STOCKS
Dow remains higher and has room to move further up. DAX continues to consolidate within its uptrend. Nikkei and Shanghai has to break their key resistances to avoid further fall. Sensex and Nifty continues to remain mixed and can consolidate sideways before we see a fresh leg of upmove.
Dow (28036.22, +31.33, +0.11%) sustains above 28000 but needs to gain momentum. The outlook remains bullish to test 28250-28400 in the coming days after which a corrective fall is possible. As mentioned yesterday, only a strong fall below 27500 will turn the outlook negative.
DAX (13207.01, -34.74, -0.26%) retains its narrow 13100-13300 range. The sideways consolidation can continue for some more time and the DAX is likely to break above 13300 and resume its uptrend towards 13400-13500 eventually.
The bounce-back move in the Nikkei (23348.87, -67.89, -0.29%) seems to be losing steam. As mentioned yesterday, a strong rise past 23500 is needed to bring back the bullishness. While below 23500 a fall to 22800-22600 cannot be ruled out before the uptrend resumes
Shanghai (2916.81, +7.61, +0.26%) has bounced well and needs to see if it can rise past 2920 or not. A decisive break above 2920 will ease the downside pressure and pave way for a revisit of 3000 levels. But while below 2920 the index will remain vulnerable to test 2870-2865 on the downside.
Nifty (11884.50, -10.95, -0.09%) oscillated around 11900 all-through yesterday. The near-term view continues to remain mixed and the index can remain range bound between 11800 and 12050. The bias within this range is bullish to see a break above 12050 and a rise to 12200-12300 eventually.
Sensex (40284.19, -72.50, -0.18%) on the other hand can trade in the range of 40000-40750. . The index is likely to break this range 40750 and rise to 41100.
COMMODITIES
Commodities are mixed. Crude prices, Gold and Silver could see a dip from current levels. Copper could head towards support too from where a bounce looks likely in the near term.
Brent (62.31) and Nymex WTI (57.03) have dipped sharply holding below immediate resistance levels of 64 and 58 respectively. Although WTI had scope of rising towards 58-59 in the near term, while 64 poses rejection on Brent, it could limit the upside for WTI too in the near term. We would continue to watch 64 on Brent and 58 on WTI for the rest of the sessions this week.
Gold (1469.80) has dipped again after testing 1480 briefly. While below 1480, we may see a fall towards 1440 in the near term.
Silver (17.00) is likely to fall towards 16.50-16.25. Near term looks bearish.
Copper (2.6240) is in an uptrend since Sep’19 and within that it may test support at 2.60 just now before again bouncing back to higher levels.
FOREX
News of China having issues with Trump’s unwillingness to roll back tariffs and doubts over Beijing signing an agreement continues to weigh on the currencies and could keep prices volatile in the near term.
Dollar Index (97.83) has bounced from 97.68 but is likely to be a short correction within the downmove that may target 97.50 which is an important trend support.
Euro (1.1071) is also likely to test 1.1094-1.1100 in the next few sessions before coming off from there.
Dollar-Yen (108.63) could get some support near 108.5 and while that holds, it could head higher targeting 109.50 again.
EUR-JPY (120.28) looks bullish towards 121-122 in the near term while it holds above 119.
Pound (1.2952) remains stuck in the 1.30-1.28 region and a sharp break on either side is needed to indicate on further direction of Pound.
Aussie (0.6791) dipped back giving away gains seen in the previous session. Now, we may expect a fall towards 0.6750-0.6725 in the near term.
USDCNY (7.0255) if breaks above 7.03 could rise to test 7.04/05 on the upside before declining from there again. Very near term looks bullish.
Dollar Rupee (71.8525) has lost all gains seen on Friday by rising sharply from 71.5850. It would be important to see if the rise sustains and the pair moves up towards immediate resistance at 72. Broadly, we may expect trade in the 71.50-72 region.
INTEREST RATES
Uncertainty over the US-China trade deal is keeping the market slightly cautious. As a result, the US Treasury yields have been coming-off over the last few days and has room to fall further. The German yields can dip/consolidate within their overall uptrend. The 10Yr GoI has declined below their key supports and can fall further.
The US 2Yr (1.59%), 5Yr (1.63%), 10Yr (1.80%) and 30Yr (2.29%) have been moving down over the last few days. The view is turning negative. The 30Yr can break its immediate support at 2.28% and fall to 2.20% in the coming days. The 10Yr can test its support at 1.75% a break below which will see the fall extending to 1.70% and 1.65%.
The German 2Yr (-0.64%), 5Yr (-0.58%) and 10Yr (-0.34%) remained stable while the 30Yr (0.18%) inched higher by 3 bps. The 0.16%-0.14% support zone is holding well for the 30Yr. While above this support zone a rise back to 0.25%-0.27% is possible again. The 10Yr has an important support at -0.40 which can be tested in the near-term and a bounce is possible thereafter.
The 10yr (07.26 GS 2029) GoI (6.6489%) has declined below the key support level of 6.60% which we had expected to hold. The outlook is bearish now to test 6.60% from where a bounce is possible.
The 10yr (06.45 GS 2029) GoI (6.4827%) fell sharply breaking below 6.50% as against our expectation. 6.48% is an important level to watch now. A break below it will increase the danger of seeing a further fall to 6.42%.
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