) tested 0.6990 but has bounced back well from there. If the bounce sustains, it can bounce higher towards 0.71. Failure to hold above 0.699 for long can again take Aussie lower towards 0.6950-0.6900 soon.
Pound (1.3277) has bounced well and holds above 1.32. A further rise to 1.3350 is possible in the next few sessions. View is bullish while above 1.32.
Dollar-Yen (113.47) has risen within the 114-112.50 region. Unless the range breaks on either side, we may expect it to hold for a few more sessions.
USDCNY (6.3711) is fluctuating below 6.38 but at the same time finds difficult to break below 6.3663 over the past 3-sessions. We may continue to look for the range of 6.38-6.3663 to hold but a break below 6.3663 can soon be possible leading to a fall towards 6.36/35 on the downside. Overall view remains bearish while below 6.40/38.
{USDINR (75.4250) rose sharply yesterday breaking above the initial resistance at 75.20/25. We now look at the next important resistance near 75.50 which if holds can produce a corrective dip to 75.20 before rising higher to 75.75, the upper crucial resistance that we have been looking at. We expect a reversal to be seen from 75.75 in the medium term.
INTEREST RATES
The US Treasury yields have risen back sharply at the far-end. The supports mentioned yesterday on the 10Yr and 30Yr have held as expected and the deeper fall mentioned yesterday could get delayed. While this bounce sustains, a further rise is possible from here before a reversal is seen again. The German yields keep the bearish view intact and can fall further from here. The 10Yr and 5Yr GoI have come-off from near-their resistances and can dip within their respective ranges in the coming days.
The US 2Yr (0.63%), 5Yr (1.21%), 10 Yr (1.44%) and the 30Yr (1.77%) have bounced-back especially sharply at the far-end. The support at 1.35% on the 10Yr and 1.7% on the 30Yr mentioned yesterday has held well. While the 10Yr sustains above 1.4%, a further rise to 1.5%-1.55% is possible in the coming days. The 30Yr on the other hand will have room to test 1.85% from where a reversal is possible again.
The German 2Yr (-0.74%), 5Yr (-0.64%), 10Yr (-0.39%) and 30Yr (-0.10%) yields remain lower and stable. The outlook is bearish. The yields can fall to -0.45% / -0.5% (10Yr) and -0.1% / -0.2% (30Yr) in the coming days.
The Indian 10Yr (6.3594%) and the 5Yr (5.6896%) have come-off from their highs of 6.3751% and 5.7133% respectively. The resistances at 6.38% (10Yr) and 5.72%-5.74% (5Yr) are holding well as expected. While below 6.38%, the 10Yr can dip to 6.32%-6.3%. The 5Yr on the other hand can test 5.64%-5.63% on a break below 5.68%.
