STOCKS
Dow seems to lack momentum to breach the immediate resistance. As cautioned yesterday, inability to surpass the immediate resistance can trigger a sharp corrective fall in the Dow. DAX remains higher and have room to move up further. The near-term view is bulish. Nikkei can move up but crucial resistance will be coming up that can cap the upside and trigger a corrective fall. Shanghai can fall within its broad sideways range. Sensex and Nifty can continue to trade stable in a narrow sideways range.
The Dow (27896.72, −80.12, -0.29%) seems to lack momentum to rise past 28000 decisively. The 28000-28200 resistance zone is holding well as of now. As we have been cautioning over the last few days, inability to rise past 28200 from here will be bearish to see a corrective fall to 27000-26500. A break below 27500 can trigger this fall.
DAX (12993.71, −64.92, -0.50%) remains higher and is likely to test 13200 in the near-term. As we have been mentioning for some time, a strong rise past 13200 is needed to take the index further higher to 13600-13800 eventually. The bias is bullish while the index sustains above the support at 12800.
Nikkei (23275.27, +25.66, +0.11%) remains higher and keeps our near-term bullish view intact of testing 23800-24000 on the upside. 23000-22700 can be a good support region now. But from a bigger picture, as mentioned yesterday 24000 is a crucial resistance that can cap the upside. We remain cautious to see a sharp corrective fall from 24000 towards 22000-21500 in the coming weeks.
Shanghai (3306.37, −14.35, -0.43%) remains stable between 3300 and 3350. We retain our view of seeing a fall to 3250-3200 in the near-term while the index remains below 3350 now. The broader range of 3180-3450 remains intact.
As expected Nifty (11300.45, -7.95, -0.07%) remains stable inside the 11200-11400 range and Sensex (38310.49, −59.14, -0.15%) trades stable above 38000. They can continue to trade stable. Immediate supports are at 11200 (Nifty) and 38000 (Sensex). While above these supports, the bias remains bullish to see a rise to 11600 and 39000-39500 on the Nifty and Sensex respectively in the coming days.
COMMODITIES
Crude prices are stable while Copper trades near crucial support and needs to bounce back to keep the upmove intact. Upward pressure on Gold and Silver remains intact while Dollar trades lower.
Brent (45.05) and WTI (42.32) are stable just now but could soon see an upmove. We continue to target $47-48 and $44-45 respectively for the medium term.
Gold (1958.60) has bounced back well in the last 2-sessions and could well rise back towards has bounced back after testing immediate trend support at 1874 on the daily candles and could r in the near term while the US Dollar index trades below 94. A sharp rise in the US Dollar would be needed to prevent further rise in Gold for the near term. For the next few sessions, Gold is bullish.
Silver (27.56) has also bounced well towards 27-28 as expected. A rise above 28 is needed to keep the upside momentum intact and see extension of the current rally towards 30 again in the near term; else we may expect a corrective dip from 28. While US Dollar trades lower, upward pressure on Silver is likely to remain intact.
Copper (2.8225) has fallen back, unable to sustain the earlier rise seen from 2.80. A re-test of 2.80 is possible in the next few sessions from where another bounce could be expected. Failure to bounce back from 2.80 would make Copper vulnerable to a sharp fall in the coming sessions.
FOREX
Dollar Index is attempting to bounce back but needs to see sustained upmove above 94 to move up further. Euro and EURJPY have dipped a bit but needs to break below important supports to see a corrective dip for sometime. Aussie and Pound looks stable just now within a range. Yen looks weak and could test 107+ while Rupee and Yuan also are likely to trade weak against the US Dollar today.
Dollar Index (93.3) has moved up slightly but while below 94, it could keep other currencies strong or stable against the Dollar and also keep upside momentum intact for precious metals. While we expect another attempt to test 94 on the upside, a break is needed to take it higher towards 95-96 in the longer run.
Euro (1.1803) has dipped from 1.1864 seen yesterday. A fall below 1.18 would drag it back towards 1.17 while Dollar index rises towards 94 in the near term. But we would watch price action near 1.17 which needs to break on the downside to take Euro towards 1.1630 before a sharper bounce back is seen. Else the current rally may remain intact, taking Euro up towards new highs.
EURJPY (126.25) fell from 126.75 but while above 126, view is intact for a rise towards 127 or even higher in the medium term.
Dollar-Yen (106.93) has been rising higher in the last 2-sessions and could soon rise towards 107-107.50 in the near term. View is bullish for the near term.
Aussie (0.7134) is trading near immediate support level which needs to hold in order to take Aussie higher in the near term. Else we may expect a sharper fall towards 0.70 in the near term.
Pound (1.3052) is likely to remain within 1.32-1.30 in the near term. A break on either side thereafter would be needed to take the currency on either directions for the longer run.
USDCNY (6.9478) may test 6.9640 before coming off from there in the longer run. Overall view is bullish for the near term.
USDINR (74.8450) majorly traded within 74.70-74.90 yesterday but saw a spike to 74.9250 towards the end of the session. The pair may attempt to test 75 on the upside while immediate downside could be limited to 74.70. Watch for a possible break out on either side of the 74.70-75.00 region.
INTEREST RATES
The US Treasury yields have risen further sharply and are keeping our near-term bullish view intact. The yields have room to move up further in the coming days. The German yields are also moving up in line with our expectation towards their key resistances. Inability to breach the resistances that are coming up can drag the German yields lower again. The 10Yr GoI remains lower and can dip in the near-term before reversing higher again.
The US 2Yr (0.16%), 5Yr (0.32%),10Yr (0.71%) and the 30Yr (1.42%)treasury yields have moved up sharply, especially at the far-end. Our bullish view of seeing 0.80% on the 10Yr and 1.5% on the 30Yr remains intact. If the current momentum continues then the chances of the upside extending even up to 0.90% (10Yr) and 1.5% (30Yr) cannot be ruled out.
The German 2Yr (-0.66%), 5Yr (-0.63%), 10Yr (-0.42%) and the 30Yr (0.02%) yields are moving up inline with our expectation. The 10Yr is heading to test -0.40% and the 30Yr is coming closer to 0.05% as expected. -0.35% on the 10Yr and 0.05% on the 30Yr are important resistances. While they hold, the German yields can reverse lower again.
The 10Yr GoI (5.8960%) remains lower. and keeps alive the chances of seeing a dip to 5.85%. While below 5.90%, a dip to 5.85% looks more likely now and then a fresh rise to 5.90%-5.92% can be seen again.
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