Market Morning Briefing: Aussie Is Stable And Ranged While Below 0.7480

STOCKS

Dow has dipped slightly while Dax has risen about 150 points. Dow could see ranged trade for the next few sessions while Dax can dip from 16200/300 if it rises further from current levels. Nikkei is bullish towards 29000/30000. Shanghai is bullish too while above 3500. Nifty and Sensex can rise a bit but can then fall back from respective resistances.

Dow (35369.09, -74.73, -0.21%) has dipped a bit but while above 35250 there is scope for the index to trade within 35500-35250 region for the near term.

DAX (15932.12, +150.92, +0.96%) has risen sharply to test 16000 mentioned yesterday. If 16000 holds, a rejection can be seen that can drag the index down to 15600 again in the near term else a rise above 16000 can be bullish towards 16200/300. Watch price action in the near term.

Nikkei (29894.92, +235.03, +0.79%) has risen sharply again. The view is bullish to see a test of 29000 and 30000 eventually.

Shanghai (3645.63, +23.77, +0.66%) has risen as expected and could continue to rise towards 3700. While above 3600 the view is bullish to see a test of 3700 or even 3800.

Nifty (17377.80, +54.20, +0.31%) made a high of 17429.55 and has come down to close at 17377 yesterday. Resistance is seen at 17400/500 which if holds can be bearish for Nifty in the near term.

Sensex (58296.91, +166.96, +0.29%) also came down after making a high of 58515.85 yesterday. A further rise towards 58500-59000 can be seen in the coming sessions before declining from there.

COMMODITIES

Crude prices have dipped a bit and look bearish in the coming days while below respective resistances. Gold needs to break above 1830 to head towards 1840/60. Silver can rise to test 26 on a break above 25. Copper is bullish and has scope for testing 4.40/45 in the near term.

Brent (72.43) and WTI (69.06) have dipped a bit but could be bearish in the near term while below 74 on Brent and 70 on WTI.

Gold (1829.10) looks stable just now and needs to rise above 1830 to head towards 1840/60 in the medium term. Note that a dip from 1860 would then be possible in the medium term.

Silver (24.85) has been rising over the past few days but need to break above 25 to head higher towards 26 in the medium term. Failure to rise past 25 can drag it back towards 24-23.50 in the coming sessions.

Copper (4.3265) could be headed towards 4.40/45 in the near term. Immediate view is bullish while above 4.25.

FOREX

Dollar Index trades above support at 91.75 but need to see if it rises towards 92.40/60 which if seen could drag down Euro below 1.1850 which does not look possible immediately on the euro chart itself. There is mixed outlook just now and we would wait to see which way the price moves. Aussie is stable below 0.7480. Pound can trade below 1.39. USDCNY can rise back to 6.47/48 while USDINR is indecisive too and needs a break on either side of 72.90-73.20 region to move either ways. Bias is to see a rise to 73.50/60 initially.

Dollar Index (92.1380) is holding above immediate support at 91.75 and has scope for a rise towards 92.40/60 which is contrary to outlook in Euro as it does not seem to fall below 1.1850 just now. Either of view in dollar Index and Euro can go wrong. We would wait and watch for price confirmation to decide on further movement.

Euro (1.1880) dipped to test 1.1855 before rising back again. Trade between 1.1910 and 1.1850 is possible for the near term.

EURJPY (130.33) is trading below 130.50/75 and while that holds, a short corrective dip looks possible in the near term that can be limited to 130.

Dollar-Yen (109.80) has risen and held above support at 109.60 and while that holds, a bounce back to 110.20/40 is possible. Immediate range of 109.25-110.25 looks possible.

Aussie (0.7445) is stable and ranged while below 0.7480. We may expect a few days of ranged movement for now.

Pound (1.3850) has bounced well and whole above 1.3820, we may expect trade between 1.39-1.3820 region for the near term.

USDCNY (6.4551) has bounced back well after the Friday fall and while it sustains above 6.40, it can rise again towards 6.47/48 in the near term.

USDINR (72.06) is ranged for now above 72.90/73.00. Outlook is indecisive between a rise to 73.5/60 or a fall to 72.65/50. We would wait for confirmation. But overall bias is to see a rise towards 73.50/60 initially.

INTEREST RATES

The US Treasury yields sustain higher in the early Asian trades today and are keeping the chances high of seeing a further rise from here to test their crucial resistances. Thereafter the Treasury yields can reverse lower to keep the long-term downtrend intact. The German yields are moving up in line with our expectation and have room to rise further before reversing lower again. The 10Yr and 5Yr GoI have bounced-back sharply from their day’s low yesterday. However, they have resistances ahead that can cap the upside and drag them lower again and keep the overall bearish view intact.

The US 2Yr (0.20%) Treasury yield remains stable while the 5Yr (0.80%), 10Yr (1.34%) and the 30Yr (1.96%) have risen further in the early Asian session today. The 30Yr is heading up towards 2% as expected. It can extend the upside to 2.1% on a break above 2%. The 10Yr sustains well above 1.3% and keeps alive the chances of testing 1.4%-1.45%. The price action thereafter will need a close watch for a reversal and the resumption of the long-term downtrend.

The German 2Yr (-0.72), 5Yr (-0.67%), 10Yr (-0.37%) and 30Yr (0.13%) yields remain higher and stable. We retain our view of seeing a test of -0.30%/-0.25% (10Yr) and 0.20% (30Yr). Thereafter the yields can reverse lower and retain the broader downtrend intact.

The Indian 10Yr GoI (6.1733%) has bounced-back sharply from the low of 6.1342%.A break above 6.18% can take the yield up to 6.22%. It will then delay the test of 6.1% and 6% that we have been expecting. The 5Yr GoI (5.5960%) has bounced from 5.5561% but has strong resistance in the 5.62%-5.64% which can cap the upside and keep the broader bearish view intact of seeing 5.5% on the downside.