Dow seems to be gathering momentum slowly. While it sustains above 34000 a further rise is possible in the coming days and the danger of falling below 33500 will get reduced. DAX has risen back sharply but needs to break above 15250 to avoid the expected fall to 14500-14000. Nikkei has risen sharply above 29000 and can move up towards the upper end of its 28500-30500 range. Shanghai is stuck in a narrow range within its broad 3350-3500 range. Our view is to see a fall within this range in the coming days. Sensex and Nifty can consolidate in a range of 48000-49000/50000 and 14400-14800 respectively for some time with a bearish bias to break the range on the downside eventually.
Dow (34230.34, +97.31, +0.29%) seems to be getting the much required follow-through rise above 34000. While it sustains above 34000 now, the rise to 35000 that we have been mentioning can be seen. Also while above 34000, the danger of the fall below 33500 will stand reduced.
DAX (15170.78, +314.30, +2.12%) has risen back sharply above 15000 again. However, it will have to break above 15250 from here to negate the chances of seeing 14500-14000 on the downside mentioned yesterday. Such a rise will bring back the chances of seeing 15500-15700 on the upside before a reversal again.
Nikkei (29397.13, +584.50, +2.03%) has risen back sharply above 29000 and is likely to move up towards 30000 on a break above 29500. Overall, the 28500-30500 is holding well and Nikkei can move up towards the upper end of this range. 28000-31000 is a slightly broader range that we have been mentioning earlier.
Shanghai (3442.81, −4.05, -0.12%) is stuck between its intermediate support at 3425 and resistance at 3475. The immediate outlook is mixed. However, broadly, the index has been ranged between 3350 and 3500. While below 3500, the chances are high for Shanghai to move down to 3350 – the lower end of the range. A strong and sustained rise above 3500 is needed to become bullish.
Nifty (14617.85, +121.35, +0.84%) and Sensex (48677.55, +424.04, +0.88%) are holding above their intermediate support levels of 14400 and 48000 respectively. A range of 14400-14800 (Nifty) and 48000-49000/50000 (Sensex) looks possible in the near-term. The broader bias is negative to see a downside break of these ranges eventually.
Commodities are stable today as crude prices, Silver and Copper have fallen a bit from higher levels seen yesterday while only Gold seems to have risen. Copper may test 4.60 while Silver could bounce from 26. Gold may be headed towards 1800 in the near term. Crude prices are trading slightly lower but may face strong rejection from resistances near 70 on Brent and 67-68 on WTI.
Brent (68.92) and WTI (65.56) both have dipped from levels seen yesterday. We continue to look at crucial resistances of 70 on Brent and 67 on WTI to hold for the near term and produce a decent fall in the near to medium term back towards levels of 60 on both. While resistances hold, view is sideways ranged to bearish in the longer run.
Gold (1786.50) has risen yet again and could test 1800. The price may soon break above 1800 to test 1820/40 on the upside. Overall trend remains up while above 1760
Silver (26.49) has dipped contrary to the rise seen in Gold and Copper. We may have to consider a test of 26 before a fresh bounce is seen again towards 27-28 in the medium term.
Copper (4.5460) has dipped a bit but overall looks bullish for a test of 4.60 before falling off from there.
Dollar Index looks bullish towards 92 while that may indicate a fall towards 1.1950-1.19 on Euro. EURJPY needs to sustain above 131 in order to move up further. Pound and Aussie look stable. USDJPY may test 109.75-110 before falling off sharply from there. Dollar-Rupee may trade within 73.80-74.30 region while USDCNY may rise towards 6.50/52 soon.
Dollar Index (91.33) looks stable while below 91.50 and has scope for a fall back to 90.50 on the downside. Longer term view looks bullish towards 92 on a break above 91.50.
Euro (1.20) has dipped further and is trading at important support of 1.20. A break on the downside may take it lower towards 1.1945 before a bounce back is seen.
EURJPY (131.20) has dipped slightly and could test 131 before bouncing back again towards 132. Failure to hold above 131 could make it bearish in the medium term.
Dollar-Yen (109.33) looks stable but has scope for a rise to 109.75-110 while above 109. Thereafter a sharp fall looks likely towards 108-107 again on the downside.
Aussie (0.7714) looks stable and could test 0.77-0.7685 before again bouncing back to higher levels.
Pound (1.3894) looks stable within 1.38-1.40 and needs to break on either side of this range in order to give clarity on further direction from here.
USDCNY (6.4801) has risen, opening after a week long holiday. We may expect a rise towards 6.50/52 soon on the upside.
USDINR (73.9150) tested 74.0450 before falling from there. We may expect broad range of 73.80-74.30 to hold for the near term before any fall below 73.80 is seen in the longer run. Watch for a re-test of 73.80 and a bounce to 74.10/30 as support near 73.80 holds to produce a decent bounce.
The US Treasury yields remain stable and seem to lack strength to move up sharply. A test of their crucial supports looks likely in the near-term and they will have to sustain above those supports to keep alive the chances of a rise back again. The German yields have bounced but have strong resistances ahead that can cap the upside and drag them lower. The 10Yr GoI fell yesterday after the RBI announced the second phase of bond purchase under the G-SAP programme. The overall view is bearish to test 5.9% on the downside.
The US 2Yr (0.16%), 5Yr (0.80%), 10Yr (1.58%) and 30Yr (2.26%) Treasury yields continue to trade stable. A test of the crucial support levels of 1.5% (10Yr) and 2.2% (30Yr) looks possible in the near-term. As we have been mentioning for some time, a strong break below 1.5% (10Yr) and 2.2% (30Yr) is needed to turn the outlook bearish and negate a rise back to 1.7%-1.8% (10Yr) and 2.4%-2.5% (30Yr).
The German 2Yr (-0.70%), 5Yr (-0.61), 10Yr (-0.23%) and the 30Yr (0.33%) yields have bounced-back. But the resistance at -0.20% (10Yr) and 0.35% (30Yr) are likely to hold and drag the yields to -0.45% (10Yr) and 0.20% (30Yr) again in the coming weeks. As mentioned yesterday, a break below -0.27% (10Yr) and 0.28% (30Yr) can trigger this fall. A strong rise past -0.20% and 0.35% is needed to negate this fall.
The 10Yr GoI (5.9783%) has declined further yesterday and keeps our overall bearish view intact of seeing 5.9% on the downside. Intermediate support is at 5.96%. While that holds, a consolidation between 5.96% and 6.04%/06% is possible before the fall to 5.9% happens.