STOCKS
Most equity indices are recovering after a sharp fall seen over the last few sessions. Dow and Dax have come up and can rise further towards 35000-35500 and 15800 respectively while Nikkei and Shangai are headed towards 30500 and 3800. Nifty and Sensex closed in the red yesterday but may rise today in line with strength seen in other equity indices globally.
Dow (34869.63, +261.91, +0.76%) broke below 34750 to test 34665 before bouncing back sharply from there. If the bounce sustains, we may again expect a break above 35000 and an eventual rise towards 35500 or even higher.
DAX (15701.42, +91.61, +0.59%) has held above support near 15600 and a rise to 15800 again looks possible.
Nikkei (30562.42, 115.05, +0.38%) has surged sharply and while above 30500, a rise to 30700 looks possible before a corrective fall towards 29500-29000 is seen.
Shanghai (3719.45, +4.08, +0.11%) has broken above 3700 finally and looks bullish for a rise towards 3800 soon.
Nifty (17355.30, -13.95, -0.08%) has been consolidating between 17250-17500 for some days now and can continue so for some more time before we see a break on either side to decode on further direction from here.
Sensex (58177.76, -127.31, -0.22%) has also been consolidating between 58000-59000. Within the range, sensex has come down to test the lower end of the mentioned range. A bounce back from here towards 59000 levels is possible..
COMMODITIES
Brent and WTI have risen and can test the level of $74/75 and $72/73 in the coming sessions. Gold and Silver are sustaining above the supports at 1780 and 23.50 respectively which can take them further towards 1800/1820 and 24/24.50.Resistance at 4.40 in Copper has held well and copper can now come down to test the level of 4.20 in the coming sessions.
Brent (73.82) continues to hold above immediate trend support at 71-73 mentioned yesterday and while that holds, price is bullish for a test of 74-75 or even 76-78 on the upside before a fall from there is seen.
WTI (70.79) has risen too and could target 72 before falling off from there. Support is seen near 68 for the near term.
Gold (1792.40) is holding above the support at 1780.While above 1780, a bounce back to 1800 and 1820 eventually is possible in the coming sessions. A strong break below 1870 on the flipside can take Gold down towards 1765/40.Watch price action near current levels.
Silver (23.71) is broadly consolidating between the range of 23.50-25.Within the range a bounce towards 24 and eventually 25 is possible.
Copper (4.3770) has room to come down towards 4.20.The resistance at 4.40 has held very well and can send the price down.
FOREX
Most currency pairs are fluctuating within narrow ranges and unable to find a clear trend just now as most pairs seem to be trading within a sideways range. Dollar Index trades within 92.30-92.85 while Euro needs to sustain above 1.1770 to slowly head higher but unless a break above 1.1850-1.19 is seen, it is difficult to turn bullish. Aussie and pound are stable and ranged for now. EURJPY is rising but needs to break above 130.50 to rise further. USDCNY faces pressure from 6.48/47/4650 and while that holds, the pair may fall. USDINR can have scope for a rise above 73.80 to test 74 before coming off from there else a range of 73.40/50-73.80 may hold for the next few sessions.
Dollar Index (92.577) fell from 92.85 indicating a very near term range of 92.30-92.85 which needs to break on either side to give more clarity on further directions.
Euro (1.1818) tested 1.1770 yesterday as expected butt bounced back sharply to above 1.18. A sustained rise above 1.1850 is needed for Euro to turn bullish for the near term.
EURJPY (130.05) is bouncing well from levels above 129.50 and while that holds, we expect a rise to 130.50-130.75 in the next few sessions. Thereafter if the pair breaks to the upside to test 131-132 is to be watched closely.
Dollar-Yen (110.05) is holding above 109.60 and could continue to trade within 110.4-109.60 before a bounce to the upside is seen in the medium term.
Aussie (0.7370) holds well below 0.74 and is likely to trade within 0.7450-0.7350 in the very near term. A break below 0.7350, if seen can take the price lower towards 0.73 or even 0.7250-0.72in the medium term before a sharp bounce is seen. Watch price action near 0.7350 for now.
Pound (1.3847) is holding below 1.39 and while that holds, a fall to 1.3750-1.37 is possible. Overall broad range of 1.39-1.37 may hold for the next 1-2 weeks.
USDCNY (6.4485) tested 6.4571 before coming off from there. Resistance near 6.4650/47 seems to be putting downward pressure on the pair as the pair falls off from the mentioned levels. A range of 6.47/4650-6.43.00 may hold for the near term.
USDINR (73.6750) fell yesterday after testing 73.7325. There is scope for a test of 73.80 which if breaks can take the pair towards 74 before a fresh fall from there is seen. Else a range of 73.40/50-73.80 may hold for the near term.
INTEREST RATES
The US Treasury yields continue to trade stable. We retain our view of seeing a rise in the coming days while the yields remain above their near-term supports. The US CPI data release today will need a close watch to see if it can push the yields higher from here. The Treasury yields will have to fall decisively below their supports to come under pressure for a fresh fall. The German yields sustain higher and have room to move up further from here before reversing lower again. The 10Yr and 5Yr GoI have risen back yesterday. However, key resistances are ahead which will have to be broken in order to negate the fall that we have been expecting and move up further.
The US 2Yr (0.21%), 5Yr (0.81%), 10Yr (1.33%) and the 30Yr (1.91%) Treasury yields remain stable. Our view remains the same. The 10Yr can test 1.45%-1.5% while above 1.3% and the 30Yr can rise to 2.1% and higher while above 1.8% and on a rise past 2%. Also from a bigger picture the 10Yr has room to test even 1.7% on the upside while above 1.2%-1.18%. A strong break below 1.18% (10Yr) and 1.8% (30Yr) is necessarily needed to negate the rally and bring the yields under pressure for a fresh fall.
The German 2Yr (-0.72), 5Yr (-0.64%), 10Yr (-0.33%) and 30Yr (0.16%) yields remain stable at higher levels. There is room for the current corrective rally to test -0.30%/-0.25% (10Yr) and 0.20% (30Yr) on the upside. The price action thereafter will need a close watch for a reversal and the resumption of the broader downtrend.
The Indian 10Yr GoI (6.1920%)has risen back yesterday. A break above 6.2% will pave way for a further rise to 6.22%-6.24% and in turn will negate our view of seeing 6.1% and lower levels.
The 5Yr GoI (5.6268%) has come-off after testing the resistance at 5.64%. The range of trade is likely to be 5.6%-5.64% in the near-term. A breakout on either side of this range will then determine whether the yield can rise to 5.66%-5.68% or fall to 5.55%-5.5%.
