STOCKS
Equities look mixed. Dow and DAX seem to lack momentum to move up and break their near-term resistances. Dow can fall further and negate the chances of seeing a break above 29100 if it breaks below 28500 today. DAX can dip to 12800 while below 13200. Nikkei remains stuck inside a narrow range. Shanghai oscillates at the mid-point of its sideways range and has high chances to move up towards the upper end of its 3180-3450 range. Sensex and Nifty looks relatively stronger than the others in the lot and has room to move up further from current levels
Dow (28514, −165.81, -0.58%) has come down further yesterday indicating the lack of strong follow-through buyers to breach the 29000-29100 resistance zone. A break and close below 28500 today will be bearish to see a fall to 27500. That in turn will negate the chances of seeing a break above 29100.
DAX (13028.06, +9.07, +0.07%) remains stable above 13000 and looks mixed in the near-term. We see equal chances to see either a rise to 13200 or a fall to 12800 from current levels now. A breakout on either side of 12800-13200 will then decide whether the DAX will fall to 12000 or move up to 13400. We will have to wait and watch.
Nikkei (23529.67, −97.06, -0.41%) continues to remain stuck in the narrow range of 23500-23700. The near-term outlook is mixed. As mentioned yesterday Nikkei has to sustain above 23500 in order to break above 23700 and rise to 24000. A break below 23500 will reduce the chances of seeing 24000 on the upside and will take the index lower to 23000.
Shanghai (3344.66, +3.89, +0.12%) has dipped below 3350. As mentioned yesterday, a test of 3320-3300 is possible before the rise to 3450 happens. Broadly the 3180-3450 sideways range is intact and the index can now move towards the upper end of this range in the coming weeks.
Nifty (11971.05, +36.55, +0.31%) fell to test 11800 but had then had recovered sharply from the low of 11822.15 yesterday. This keeps alive the chances of seeing a break above 12100 and a rise to 12250-12500 going forward. As mentioned yesterday, while above 11700, the outlook will continue to remain bullish.
Sensex (40794.74, +169.23, +0.42%) has been stuck in between 40000 and 41000 over the last few days. The bias remains bullish to see a break above 41000 and a rise to 42000. Support is at 39500 and only a break below this level will negate the above mentioned bullish view.
COMMODITIES
Commodities look mixed. Gold seems to be ranged within 1930-1880 for now while Silver has important support at 24 above which the view is fairly bullish. Fall in Copper may be limited to 2.95 on the downside while there is enough room for a rise to 3.20 eventually. Crude prices have risen but need to sustain higher to move up from here. Watch price action near current levels.
Brent (43.37) and Nymex WTI (41.07) have risen to re-test 43.50 and 41.50 respectively and needs to break above these levels and sustain higher to gain momentum for a sharper rise in the near term. Failure to rise further from here could again keep the prices ranged within 43.50-39.30 for Brent and 41.50-36.00 for WTI as mentioned yesterday. We keep a close watch on price action near current levels.
Gold (1901.30) has not sustained a fall below 1900 seen yesterday, instead it seems to be in a ranged movement between 1920 and 1880 which may hold for a few more sessions. Important resistances are seen at 1920 and 1930 respectively which may hold and gradually push the prices down to1860-1840 in the medium term. Overall view is bearish while below 1930. We would bring in bullish possibilities only on a break above 1930.
Silver (24.22) has dipped slightly but as mentioned yesterday we see important trend support at 24 which if holds could take the price higher towards -27 eventually. Only a break below 24 would force us to look for lower levels from here. View is bullish while above 24.
Copper (3.0475) has dipped a bit but continues to trade in the middle of the broad 2.95-3.20 range mentioned yesterday. We repeat from yesterday’s edition that the price has equal scope of moving on either side and any dip from here, if seen could be limited at 2.95 (support) from where a bounce could be seen towards 3.20 in the medium term.
FOREX
Dollar Index looks stable for now and could be ranged within 93-94 in the near term. Euro on the other hand could be stable in the 1.17-1.18 region. EURJPY, Aussie and Pound could rise from current levels while USDJPY has immediate resistance at 105.40 which could keep the pair intact within 105.0-105.40. USDCNY has some scope to rise while USDINR is bearish below resistance at 73.50.
Dollar Index (93.40) is holding well above support at 93 and could test 94 on the upside before falling off from there. View is ranged for now between 93 and 94. A break on either side of this range would then drive the next course of movement.
Euro (1.1748) looks stable but has some scope of testing 1.18 on the upside before resuming the fall from there. On the downside, we may expect support at 1.17 to hold for now, keeping a range of 1.17-1.18 intact for the near term.
EURJPY (123.65) has bounced slightly and could head towards 124.0-124.35 in the next few sessions. Thereafter, we may expect resumption of fall towards 123 or even 122 in the medium term.
Dollar-Yen (105.25) has immediate resistance at 105.40 which could limit the upside for today and push the pair back towards 105 in the near term. A range of 105.0-105.40 could hold for the day.
Aussie (0.7168) has dipped a bit and while it trades below 0.72, there is scope for a fall towards 0.71-0.70 in the medium term.
Pound (1.3012) is almost stable and has support at 1.28 which could limit the downside and push the pair higher in the near term. We may look for an eventual bounce towards 1.31 soon.
USDCNY (6.7244) may rise to 6.7311-6.74 in the near term. View is bullish while above 6.7080.
USDINR (73.3050) has crucial resistance at 73.50 which if holds could keep the 73.50-73.0 range intact. For the next 1-2 sessions we may expect a range of 73.15-73.45 to hold.
INTEREST RATES
The US Treasury yields have dipped further thereby reducing the chances of an extended rise that we were expecting. A further fall from here will turn the outlook bearish and trigger a fresh and deeper fall going forward. The German Yields are heading down towards our mentioned levels from where a corrective bounce is possible before a much deeper fall happens. The 10Yr GoI remains stable and could see a corrective bounce in the near-term before resuming its downtrend.
The US 2Yr (0.14%), 5Yr (0.30%), 10Yr (0.72%) and the 30Yr (1.49%) have dipped further across tenors. This has reduced the chances of seeing the irse to 1.72% on the 30Yr and 0.90% on the 10Yr that we had been expecting. While below 1.50%, the 30Yr can fall to 1.40%. The 10Yr can fall to 0.60% on a break below 0.70%.
The German 2Yr (-0.75%), 5Yr (-0.77%), 10Yr (-0.58%) and the 30Yr (-0.17%) yields are moving down in line with our expectation. The 30Yr and 10Yr are coming closer to -0.20% and -0.60% as expected. A corrective bounce to -0.10% (30Yr) and -0.50% (10Yr) is possible before we see a much deeper fall to -0.35% (30Yr) and -0.70% (10Yr) over the medium-term.
The 10Yr GoI (5.9011%) hovers around 5.90%. We retain our view of seeing a near-term corrective bounce to 5.95% and then resume the broader downtrend to target 5.80% and lower levels. 5.8850%-5.95% could be a possible near-term range that can be seen for sometime before a fresh fall happens.
