STOCKS
Dow Jones and Dax have room to rise towards 37000 and 16300/400 respectively before we see a fall back. Nikkei has risen today, a strong break above 29500 can take the index up towards 30000, else a fall back to 28000 looks possible. Shanghai is consolidating between 3600-3650. Nifty needs to sustain above 17800 to be bullish towards 18200, else a fall back towards 17400 8s possible . Sensex looks bullish towards 60000.
Dow (36,799.65 +214.59 , 0.59%) has risen again and is heading towards 37000. The 37000 is a strong resistance which if holds can send the index down towards 34000. A strong break above 37000 is needed to test 38000 and negate the view of a dip towards 34000.
DAX (16,152.61, +131.88 , 0.82%) has risen sharply today. The view is bullish to see a rise towards 16300/400 before we see a dip back.
Nikkei (29,313.22 +11.43 , 0.039%) is heading towards 29500 as mentioned yesterday. A strong break above 29500 can take the index up towards 30000/31000.
Shanghai (3,620.54, −11.78, 0.32%) is consolidating between the range of 3600 and 3650. A strong break above 3650 can take the index up towards 3700, on the other hand a break on the downside can take the index down towards 3550.
Nifty (17805.25, +179.55 , 1.02%) has managed to close above the crucial level at 17800. The index needs to sustain above 17800 to test 18200, else a fall back towards 17400 can be seen.
Sensex (59,855.93, +672.71 , 1.14%) has also risen sharply yesterday. The view is bullish to see a rise towards 60000 and 61000 eventually.
COMMODITIES
The OPEC+ in its meeting yesterday decided to go by the scheduled increase in output by 400,000bpd from February 2022. Gold is trading within 1790-1820/30 for now and needs to break in order to test higher resistance at 1850. Silver can trade within 22.50-23.50 while Copper can slowly rise to 4.60/65 on a break above 4.50.
Brent (79.79) and WTI (76.79) have both dipped from 80.26 and 77.27 respectively but overall trades at higher levels than seen over the last few sessions. The OPEC+ in its meeting yesterday decided to continue with its scheduled 400,000 bpd increase in output from February 2022. We continue to look at immediate resistances of 81 and 78 to hold and produce a fall in the near term.
Gold (1815.40) has risen back instaed of falling below 1800. It has to sustain above 1790-1800 in order to initially consolidate between 1800 and 1820/30 before rising towards 1850 on the upside.
Silver (23.03) needs to initially rise to break above 23.50 to move up. Till then 22.50-23.50 can be a possible range.
Copper (4.4455) has risen well and can re-test 4.50 initially before rising higher towards 4.60/65 eventually.
FOREX
Dollar Index has risen well and can trade within the narrow 95.50-96.50 and broad 95-97 region. Euro has fallen below 1.13 but can rise back from 1.1250. Aussie and Pound look ranged for now. USDJPY has risen well above 115.50 and could be headed to 116.35/40 which needs to break to head further up. USDINR can face rejection at 74.60/80 else can rise to 75.00/20. USDCNY looks ranged while below 6.3850.
Dollar Index (96.232) has dipped from 96.50. The index is holding within 95.50-96.50 as mentioned yesterday and any break on either side would bring in the broader range of 95-97.
Euro (1.1291) has fallen below 1.13 contrary to our expectation of a rise towards 1.1400/50. Immediate support is seen near 1.1250 which if holds can produce a bounce.
EURJPY (130.93) fell sharply from 131.50 and while that holds, we may expect trade within 130-131.50 for now.
Aussie (0.7231) has scope to rise towards 0.73-0.7325 on the upside while immediate support is seen at 0.72.
Pound (1.3532) has scope to test 1.36 before falling from there to lower levels of 1.3450.
Dollar-Yen (115.98) has risen sharply breaking above 115.50 as expected. Now a rise to 116-118 is open for the medium term. Interim resistance at 116.35/40 can hold to produce a short corrective dip before the pair continues to move up. Overall trend remains up.
USDCNY (6.3718) has fallen back. While below 6.3850, view is bearish for a fall towards 6.36/34 eventually. Broad range of 6.3850-6.34 may hold for a couple of weeks.
{USDINR (74.5550) held below 74.60 yesterday. We need to see if 74.60/80 region holds to produce a corrective fall towards 74.40/20 or manages to give way for the pair to rise higher towards 75.00/20 on the upside. Watch crucial price action near 74.60/80 over the next few sessions.
INTEREST RATES
The US Treasury yields have risen further at the far-end. Crucial resistances are ahead for the yields which if broken will negate our view of seeing a sideways move and in turn will become more bullish to see further rise. We will have to wait and watch closely. The German yields also have limited room on the upside from here. We expect the key resistances coming up to halt the current rise and trigger a reversal. The 10Yr and 5Yr GoI have risen sharply yesterday and are now bullish to see further rise from here.
The US 2Yr (0.76%) and the 5Yr (1.36%) Treasury yields remain stable while the 10Yr (1.65%) and the 30Yr (2.05%) have risen further. The 10Yr has entered the crucial 1.65%-1.7% resistance zone while the 30Yr has little room to test its key resistance level of 2.1%. As mentioned yesterday, a strong rise past these levels will negate our view of seeing a pull-back and sideways range. In turn that will turn the outlook more bullish to see further higher levels. We will have to wait and watch.
The German 2Yr (-0.63%), 5Yr (-0.43%), 10Yr (-0.13%) and 30Yr (0.25%) sustains higher and stable. There is limited upside from here. The key resistances at -0.1%/-0.05% (10Yr) and 0.25%-0.30% (30Yr) are likely to cap the upside and drag the yields lower again going forward. As mentioned yesterday, a strong rise past these resistances is necessarily needed to become more bullish from here.
The Indian 10Yr (6.5173%) GoI and the 5Yr (5.8498%) GoI have both risen sharply above their respective key levels of 6.5% and 5.8%. The near-term outlook is bullish to test 6.55%-6.56% (10Yr) and 5.90%-5.91% (5Yr) on the upside.
DATA TODAY
5:00 10:30 IN Services PMI
…Kshitij Expn 57.9 …Expected 57.8 …Previous 58.1
3:15 18:45 US ADP Emp
..Kshitij Expn 86K …Expected 358K …Previous 534k
Data released yesterday:-
————————-
0:30 6:00 JP PMI
…Kshitij Expn 55.3 …Expected 54.3 …Previous 54.5 …Actual 54.3
1:45 7:15 CN PMI
…Kshitij Expn 49.9 …Expected 50.1 …Previous 49.9 …Actual 50.9
7:30 13:00 CH CPI
…Kshitij Expn -0.5 …Previus 0.6 …Actual 0.6
9:30 15:00 UK PMI
…Kshitij Expn 59.1 …Expected 57.6 …Previous 58.2 …Actual 57.9
14:30 20:00 CA PMI
…Kshitij Expn 58.2 …Previous 57.2 …Actual 56.5
15:00 20:30 US Manufacturing ISM
…Kshitij Expn 62.4 …Expected 60.4 …Previous 61.1 …Actual 68.2
