Equities continue to look mixed. Dow is oscillating around 34000. It has to sustain above 33500 to move up towards 35000. DAX seems to lose momentum and the expected corrective fall can happen from here itself without seeing an extended rise to 15700. Nikkei retains its 28000-31000 range. Shanghai is hovering at the upper end of its 3350-3500 and is likely to come-off and retain the range. Sensex and Nifty remain weak and can consolidate in a narrow range before extending the fall.
Dow (34137.31, +316.01, 0.93%) is oscillating around 34000. While above the immediate support level of 33500, the bullish outlook of seeing 35000 on the upside will remain intact. Dow has to break 33500 and then subsequently fall below 33000 to become bearish to see 32000-31000 on the downside.
DAX (15195.97, +66.46, +0.44%) has come-off sharply after testing 15500 on Monday. The chances of testing 15700 are getting reduced and the fall to 14500-14000 that we have been mentioning might happen from here itself.
Nikkei (29101.20, +592.65, +2.08%) tested 28500 as expected and has risen back sharply from the low of 28419.84. The 28000-30500/31000 range remains intact and Nikkei can move up to 30000-30500 while it sustains above 29000 now.
Shanghai (3474.23, +1.30, +0.04%) hovering near the upper end of its 3350-3500 range. We expect the range to remain intact and a fall to 3400-3350 in the coming days. A strong break above 3500 is needed to negate the fall and turn the view bullish to see 3600 on the upside
Nifty (14296.40, ?63.05, -0.44%) can remain range bound between 14200 and 14600 while it sustains above 14200 now. However, the broader bias remains bearish to see a break below 14200 and a fall to 14000-13800 eventually.
Sensex (47705.80, ?243.62, -0.51%) can remain sideways between 47500 and 49000 for some time. The overall view remains bearish to see 47000-46000 on the downside in the coming weeks.
Overall precious metals and Copper look bullish for the medium term and continue to rally over the coming weeks. Only crude prices seem to have come off on news of second wave of Corona Virus that is spreading again and forcing nations to think of partial or total lockdown as the need may be. Additionally, the API(American Petroleum Institute) on Tuesday reported that the US supplies rose by 436,000 barrels for week ended 16th April that took crude prices down. Yesterday, news sources suggested a possible talk of nuclear deal between Iran and US by May’21 that could lead to addition of two million barrels/day or more to the market if the US may ease sanctions on Iran’s crude exports. This could be further negative for crude prices and could build downward pressure on crude in the near term.
Brent (64.76) has near term support at 64 which should necessarily hold to produce a bounce back towards 68-70 in the medium term. Failure to rise above 64 would indicate fresh bearish signal towards 60 or lower in the longer run. WTI (60.79) on the other hand has scope for a fall to 57 if it breaks below 60. Immediate view is bearish to 57 before a bounce is seen.
Gold (1794.90) has been rising while above 1760, exactly as expected and could now test 1800-1820 in the near term from where a short corrective fall could be seen before the price resumes its upward rally towards 1860 (upper resistance above 1820)
Silver (26.57) has been rising as expected and could face initial rejection from 27 or from higher levels of 28 soon. A break above 28 would be needed for Silver to indicate further bullishness in the longer run. Watch for a possible rejection from 27-28 levels in the medium term. Immediate view is bullish.
Copper (4.2595) is holding stable near higher levels of 4.25. But overall view is bullish towards 4.40 which could be an interim and decent resistance that may hold in the medium term followed by a corrective dip. In the longer run, we may expect the overall uptrend to hold intact while the price trades above 4.10 (strong support)
Dollar Index trades slightly higher but the overall trend is bearish. Euro has dipped a bit and could remain within 1.19-1.21 for now while 1.21 acts as a decent resistance. EURJPY may remain below 131 while Pound and Aussie also look stable to bearish for the near term. Dollar Yen has broken below 108 and could be bearish for the coming weeks towards 107-106. USDCNY is strongly bearish towards 6.45/42. USDINR may open with strong gap up that could take it higher towards 75.50-75.80 soon.
