STOCKS
Mixed movements seen on global equities. Dow and Dax can rise towards 36000 and 15800/900 while above 35500 and 15400 respectively. Nikkei can fall while below 29500 towards 28000 and needs to eventually break above 29500 to move higher in the coming weeks. Shanghai is bullish towards 3700-3800. Nifty and Sensex are also bullish for the near term towards 18400/600 and 62000 while above respective supports.
Dow (35609.34, +152.03, +0.43%) tested 35670 yesterday before falling off from there. A test of resistance at 36000 is possible before reversing from there.
DAX (15522.92, +7.09, +0.046%) has risen slightly but while above support at 15400 there is scope to rise to 15800/900 before declining. A range of 15800/900-15400 looks possible for the near term.
Nikkei (29161.71, -93.84, -0.32%) has come off slightly today; the view is bearish to see a fall towards 28000 while below 29500. A strong break above 29500 would be needed for the view to be bullish towards 30000/31000. Watch price action while below 29500 for the next few sessions to see if the index manages to break on the upside.
Shanghai (3602.34, +15.90, +0.44%) has risen above 3600 and if the rise sustains, we can be bullish towards 3700-3800 in the near term.
Nifty (18266.60, -152.15, -0.83%) opened higher yesterday and made a low of 18209.35 in line with our expectations of seeing a corrective fall towards 18200.While above 18200, view is bullish to see a test of 18600 again. However, if a fall below 18200 is seen the corrective fall can extend to 18000 before reversing higher.
Sensex (61259.96, -456.09, -0.74%) has support at current levels, a bounce towards 62000 and eventually 63000 is possible.
COMMODITIES
Crude prices have risen today as Weekly US inventories continue to fall and on news that Russia won’t go out of its way to offer extra gas to European consumers to ease supply tightness unless it gets approval for a controversial pipeline. View is bullish for crude in the near term but could be limited to 87/86 on Brent and 85 on WTI. Gold can remain within 1790-1760 unless a break on the upside is seen soon. Silver has risen well and can rise towards 25. Copper can bounce from support near 4.55/60 to 4.90 soon.
Brent (85.71) and WTI (83.47) have both risen well. A rise in Brent towards 86-87 and towards 85 on WTI cannot be negated in the near term before falling off from there.
Gold (1787.70) has risen above the 1780 as mentioned. A strong break above 1790 is needed for the view to be bullish towards 1800-1820. While below 1790,a sideways range between 1760-1790 can be seen before we see a decisive break on either side.
Silver (24.50) has risen well as expected and has room to test 24.50\25 on the upside.
Copper (4.6305) has support near 4.55/60 which if holds can eventually produce a rise towards 4.90on the upside.
FOREX
Dollar Index trades below 93.75 and could fall towards 93, pulling up Aussie, Pound, Euro and other currencies higher. Euro can rise to 1.17/1710 while Aussie and Pound can rise to 0.76 and 1.39 respectively in the coming sessions. EURJPY can face stiff rejection from crucial resistance near 134 before falling towards 132. Dollar-Yen can fall while below 114.75 to test 113.50. USDCNY is bearish while below 6.40. USDINR has come down sharply and can bounce from support zone of 74.60/50-74.80 in the very near term.
Dollar Index (93.513) may be bearish towards 93 while below 93.75 and can pull up Euro and some other currencies higher in the near term.
Euro (1.1666) trades higher and while above 1.1625/50, there is possibility to see a rise towards 1.17/1.1710 in the near term. No immediate signs of breaking below 1.16 for now.
EURJPY (133.36) trades higher and could test crucial resistance at 134 before facing stiff rejection. While Dollar Yen trades higher and Euro moves up, EURJPY can come down slowly.
Aussie (0.7541) continues to rally and can test 0.76 or higher on the upside in the near term.
Pound (1.3829) continues to trade above 1.38 and while the rally continues, we may expect a test of 1.39 before any decline is seen from there.
Dollar-Yen (114.28) trades above 114 just now but has immediate resistance at 114.75 which if holds can have scope to push the pair lower towards 113.75/50 before a bounce is seen. Else a sharp rise above 114.75 if seen and sustained can take it towards 115-115.50. Watch price action while below 114.75 for now.
USDCNY (6.3890) is bearish while below 6.40 and has scope to fall towards 6.37.50 or even to 6.36 on the downside.
USDINR (75.8750) indeed broke below 75.10 initially yesterday and then declined towards 74.80 as expected. The 74.80-74.60/50 support zone comes into the picture and a break below 74.80 would drag the pair further down to 74.60/50 before a bounce is seen from there.
INTEREST RATES
The US Treasury Yields remain higher. The 30Yr has moved up further and can test 2.2%. The 10Yr can rise to 1.75% and even 2% if it sustains above 1.65% which will then negate our view of seeing a reversal. The German yields are likely to see a fresh fall in the coming days as the key long-term resistances seem to hold well for now as expected. The 10Yr GoI is bullish to rise further in the coming days while above 6.35%. The 5Yr on the other hand is mixed and has equal chances of moving on either side from current levels.
The US 2Yr (0.39%), 5Yr (1.17%) and the 10Yr (1.67%) Treasury yields remain higher and stable. The 30Yr (2.15%) has risen further and is heading up towards 2.2% in line with our expectation. It is important to see if it can rise past 2.2% or not which will be key in deciding the subsequent move. The 10Yr can rise to 1.75% and even 2% if it sustains well above 1.65%. That in turn will negate our view of seeing a reversal.
The German 2Yr (-0.67), 5Yr (-0.48%) and the 10Yr (-0.13%) yields have reversed lower while the 30Yr (0.29%) remains stable. Our view remains the same. We expect the yields to reverse lower and see a fall to 0.2% (10Yr) and 0.2% (30Yr) initially and then further deeper eventually over the medium-term. -0.1%/-0.05% (10Yr) and 0.35%/0.45% (30Yr) will be the cap on the upside.
The Indian 10Yr GoI (6.3732%) tested 6.4% and has come-off from there. While above 6.35%, the outlook is bullish to test.45%-6.5% in the coming days.
The 5Yr GoI (5.7424%) failed to sustain the upside breakout of the 5.66%-5.76% range. It rose to 5.7785% and has come-off from there. The immediate outlook is mixed. There are equal chances of seeing either 5.8% on the upside or 5.7% on the downside from here. We will have to wait and watch.
