STOCKS
Equities broadly remain bullish. Asians are in a consolidation phase within their overall uptrend. DAX looks stronger than others as it has broken above a crucial resistance.
Dow (26597.05, -59.34, -0.22%) has come-off slightly yesterday. But the outlook remains bullish. Key supports are at 26560 and 26500 which can limit the downside in the near term. Dow can test 26750 in the near term and an eventual break above it will take it further higher to 27100 in the coming weeks.
DAX (12313.16, +77.65, +0.63%) has risen past the crucial 12275-12300 resistance region. A further rise to 12400-12450 is possible in the coming days if DAX sustains above 12300
Nikkei (22281, +98.10, +0.44%) has bounced within its 22050-22350 sideways range. We continue to remain bullish and expect the Nikkeit to break the range above 22350 and rise to 22700 in the coming days.
Shanghai (3188.13, -13.49, -0.42%) dipped to test 3150 yesterday and has bounced from there. The 3150-3280 sideways range is holding as of now. But Shanghai has to rise past 3200 to ease the pressure and move higher towards the upper end of the range.
The supports at 38500 on the Sensex (39054.68, +489.80, +1.27%) and 11550 on the Nifty (11726.15, +150.20, +1.30%) has held very well. Both the indices have bounced sharply yesterday. The 3-day candle suggests a sideways move between 38500 and 39500 in the Sensex. Nifty on the other hand, has resistance at 11800 which can be tested in the near term. Whether Nifty breaks above 11800 or not will decide the next move.
COMMODITIES
Gold can continue to consolidate and even rise slightly with the sideways range in the coming sessions before we see a fresh fall. Copper has bounced from the key support and is retaining the sideways range. Among the oils, though Brent has little room on the upside, the WTI has already tested the crucial resistance and is giving early signs of a pull-back move. Crude inventories increasing much more than expectation has capped the upside for the moment.
Gold (1275) is still stuck around 1270 has bounced from 1268. While above 1270, a test of 1280-1283 is possible in the near term. It can continue to consolidate sideways between 1270 and 1283 for some more time before we see a fresh fall to 1260.
Silver (14.92) has bounced from the key support level of 14.75 mentioned yesterday. If it sustains above 14.90, a test of 15.00-15.05 is possible in the coming sessions. A range bound move between 14.75 and 15.05 looks likely in the near term.
Copper (2.91) is bouncing from the key support level of 2.88. This keeps the 2.88-2.99 sideways range intact. A test of 2.92 is likely in the near term. A break above 2.92 will take copper higher to 2.96 and 2.99 – the upper end of the range in the coming days.
Brent (74.35) is stuck in a narrow range between 74 and 74.75 over the last couple of days. We continue to remain cautious as there is a strong resistance near 76. A pull-back from there can trigger a corrective fall to 73-72 going forward.
WTI (65.60) is looking weaker than Brent. It has tested the key resistance around 67 already and is giving early signs of a corrective fall. A test of 64.75-64.5 looks likely in the coming sessions.
FOREX
US Dollar looks strong and could rise towards 99 while Euro may test 1.11-1.10 in the medium term. Yuan and Rupee may weaken while Aussie tests important support at current levels.
The Dollar Index (98.01) moved up sharply yesterday to 98.05, breaking above the weekly horizontal resistance of 98. If 98 holds immediately, it could fall towards 97-96 in the coming weeks; else a further rise towards 99 is likely to be seen soon.
The Euro (1.1158) tested 1.1140, breaking below the daily supports near 1.12 and 1.1150 as seen on the daily candles chart. There is scope of falling towards 1.11-1.10 in the medium term. 1.11 could act as a decent support just now leading to some interim corrective upmoves but overall the longer term trend looks bearish.
The Euro-Yen (125.03) has fallen to 125. As mentioned earlier there is scope of testing 124 or even 123 on the downside. Near term looks bearish.
Dollar-Yen (111.98) tested 112.40 yesterday but has now come back to trade below 112. While we consider a rise towards 112.50-113, both are important resistances above current levels. At the same time near term support is also visible near 111.50 which if holds strong could pull up Dollar Yen. A sharp rise in Dollar Index towards 99 could also pull up Dollar Yen.
The Aussie (0.7021) fell to test support at 0.70. If that holds, Aussie could see some corrective bounce towards 0.71/72. Else a fall towards 0.69 is on the cards for the near term.
USDCNY (6.7260) is looking bullish towards 6.74/76 in the coming sessions and is likely to rise while above 6.72.
Dollar-Rupee (69.88) is likely to test 70.0-70.25 on the upside while the pair holds above 69.75.
EURINR (78.0985) has immediate support at 78 on the daily and lower support at 77 on the weekly charts which is likely to hold in the near term.
INTEREST RATES
The US yields have fallen as expected. The 2Yr (2.32%), 5Yr (2.31%), 10Yr (2.52%) and 30Yr (2.93%) fell from 2.35%, 2.36%, 2.56% and 2.98% seen yesterday, in line with our expectation. The yields look further bearish in the near term. The 5yr, 10yr and 30yr could target 2.29%, 2.48% and 2.90/88% respectively in the next few sessions before pausing.
The US-JGB 10YR (2.56%) is sharply down from 2.60% resistance mentioned yesterday. While the resistance holds, it could fall eventually pulling down Dollar Yen with itself. Watch resistances at 112.50 and 113 on Dollar Yen.
The 10Yr GOI (7.5487%) oscillated around 7.55% yesterday. While we consider a dip to 7.50%, we would look for any immediate bounce to higher levels of 7.60/65% in the near term.
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