STOCKS
Equities are in a short corrective dip mode and could soon bounce back after a few sessions. Dow and Dax can fall to 35250/200 and 15800/750 respectively while Nifty and Sensex could bounce back from 16800/500 and 57000 soon. Nikkei and Shanghai however have immediate resistances at current levels which if fails to hold can indicate medium term bullish to continue. Watch price action closely at current levels.
Dow (35312.53, -48.20, -0.14%) has fallen further in line with our expectations and can extend to 35250/200 or even 35000 before bouncing back again to higher levels. The fall is likely to be short lived.
DAX (15824.29, -10.80, -0.068%) has dipped too and could extend to 15800/750-15600 before a bounce back towards 16000+ is seen in the medium term.
Nikkei (28491.81, +40.79, +0.14%) has risen well but has immediate resistance near 28500 just now which if holds could push the index sharply down towards 28000 or even lower. A sustained break above 28500 is needed for the price to rise towards 29000-30000 eventually. For now watch price action at 28500.
Shanghai (3577.69, +10.59, +0.30%) has risen to test immediate resistance near 3580 which if breaks and sustains higher could extend to 3620-3630 or even to 3650 in the medium term. For now, watch price action near 3580 to see if the index moves higher or faces rejection from here. A break on the upside looks more likely.
Nifty (17076.25, -55.95, -0.33%) dipped yesterday after testing 17225. If the index bounces back immediately, we may open up chances of a rise to 17400 else the corrective dip may extend to 16800/500 in the near term before a bounce is seen. Extension of the corrective dip looks more likely today although it would sustain only for a few sessions and not expected to be deep.
Sensex (57338.21, -214.18, -0.37%) fell yesterday as expected but the dip could be short lived and extend to 57000 before a bounce is seen.
COMMODITIES
Brent and WTI can consolidate between 72.50-67.50 and 65-68 respectively for the near term while Gold has to rise above 1820/25 to see a rise towards 1840. Silver can dip towards 23.50-23.00 while below 24.50. Copper has scope to test 4.20 on a fall below 4.30..
Brent (71.28) and WTI (68.22) have fallen. Resistances at 72.50-74 on Brent is holding well and that near 70 on WTI. While the above resistances hold, prices may fall in the near term. Brent may range within 72.50-67.50 fr now while WTI may held towards 65.
Gold (1815.20) is stuck in a sideways range of 1820/25-1800 and needs to break on either side to give directional clarity.
Silver (24.21) has risen well and is sustaining above 24 for now. While below 24.5 a dip to 23.5 is possible. Only a break above 24.50 will indicate any bullishness.
Copper (4.3010) has fallen. A further fall to 4.20 is possible on a break below 4.30.
FOREX
Dollar Index has surprisingly fallen and if it breaks below 92.50/40, it would be significant and indicate medium term bearishness. Euro has risen well and needs to break and sustain above 1.1850 to head higher. Watch price action near 1.1850. EURJPY has resistance at 130.50 which has to break to turn bullish afresh. USDCNY can range between 6.45-6.48 within which a bounce is expected. USDJPY tested 110.40 before coming off and could trade within 109-110.50/40 for now. USDINR is bullish towards 73.40/50 while above 72.90.
Dollar Index (92.50) fell from 92.80 itself contrary to our expectation of a rise to 93. Note that 92.50/40 is now an immediate support which needs to break to bring in further bearishness for the index in the near term towards 92.20/92.00. Watch price action near current levels.
Euro (1.1838) rose to 1.1857 before coming off from there. Immediate level of 1.1850 seems to be holding for now but it may soon break on the upside if dollar Index continues to fall below 92.40.
EURJPY (130.18) is holding below 130.50 now and needs to break on the upside to see fresh bullishness. Else a fall back to 129.50 can be seen.
Dollar-Yen (109.96) tested 110.42 before coming off from there. Broad range of 110.40/50-109.00 looks likely to hold for the near term within which 109.60/40 is immediate support.
Aussie (0.7360) seems be holding below 0.74 but the price may soon bounce bac from 0.7350 and head towards 0.7450 soon. Corrective dip could be short lived.
Pound (1.3774) is holding below 1.38 and may test 1.3825/30 before rising back to higher levels eventually. Looking at the rising momentum, it see sPound can soon break on the upside to head higher.
USDCNY (6.4624) has bounced after testing 6.4533 this week. While above 6.45, a bounce back to 6.47/48 looks likely eventually from where another dip can be seen. A range of 6.48-6.45 can hold for now.
USDINR (73.09) bounced from initial support at 72.90 instead of heading to lower supports of 72.75/50. While above 72.90, the pair can see a test of 73.40/50 before a rejection is seen from there.
INTEREST RATES
The US Treasury yields have dipped slightly at the far-end. Though the immediate outlook is unclear with one day of upmove and another day of dip, we expect the yields to rise in the near-term and then reverse lower to resume the overall downtrend. The German Yields have inched up further and keeps intact our view of seeing a corrective rise and then fall-back again. The Indian 10Yr and 5Yr have declined sharply and are bearish to fall further in the coming days.
The US 2Yr (0.21%) and the 5Yr (0.78%) Treasury yields remain stable while the 10Yr (1.30%) and the 30Yr (1.92%) have dipped slightly. The immediate outlook is unclear with equal chances of seeing either 1.4%-1.45% on the upside or 1.2%-1.18% on the downside on the 10Yr. However, the 30Yr looks relatively bullish to see 2%-2.1% on the upside while above 1.87%. As such we prefer to see 1.4% on the upside first on the 10Yr as well before the broader downtrend resumes.
The German 2Yr (-0.73%) and the 5Yr (-0.69%) yields remain stable while the 10Yr (-0.38%) and 30Yr (0.11%) have inched up slightly. Our view of seeing a corrective rise to -0.30%/-0.25% (10Yr) is intact. The 30Yr can extend the rise to 0.20% while it sustains above 0.10%. Thereafter a fresh fall can happen to keep the broader downtrend intact.
The Indian 10Yr GoI (6.1988%) has been coming down over the last few days amid muted trading. A sustained break below 6.2% can drag it to 6.1% in the coming days. The 5Yr GOI (5.6109%) has declined sharply below the key support at 5.63%. From a bigger picture, the 5Yr has room to test 5.5% on the downside in the coming weeks while it remains below 5.7%.
