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Market Morning Briefing: Dollar-Yen Has Not Been Able To Rise Above 109.40

STOCKS

The rise after the US Fed meeting has not sustained. The global equities have failed to get a strong follow-through buying thereafter. This keeps our broader cautious view of seeing a sharp correction in the equities with limited upside from here. 33100 on the Dow is holding. DAX has resistance at 14900-15000. Nikkei and Shanghai have come-off below 30000 and 3450 again indicating lack of momentum to move up further. Sensex and Nifty did not even take part in the rise yesterday and continued to fall. They are under pressure to fall further in line with our expectations.

Dow (32862.30, −153.07, -0.46%) failed to sustain the break above 33100 and has closed below 33000. While 33100 holds, we expect a corrective fall to 32000-31000 initially and even deeper eventually in the coming weeks. A break below 32650 can trigger this fall. As mentioned yesterday, a strong follow-through buying above 33100 is needed to be bullish for a further rise to 34000 and negate our view of seeing a corrective fall to 32000-31000.

As expected DAX (14775.52, +178.91, +1.23%) has risen past 14600 and is heading towards 14900-15000. We reiterate that 14900-15000 is a strong resistance that can cap the upside. A corrective fall to 14000-13800 is possible from there. A sustained break above 15000 is needed to negate the above mentioned fall.

Nikkei (29954.80, −261.95, -0.87%) has failed to sustain the break above 30000 and has come lower again. Inability to rise above 30000 will negate the chances of a rise to 32000 mentioned yesterday. A fall below 29000 from here will bring back the earlier bearish view of seeing 27000 on the downside.

Shanghai (3432.82, −30.25, -0.87%) has come below 3450 again. Our view remains the same. 3500 is a key level to watch. A strong rise past 3500 is needed to negate the danger of seeing a fall to 3250-3200. While below 3500 the outlook is bearish.

Nifty (14557.85, −163.45, -1.11%) has broken its 14600-15400 range on the downside as expected. 14450 is the next crucial level to watch. A strong break below it will pave way for a fall to 14200-14000 that we have been mentioning for some time. The downside can extend up to 13800 eventually.

Sensex (49216.52, −585.10, -1.17%) is at the lower end of its 49000-52000 range. It can break this range on the downside and test 48500 initially. A further break below 48500 will then pave way for the fall to 48000-47000 that we have been mentioning.

COMMODITIES

Rising cases of Covid in Europe and halting of the Astrazenca vaccines due to possible side effects lead to fall in oil prices. Adding to this is the Dollar strength after the FOMC policy meet and rise in US weekly crude inventory by 2.4mln barrels for week ended 12th March as compared to a week earlier. Crude prices may continue to fall for the near term before any reversal is seen again. Gold and Silver may remain ranged within 1700-1750 and 25-26.30 respectively for now while Copper needs to hold above 4 to keep the bullish possibility intact.

Brent (63.54) and WTI (60.26) have fallen as expected breaking below our mentioned 65 and 61 on the Brent and WTI respectively. WTI has immediate support at 60 on the 3day candles which if breaks could open up chances of a fall to 55 eventually. Brent on the other hand does not seem to have any immediate supports below current levels and could fall towards 58-55 on a break below 60. Immediate view is bearish until we see a fresh reversal again.

Gold (1728.70) has dipped well and could not sustain a rise above 1750. We would look for a re-attempt of 1760/80 over the near term if Dollar weakens again over the next few sessions.

Silver (25.99) has dipped too and has scope for a test of 25 while below 26.30. Broad range of 26.30-25 may hold for the near term.

Copper (4.0805) has dipped but needs to sustain above 4 in order to move up towards 4.20/30. Else a fall to 3.80 could be on the cards before the expected rise is seen. Watch price action near 4.00.

FOREX

Fresh rise in Dollar Index within the 91-92 range has brought in weakness in other currencies. Euro is also stuck in the 1.19-1.20 range while EURJPY could hold below immediate resistance near 131 on the 3-day candles. Pound and Aussie looks ranged for the near term and have some scope of falling lower, breaking below immediate supports near 1.38 and 0.77. USDCNY has risen well and could head towards 6.55 while USDINR may hold above 72.40 and attempt a rise to 72.60/80 over the next 2-3 sessions.

Dollar Index (91.49) rose sharply from levels near 91.30 to 91.95. Immediate range of 91-92 needs to break on either side for the index to move sharply and throw some clarity on further direction from here. While our preference is to see a break below 91, the range of 91-92 seems to hol