STOCKS
Equities seem to have recovered from crucial supports. Dow can test crucial resistance at 36000/100 before falling from there in the medium term. Dax can rise towards 15900 before again falling off from there. Nikkei has risen well and looks bullish for a rise to 30000/31000 on sustained trade above 29500. Shanghai is bullish while above 3500. Fall in Nifty can be limited to 17400 for now before a bounce back to 18000 or higher is seen. Sensex can remain within 59000-60000 for now.
Dow (35819.56, +89.08, +0.25%) has risen and is headed towards crucial resistance near 36000/100. While that holds, a decline back to 35500-35000 is possible in the medium term. A range of 35000/500-36000/100 can hold for the near term.
DAX (15688.77, -7.56, -0.048%) has dipped further. The range of 15900-15400 is holding well. A strong break on either side is needed for further directional clarity. But while below 15900, view remains bearish for the medium term.
Nikkei (29538.15, +645.46, +2.23%) has risen sharply today, breaking above the resistance at 29250/500. Any pull back can take it down to 28500-28000 in the near term. Else an eventual rise to 30000/31000 looks possible in the medium term.
Shanghai (3545.83, -1.51, -0.045%) has bounced from 3500 after falling sharply for 3-consecutive sessions from 3625. While above 3500, a rise to 3600 looks possible else we night have to look at lower targets of 3400.
Nifty (17671.65, -185.6, -1.04%) went up to make a high of 17915.85 and has come down sharply from there. A break below 17600 can take the index down towards 17400 in the near term. 17400 is a good support which can hold for now and produce a bounce towards 18000 in the medium term. In case 17400 breaks, the view would be further bearish towards 17000 before any reversal is seen. Preferred is to see a bounce from 17400/600 levels.
Sensex (59306.93, -677.77, -1.13%) has come down further on Friday. The view is to see a dip towards 59000/58500 before we see a bounce towards 60000/61000 again. A fall below 59000, if seen can pull the index towards lower support at 57000.
COMMODITIES
Crude prices have dipped with WTI rising more than Brent and reducing the Brent-WTI spread. As the spreads fall it could indicate an eventual fall in crude prices going forward. Gold can be ranged within 1810-1755 both being important resistance and support levels. Silver can be ranged within 23.50-25 while Copper is bullish towards 4.50 while above support at 4.30.
Brent (83.47) and WTI (83.17) have dipped again. While above 80 the view is bullish to see a rise towards 85/86 in Brent and 84/85 in WTI. The Brent-WTI spread (0.3) has come down sharply and could be indicative of a possible fall in crude prices in the near term.
Gold (1787.60) has immediate resistance at 1810 and support near 1760/55. A range of 1810-1755 may hold for the near term. While Dollar trades strong, Gold can come off to the lower end of the mentioned range in the near term before attempting to bounce back again in the longer run.
Silver (23.91) can rise towards 25 if the price holds above immediate support near 23.50. A range of 23.50-25 may hold for the near term.
Copper (4.3905) has support at 4.30 which if holds can produce a rise towards 4.50/55 in the near term. View is to see a rebound while above 4.30.
FOREX
Volatility picks up in currencies as Dollar Index rose sharply from levels below 93.50 to head to 94+ now. There is scope for a further rise to 95. Euro is pulled down to levels below 1.16 as resistance near 1.17 is holding well. Further bearishness towards 1.15 initially and lower towards 1.14 is a possibility. Pound and Aussie trade lower on Dollar strength. Dollar Yen has bounced well and can move up eventually. USDCNY may trade within 6.38-6.41/42. USDINR may trade within 74.70/80-75.00 for the next 3-sessions but we would keep a close watch for any breakout.
Dollar Index (94.168) rose sharply from 93.28 seen last week and has scope to rise towards 95-95.50 while above 94. Watch if the index sustains above 94 to rally higher.
