STOCKS
Global indices are mixed. Dow remains below key resistance and looks vulnerable for a fall. DAX and Nikkei can see some upticks in the near term. Shanghai has declined below a key support and is on a corrective fall. Sensex and Nifty looks mixed and can remain range bound.
Dow (26143.05, -14.11, -0.05%) broke below 26100 but has bounced from the low of 26062. As mentioned yesterday, the index has to breach 26250 decisively to gain strength and rally to 26500 levels again. But while below 26250, the possibility is high for the Dow to fall to 25750 and 25700.
DAX (11935.20, +29.29, +0.25%) is getting support around 11850. An upmove to 11985-12000 is possible in the near term. A range-bound move between 11850 and 12000 is possible for some time.
Nikkei (21824.50, +113.12, +0.52%) has been inching higher over the last couple of days. A test of the key 21930-21950 resistance region is likely in the near term. A pull-back from this resistance region can take the index lower to 21500 again. But a strong break above 21950 will be bullish for a fresh a rally to 22750 over the medium term.
Shanghai (3185.05, -4.91, -0.15%) has declined below 3200 and has tested 3180 as expected. The corrective fall can extend to 3150 and 3130 while the index remains below 3200.
Sensex (38607.01, +21.66, +0.06%) is holding above 38500. While it manages to sustain above 38500, it can bounce to 39000 and retain the 38500-39000 sideways range for some more time. But a break below 38500 will drag it to 38000.
Similarly, Nifty (11596.7, +12.40, +0.11%) can bounce to 11700 if it sustains above 11550. But a break below 11550 can take it to 11500. It will also increase the possibility of the index declining below 11500 and target 11400 thereafter.
COMMODITIES
Gold and Silver have come under pressure and looks vulnerable for further fall. Copper hovers above key support. Oil has come-off from its highs but is managing to hold above a key near-term support which keeps the possibilities alive of seeing further rise.
Gold (1293) has tumbled below 1300 and has bounced slightly after making a low of 1288. A dip to 1287-1285 cannot be ruled out in the near term
Silver (14.98) is trading below the psychological level of 15 and is likely to test the crucial support level of 14.85 while it remain below 15.05. A strong break below 14.85 will be very negative silver which will increase the possibility of the prices tumbling to 14.5 or even 14 thereafter.
Copper (2.89) has a crucial supports between current levels and 2.88. A bounce from here can take it back to 2.90 and 2.95 levels again. It will also retain the 2.89-2.96 sideways range. But a break below 2.88 will bring pressure on copper and will take it lower to 2.86 in the near term.
WTI (63.77) has come-off sharply from its resistance at 64.8. However, the support at 63.4 is holding well as of now. As long as WTI sustains above 63.40, a bounce to 64.8 again is possible. It will also keep our bullish view intact for a test of 66. The view will turn negative for a fall to 62 if WTI breaks below 63.4
Brent (70.98) has come-off from its high around 71.78. However, the support around 70.40 seems to be holding well as of now and keeps alive the possibility of Brent moving higher to 72.7. A break below 70.4 can take it to 69.80 and 69.40.
FOREX
Dollar Index looks strong and could pull up Euro-Yen, Dollar Yen and Dollar Yuan with itself. Euro could fall from 1.13.
Dollar-Index (96.98) is almost stable and while immediate support at 96.75 holds, the index could have some scope of rising towards 97.25/35 in the near term.
Euro (1.1288) could dip towards 1.1250-1.1200 if resistance near 1.13 holds. This is preferred view for now unless we see a sharp rise above 1.13.
Euro-Yen (126.11) has broken above 126 but could face resistance near 126.50 which if holds could push the pair towards 126-125 levels. Alternatively, if the pair manages to break above 126.50, it would turn bullish towards 127.50-128.
Dollar Yen (111.71) has risen sharply and could test 112.0-112.5 on the upside soon. While the Dollar Index looks bullish in the coming sessions, there is scope for Dollar-Yen to rise higher too in the near term.
Aussie (0.7127) has dipped a bit. While immediate resistance near 0.72 holds, Aussie could fall towards 0.71 or lower in the coming sessions. A break above 0.72, if seen would turn bullish towards 0.73.
Pound (1.3067) is trading along support trend line and stuck within the 1.3150-1.30 region for now. Looking at the 3-day candles, while support at 1.30 holds, Pound could turn upwards targeting 1.34 in the medium term.
USDCNY (6.7192) has immediate resistance at 6.72 which if holds could keep the pair stable below 6.72 for a few sessions. A break above 6.72 could make it bullish towards 6.74/75 in the medium term.
Dollar-Rupee (68.93) bounced from 68.83 yesterday. While support at 68.75 holds, Dollar-Rupee could move up to test 69.07/10 initially, break above which would pull the pair up towards 69.25/35 levels. If 69.07/10 holds, we could see another dip towards 68.80/75 keeping the pair in a sideways range for a few sessions.
INTEREST RATES
The US yields look in a sideways range just now. While the medium term view is bearish, we could see some interim upward corrective movements in the near term. The 2Yr (2.36%), 5YR (2.32%), 10YR (2.50%) and 30YR (2.93%) are trading higher today again. Our medium term bearish view remains intact. On the upside there is room towards 2.55% and 3% for the 10YR and 30YR respectively.
The German 10YR (-0.007%), 30YR (0.633%), 2Yr (-0.572%) and the 5YR (-0.421%) yields have risen from yesterday’s levels. While there is scope of falling in the near term, the yields may remain stable for a few sessions.
The 10Yr GOI (7.5201%) is holding below 7.55/58% and could well come off towards 7.45% in the near term. A break above 7.58% could se a test of 7.60%.
