Dow and DAX hover at their highs and may have room to move up further from here before seeing a reversal. Dow will have to fall below 33000 and DAX below 15000 to come under pressures for a fresh fall. Nikkei can fall towards the lower end of its 28000-30500/31000 range. Shanghai remains bearish and can fall further on a break below 3400. Sensex and Nifty have tumbled yesterday and remain bearish to fall further from here. However, an intermediate bounce cannot be ruled out before a deeper fall is seen.
Dow (33745.40, ?55.20, -0.16%) remained stable below 33800. A test of 34000 on the upside is still possible. As mentioned yesterday, Dow has to fall below 33000 to bring back our earlier view of seeing a corrective fall to 32000-31000 into the picture. We will have to wait and watch.
DAX (15215, ?19.16, -0.13%) is stuck around 15200 over the last few days. A rise to 15500-15700 is still possible before a reversal is seen. As mentioned yesterday, a fall below 15000 has to be seen to bring DAX under pressure for a fall to 14600-14400 and even lower levels.
Nikkei (29837.19, +298.46, +1.01%) is hovering between 29500 and 30000. We retain our view of seeing a fall to 28500-28000 in the coming days within its 28000-30500/31000 range. Any rise above 30000 from here can be capped at 30500.
Shanghai (3424.63, +11.68, +0.34%) remains stable above 3400 after having fallen over the last two trading days. Our view of seeing 3350 on the downside remains intact. A break below 3350 can drag Shanghai to 3300-3250 and even 3200 over the medium-term.
Nifty (14310.80, ?524.05, -3.53%) tumbled below 14600 to test 14200 as expected. 14200 will be a crucial level. A bounce from there can see 14600 again on the upside. But the broader picture will continue to remain bearish to see a break below 14200 eventually and test 14000-13800 on the downside going forward
Sensex (47883.38, ?1707.94, -3.44%) has closed below 48000 and keeps our bearish view intact of seeing 47000-46000 on the downside. A short-lived bounce to 49000 cannot be ruled out before the above mentioned fall is seen.
Crude prices are stable and may continue to range in a narrow region for some more time before a sharp break out is seen. Copper may break below 4 to test 3.90 before bouncing back from there to higher levels. Silver is trading around 25 and a sustained rise above 25 can only pave way for 26-27 in the medium term; else we will have to bring in 24-23 into the view.
Brent (63.49) seems to have support at 62 which if holds could produce a bounce to 64-66 llevels in the near term before falling off from there back to 62-61 levels. WTI (59.89) on the other hand may trade within 57-61 for a few sessions.
Gold (1735.10) is holding below 1760 for now and unless the level breaks on the upside we cannot look for a sharp rally in price towards 1800-1820 or higher. While below 1760, we continue to look at range of 1760-1720 to hold for some more time.
Silver (24.93) has dipped slightly below 25 and if the price does not manage to sustain above 25, we may expect a fall towards 24-23 eventually. Only a bounce back to 25+ ;levels would bring back chances of re-testing 25.75-26 and moving higher towards 27 slowly in the medium term. Watch price action around 25.
Copper (4.009) has fallen well to test initial support at 4 and if it fails to hold, we ay expect a test of 3.90 before bouncing back higher towards 4.20 in the medium term.
Dollar Index and Euro are sideways and could soon see a break out in the near term which could lead to a fall in the index to 91.50 while Euro may rise to 1.195-1.20. Aussie, Pound and EURJPY also looks ranged just now but a sharp move is due in the next couple of weeks. Dollar Yen may trade within 109-110 while USDCNY may rise to 6.56/58 but has scope for a possible fall to 6.52 in the near term. .
Dollar Index (92.217) needs to break below 92 in order to fall sharply towards 91.50 or lower and that may happen within the next 5-6 session after the current sideways consolidation is over.
Euro (1.1896) is also trading sideways within a narrow range and may attempt to rise higher towards 1.1950-1.20 over the medium term.
EURJPY (130.42) continues to trades sideways below 131 and could soon break out on the upside targeting 132-135 in the longer run. The trigger would be a break above 131.
Dollar-Yen (109.63) seems to be fluctuating within 109-110 for the near term and may test 110 before falling off from there. While above 109, we may keep chances of an upside break in the medium term. Only a break below 109 would indicate that a near term top has been formed and the pair may head lower.
Aussie (0.7606) may have chances of falling to 0.75 in the near term before bouncing back to 0.76-0.77 in the medium term again.
Pound (1.3741) has bounced back well over the last 2-sessions and may face resistance near 1.38 from where another dip looks likely to 1.36 in the medium term.
USDCNY (6.5466) has dipped slightly. On the downside there is scope for a fall to 6.5270 but while above that we do not negate a possible chance of rising back to 6.56/58 in the medium term.
USDINR (75.0650) is closed today for Gudi Padwa and tomorrow for Ambedkar Jayanti. On resuming trade on Thursday, we may expect a pull back towards 74.60/50 on the downside while 75.15/20 may holdon the upside.
The US Treasury yields can consolidate at higher levels and the broader trend will continue to remain up as long as they sustain above their supports. The Consumer Price Index (CPI) data release today will need a close watch to see how it can influence the yield movement. The German yields can also continue to consolidate within their uptrend for some time. One more leg of rise is possible before a reversal happens. The 10Yr GoI can consolidate or see a corrective bounce before resuming its downmove.
The US 2Yr (0.16%), 5Yr (0.88%), 10Yr (1.67%) and 30Yr (2.34%) Treasury yields remain stable. Our view remains the same. The yields can continue to consolidate at higher levels for some more time. As long as they stay above 1.55% (10Yr) and 2.2% (30Yr), the trend will remain up and the chances of seeing 1.9%-2% (10Yr) and 2.9%-3% (30Yr) cannot be ruled out over the medium-term.
The German 2Yr (-0.72%), 5Yr (-0.64), 10Yr (-0.30%) and the 30Yr (0.26%) have inched up further with their -0.35/-0.25 (10Yr) and 0.2%-0.3% (30Yr) range. As mentioned yesterday, we expect this sideways range to resolve on the upside eventually and rise to -0.20%/-0.15% (10Yr) and 0.35% (30Yr) can be seen over the medium-term. A strong fall below -0.40% (10Yr) and 0.20% (30Yr) is needed to turn the outlook bearish.
The 10Yr GoI (6.0147%) is oscillating around 6% and keeps the broader bearish view intact. A consolidation around 6% or a corrective bounce to 6.06%-6.08% is a possibility before a fresh fall to 5.9% is seen.
7:00 12:30 UK Trade Bal
Expn -16.16 GBP (Bln) …Expected -10.4 GBP (bln) …Previous -9.8 GBP (bln)
12:30 18:00 US CPI (MoM)
Expn 0.2 % …Expected 0.5 % …Previous 0.4 %
12:30 18:00 US Core CPI (MoM)
Expn 0.09 % …Expected 0.2 % …Previous 0.1 %
DATA YESTERDAY:-
—————
EU Retail Sales
Expn 1.37 % …Expected 1.3 % …Previous -5.2 % …Actual 3.0 %
IN IIP
Expn -2.97 % …Expected -3.0 % …Previous -0.9 % …Actual -3.6 %
IN CPI
Expn 5.49 …Expected 5.40 …Previous 5.03 …Actual5.52