Euro (1.1557) rose sharply to 1.1692 on Thursday but all gains were wiped off as resistance at 1.17 seem to hold well pushing the Euro sharply down to levels below 1.16 again now. Note that 1.17-1.1750 may hold as strong resistance for the medium term keeping price lower. Sustained trade below 1.16 may open up chances of a fall to 1.15 or even towards 1.1450 on the downside. Such a fall can be accompanied by Dollar Index rising towards 95.
EURJPY (131.84) is holding above 131.50 just now and has resistance near 133.50 on the upside which if holds can keep the pair within 131.50-133.50 for the near term. A break above 133.50, if seen in the medium term would again be bullish, For now a consolidation looks likely within the mentioned levels.
Aussie (0.7512) has immediate resistance near 0.7550 which if holds can push the exchange down towards 0.7450 or lower in the coming sessions. A break above 0.7550, if seen would break above the immediate resistance indicating a rally towards 0.78 in the longer run, but that looks less likely for now.
Pound (1.3684) fell sharply from levels above 1.38 as Dollar Index rebounded from levels below 93.50. While below immediate resistance at 1.3850, view is bearish for a fall to 1.355-1.35.
Dollar-Yen (114.08) is holding above our mentioned support at 113-113.25 and while that holds, a rise back to 114.50-115 or higher cannot be negated. The rise in Dollar-Yen would be in line with Dollar strength for the near term.
USDCNY (6.4044) has risen well and could face rejection from 6.41/42 in the near term which could lead to a corrective fall to 6.39/38 before again resuming the upmove. Overall tend looks bullish for the longer run while above 6.3750-6.38.
USDINR (74.88) can continue to range within 74.70/80-75.00 region for this week, as India enters the Diwali mood and week remains short with three sessions to go. Watch for any break on either side of the mentioned range.
INTEREST RATES
US Treasury Yields have dipped at the far-end. The chances are high for the 10Yr and 30Yr to dip further ahead of the US Federal Reserve meeting on Wednesday. The outcome of this meeting might be key in deciding whether the yields will sustain above their crucial supports or will break below it. The German Yields look mixed. The 10Yr is range bound while the 30Yr continues to fall and has room to dip further in the coming days. The 10Yr GoI is inching up towards the upper end of our expected 6.3%-6.4% range while the 5Yr looks relatively much stronger and can see a fresh rise breaking the 5.66%-5.76% range on the upside.
The US 2Yr (0.50%) and the 5Yr (1.18%) Treasury yields remain stable while the 10Yr (1.55%) and the 30Yr (1.93%) have dipped. On the charts, the chances are looking high for the 10Yr and the 30Yr to test 1.5% and 1.85% respectively on the downside ahead of the US Federal Reserve meeting on Wednesday. A strong break below 1.5% (10Yr) and 1.85% (30Yr) is needed to see a deeper fall. Else a bounce-back move to 1.65%-1.7% (10Yr) and 2% (30Yr) cannot be ruled out.
The German 2Yr (-0.60%), 5Yr (-0.39%) and the 10Yr (-0.11%) yields have moved up while the 30Yr (0.13%) has dipped. The 30Yr keeps intact the near-term bearish view of testing 0.1%-0.05% on the downside. The 10Yr on the other hand is oscillating between -0.1% and -0.2% for now. But the bias is bearish to break -0.2% and fall to -0.3% and -0.4% eventually.
The Indian 10Yr GoI (6.3718%) remains higher but stable. A test of the upper end of our expected range of 6.3%-6.4% looks likely now. It will have to be seen if the 10Yr GOI can breach 6.4% and extend the rise to 6.45%-6.5% which is needed to negate our view of seeing a fall to 6.2%.
The 5Yr GoI (5.7529%) looks relatively stronger than the 10Yr GoI. The chances are looking high for it to break the 5.66%-5.76% range on the upsisde and see a rise to 5.80%-5.82% and even higher in the coming days.