Dollar Index (91.05) has bounced a bit to trade above 91 just now but overall view is bearish for a fall towards 90.50-90.00 in the near to medium term.
Euro (1.2044) has immediate resistance near 1.21 which needs to break in order to pave way for further upside. Sideways ranged trade between 1.19-1.21 could be seen for now unless a break on either side of the range is seen.
EURJPY (130.09) has dipped a bit. We continue to look at 129-131 range to hold for the near term unless a successive break above 131 is seen in the near term.
Dollar-Yen (107.99) has clearly broken below 108 and looks bearish for a fall to 107-106 over the coming weeks with some interim corrective upmoves. Overall medium term view is bearish while below 108.
Aussie (0.7758) dipped from 0.78 and seems to be sustaining lower. Unless a break above 0.78 is seen, we may expect stable movement within 0.78-0.7675 region. An eventual rise above 0.78 could be on the cards in the medium term.
Pound (1.3947) is holding below 1.40 and could re-attempt to rise back targeting 1.41/42 in the medium term. Failure to hold above 1.40 could eventually bring back the exchange towards 1.38. For now we look at price action near 1.40 and expect a bounce to be seen from current levels.
USDCNY (6.4846) continues to fall sharply. A fall to 6.45/42 cannot be negated before a bounce is seen again. Trend is strongly bearish.
USDINR (74.8800) closed below 74 on Tuesday but may open with a gap up today possibly above 75.25. This could take the pair higher towards 75.50-75.80 over the coming sessions. A rise above 75.50, if seen is indicative of a strong rally ahead towards 76.
The US Treasury yields have come down sharply over the last couple of days and are hovering above their crucial supports. The yields will have to sustain above these supports and bounce from here in order to keep the uptrend intact. The price action in the coming sessions will need a close watch. The German yields hovers at the upper end of their range. The bias is bullish to see an upside breakout of their range and a fresh rise. The ECB meeting outcome is due today which will need a close watch. The 10Yr GoI is bearish and can fall further from current levels.
The US 2Yr (0.15%), 5Yr (0.78%), 10Yr (1.53%) and 30Yr (2.23%) have come down sharply from levels seen on Tuesday. 1.50% on the 10Yr and 2.20% on the 30Yr are crucial supports to watch. These supports have to hold to keep the uptrend intact and see a bounce-back. A strong break below 1.50% (10Yr) and 2.20% (30Yr) is needed to indicate a trend reversal and can drag the yields lower to 1.2% (10Yr) and 2% (30Yr). The price action in the coming days will need a close watch.
The German 2Yr (-0.71%), 5Yr (-0.61), 10Yr (-0.26%) and the 30Yr (0.28%) remain higher. The 10Yr and 30Yr have come-back into their -0.35/-0.25 and 0.2%-0.3% (30Yr) range respectively and are hovering higher. We retain our bullish view of seeing an upside break above these ranges and a rise to -0.20%/-0.15% (10Yr) and 0.35% (30Yr) in the coming weeks.
The 10Yr GoI (6.0740%) is bearish to break 6% and fall to 5.90% on the downside while below 6.10%. As mentioned earlier, resistances are at 6.16%-6.18% region and at 6.20% and they can cap the upside if a strong break above 6.10% is seen.
11:45 17:15 ECB Mtg
…Expected0.00% …Previous0.00%
14:00 19:30 US Existing Home Sales
Expn5881K …Expected6200K …Previous6220K
Data Yesterday:
—————
6:00 11:30 UK CPI Y/Y
Expn0.33% …Expected0.8% …Previous0.5% …Actual0.7%
12:30 18:00 CA Inflation Y/Y
Expn1.76% …Previous1.1% …Actual2.2%
14:00 19:30 BOC Meeting
…Expected0.25% …Previous0.25% …Actual0.25%
