Sat, May 08, 2021 @ 16:20 GMT
Home Contributors Technical Analysis Market Morning Briefing: Aussie Is Stable Within 0.77-0.7765

Market Morning Briefing: Aussie Is Stable Within 0.77-0.7765

STOCKS

Dow has risen well above 34000 and has potential to test 35000. The corrective fall that we have been expecting is not happening. DAX can test its crucial resistance level of 15700 and then reverse lower. Nikkie can fall within its 28000-31000 range. Shanghai can test the upper end of its 3350-3500 range and then reverse lower. Sensex and Nifty will have to rise past 49000 and 14800 to gain bullish momentum and avoid the fall to 47000-46000 and 14000-13800.

Dow (34200.67, +164.68, +0.48%) has risen further and closed on a strong note above 34000 on Friday. While above 34000 the outlook is bullish to see 35000 on the upside and our earlier view of seeing 32000-31000 on the downside will get negated. Dow has to fall below 34000 has risen above 34000. While this break sustains, our view of seeing a reversal to 32000-31000 that we have been expecting will get negated. The Dow can then target 35000 and even higher levels.

DAX (15459.75, +204.42, +1.34%) has risen breaking above 15300. A test of 15500-15700 is possible in the near-term. 15700 is a strong resistance that can cap the upside. We expect a sharp corrective fall from 15700 towards 14500 and even 14000 in the coming weeks.

Nikkei (29733.38, +50.01, +0.17%) is still consolidating in the narrow range of 29500-30000. We retain our bearish bias of seeing a break below 29500 and a fall to 28500-28000. Broadly, the 28000-30500/31000 range is intact and we expect Nikkei to move down within this range.

Shanghai (3471.87, +45.25, +1.32%) has risen sharply breaking above 3425 and is heading towards 3500. As mentioned on Friday, 3350-3500 is the range which we expect to remain intact. As such Shanghai can fall back from 3500 towards 3400-3350 again. While below 3500, the broader view is bearish to see 3250-3200 on the downside.

Nifty (14617.85, +36.40, +0.25%) and Sensex (48832.03, +28.35, +0.06%)remain higher but seems to lack momentum. As mentioned on Friday, a strong rise past 14800 (Nifty) and 49000 (Sensex) is needed to gain strength for a further rise to 15000-15200 (Nifty) and 50000-51000 (Sensex). Else the indices are likely to remain under pressure and keep the bearish view intact of seeing 14000-13800 (Nifty) and 47000-46000 (Sensex) on the downside.

COMMODITIES

Commodity look mixed today. Gold and crude prices look for an eventual rise in the near to medium term towards 1800-1820 (Gold), 70 (Brent) and 67 (WTI) respectively. But Silver and Copper have dipped from recent resistance levels and may dip slightly before resuming the upmove again. Silver could test 27 but while that holds, near to medium term view would be bearish. Copper may test 4.10 before again rising back from there.

Brent (66.43) trades higher and has scope for a rise to 70 in the near term before declining from there. WTI (62.92) on the other hand can test 67 before falling from there again.

Gold (1777.40) is finally sustaining the rise above 1760 and while that holds, a rise to 1800-1820 is on the cards for the near term. Above 1820, Gold can eventually target 1860 in the medium term.

Silver (25.89) fell sharply from 26.38 seen last week. Failure to rise back above 26 would be bearish for the price else we may look for a test of 27 before falling from there. Watch price action to see if Silver breaks above 26 again or not.

Copper (4.1795) trades lower from the last week’s high of 4.2440. While 4.30/25 holds for now, Copper may re-attempt to test 4.10 before bouncing back from there.

FOREX

Dollar Index has bounced a bit but overall the broaded trend still points to the downside. Euro may trade within 1.19-1.20 for sometime before rising sharply to 1.20+ levels. EURJPY seems to have turned bearish and will confirm on a sustained break below 129.50. Aussie is bullish above 0.77 while Pound may also rise higher while above 1.38 and could head towards 1.40. USDCNY and USDINR look bullish while above 6.52 and 74.20 which are crucial support levels.

Dollar Index (91.68) may test 91.34 in the near term before bouncing back from there. Immediate upside is likely to be limited to 92 and eventual fall towards 90.50 could be on the cards.

Euro (1.1951) has fallen from 1.20 which may holds for the very near term. While above 1.19, we may expect some sideways consolidation within 1.19-1.20 before an eventual rise above 1.20 is seen.

EURJPY (129.84) has dipped below 130 and may test 129.50 in the very near term. Failure to rise back from 129.50 would make the pair bearish towards 129 or lower.

Dollar-Yen (108.62) continues to fall and could test 108 before again bouncing back from there. Failure to break below 108 may open up chances of fall towards 106 in the medium term.

Aussie (0.7727) is stable within 0.77-0.7765 and while above 0.77, there is scope for a sharp rise towards 0.78+ in the near term. View is bullish while above 0.77.

Pound (1.3828) has risen well breaking above 1.38 and while above 1.38, view is bullish for a rise to 1.40 soon.

USDCNY (6.5251) has bounced well and could test 6.55/56 in the near term. View is bullish while above 6.52.

USDINR (74.3550) has immediate and important support at 74.20 and while that holds, a bounce back to 74.60/80 looks possible just now. View is bullish while above 74.20.

INTEREST RATES

The US Treasury yields can test their crucial support levels this week and need to see if they reverse higher to keep the uptrend intact or breaking lower to indicate a reversal. The German Yields have moved up within their sideways range. The bias is bullish to see an upside break of the range and a further rise going forward. The 10Yr GoI has come-off sharply from the day’s high on Friday. The broader view is bearish to see a test of 5.90% on the downside.

The US 2Yr (0.16%), 5Yr (0.81%), 10Yr (1.56%) and 30Yr (2.25%) remains lower on early trades today after having fallen sharply last week. We reiterate that 1.55%-1.50% (10Yr) and 2.25%-2.20% (30Yr) are crucial support zones that will need a close watch this week. A strong fall below 1.50% (10Yr) and 2.20% (30Yr) is needed to indicate a trend reversal. While these supports hold, the yields can consolidate in a range of 1.50%-1.80% (10Yr) and 2.20%-2.50% (30Yr) and the broader trend will continue to remain up.

The German 2Yr (-0.70%), 5Yr (-0.61), 10Yr (-0.27%) and the 30Yr (0.29%) have risen-back well across tenors. -0.35/-0.25 (10Yr) and 0.2%-0.3% (30Yr) is the range at the moment. The bias is bullish to break these ranges on the upside and see a rise to -0.20%/-0.15% (10Yr) and 0.35% (30Yr) over the medium-term.

The 10Yr GoI (6.0745%) has come-off sharply from the high of 6.1759% on Friday. We retain our bearish view of seeing 5.90% on the downside remains intact. Resistances in the 6.16%-6.18% region and at 6.20% can cap the upside.

 

Kshitij Consultancy Servicehttp://www.kshitij.com
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsibly for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

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