STOCKS
Equities are mixed globally. While Dow and Dax has seen a dip and could see a corrective fall before bouncing back from there; Nikkei, Shanghai, Nifty and Sensex look bullish and could head towards respective resistances soon. Nikkei and Shanghai can head towards 29500/750 and 3600 respectively while Nifty can test 18600 and Sensex can rise to 62000 before a fall is seen in the medium term.
Dow (35258.61, -36.15, -0.10%) has come down slightly today after rising sharply for three consecutive days. The view of seeing a test of 36000 while above 35000 remains intact. However, if a break below 35000 is seen a corrective fall towards 34000/33750 looks possible.
DAX (15474.47, -112.89, -0.72%) has dipped slightly. The index needs to sustain above 15500, to see a rise towards 15900/16000 in the coming sessions. Watch price action near 15500 for the near term.
Nikkei (29213.04, +187.58, +0.65%) has risen sharply today. As mentioned previously 29500/29750 is a strong resistance zone which can cap the upside and send the index down to 27500. If Nikkei manages to breaks 29500/29750 then next level to watch will be 30000/31000.
Shanghai (3586.93, +18.79, +0.53%) has risen today. The range of 3500-3575/3600 is still intact. Only a strong break above 3600 can take the index towards 3700 else a decline from 3600 can be seen. Watch price action near 3600.
Nifty (18477.05, +138.50, +0.76%) tested 18543 before coming down yesterday. While above 18400, an initial testing of 18600 is possible. A corrective fall from 18600 can be seen towards 18200/18000 in the coming sessions. Only a break above 18600 would open up targets of 18800-19000 on the upside.
Sensex (61765.59, +45964, +0.75%) surged yesterday, rising beyond our expectations and has room to rise upto 62000 which is a strong resistance and can cap the upside for now producing a corrective fall towards 60000 soon. Watch price action near 62000.
COMMODITIES
Commodities are strong on Dollar weakness. Crude prices have dipped a bit but we need to see if the fall would sustain in the near term. Gold has risen well and needs to sustain above 1780 in order to move up towards 1800-1840 eventually. Silver can rise to 24.50-25 on the upside while above 23.50. Copper is bullish towards 4.90.
Brent (84.26) has fallen today due to the rise in gasoline stocks. The resistance at 86/87 has held well. A corrective fall towards $82/80 can be seen before we see a bounce again.
WTI (81.66) has also come down today. View is bearish while below $82/83 to see a fall towards $78 in the coming sessions.
Gold (1773.70) has risen again today. A strong rise past 1780 and 1800 is needed for the view to be bullish towards 1820/40. Support near 1750/60 holds well for now.
Silver (23.51) has risen and a test of 24.50/25 looks possible on the upside.
Copper (4.7540) continues to rise sharply and has scope to test 4.90 on the upside before reversing from there. Immediate view is bullish.
FOREX
Dollar Index has declines and could signal reversal on a break below 93.75/60. That could pull up Euro above 1.1650 indicating near term bullishness. EURJPY looks strong towards 134 while Aussie and Pound are headed towards 0.7450 and 1.38. Dollar Yen needs to break above 115 to rise further towards 117/118 else a decline looks possible from 115. USDINR could fall on strength in Euro and Chinese Yuan. USDCNY can see a slow fall to 6.3750 on a break below 6.41.
Dollar Index (93.77) has come down to test immediate support near 93.75/60 and while that holds we may expect a bounce back towards 94.75. A decisive break below 93.75 would indicate initiate signal for a fresh reversal.
Euro (1.1638) has broken above 1.1625 and is headed towards 1.1650 which needs to break on the upside to signal near term bullishness. Else while below 1.1650, view remains bearish.
EURJPY (132.90) continues to move higher. A test of 134 looks possible in the near term before a fall from there is seen.
Aussie (0.7439) looks bullish for a rise towards 0.7450 which is an immediate resistance above current levels. A break above 0.7450 if seen will be further bullish on A0.75-0.76. Watch price action near 0.7450 in the very near term.
Pound (1.3759) is rising towards 1.38 from where a rejection if seen can take it down towards 1.37-1.3650. A break above 1.38 would be bullish towards 1.39. Watch price action near 1.38 which looks likely to hold.
Dollar-Yen (114.17) has dipped slightly and could see a pull back while below 115. A break above 115 would open up chances of a rise to 117-118 in the medium term. View is bullish while above 114-115.
USDCNY (6.4156) has fallen as expected. A break below 6.41 if seen would initiate a slow fall towards 6.3750 soon. Watch price action near 6.41 to see if a bounce takes place from here.
USDINR (75.3450) could fall a bit today towards support near 75.20/10 as Euro strength and Yuan strength could favor Rupee. Also a dip in Crude prices could favor Rupee strength. But we do not negate a test of 75.75/80 while above 75.10.
INTEREST RATES
The US Treasury Yields hovers higher. 1.65% (10Yr) and 2.2% (30Yr) are crucial resistances which we expect to hold and produce a reversal going forward. It’s a wait and watch for now. The German yields have moved up at the near-end while at the far-end the yields are turning down as expected. A further fall is possible in the coming weeks. The 10Yr GoI has broken above 6.36% contrary to our expectation and can now move up further while this break sustains. Our earlier view of seeing a reversal stands negated. The 5Yr GoI on the other hand is at the upper end of its 5.66%-5.76% range and needs to see if it can break the range on the upside.
The US 2Yr (0.40%), 5Yr (1.15%) and the 10Yr (1.58%) Treasury yields remain stable at levels seen in early Asian trades yesterday while the 30Yr (2.02%) has dipped slightly. Our view remains the same. There is room to test the crucial resistances at 1.65% (10Yr) and 2.2% (30Yr) from where we expect the yields to reverse lower. However, a strong fall below 1.5% (10Yr) and 2% (30Yr) is necessarily needed to turn the outlook bearish and negate completely the chances of breaking above 1.65% (10Yr) and 2.2% (30Yr).
The German 2Yr (-0.64) and 5Yr (-0.47%) yields have moved up while the 10Yr (-0.15%) and 30Yr (0.23%) have dipped slightly. The resistance at -0.1%/-0.05% (10Yr) and 0.35%/0.45% (30Yr) has held well and we expect a fresh fall to -0.2% (10Yr) and 0.2% (30Yr) initially and then further deeper eventually over the medium-term.
The Indian 10Yr GoI (6.3873%) has risen past 6.36% contrary to our expectation. While this break sustains a further rise to 6.45%-6.5% is possible. Our earlier view of seeing a reversal to 6.2% and lower levels will get negated in that case.
The 5Yr GoI (5.7501%) has moved up sharply towards the upper end of its 5.66%-5.76% range as expected. A break above 5.76% will pave way for 5.78%-5.80% and 5.82% in the coming days. That will reduce the chances of seeing a downside break below 5.66% that we have been expecting.
