Dow continues to oscillate around 34000 and needs to sustain above 33500 to keep alive the chances of seeing 35000 on the upside. DAX has bounced-back but has limited upside from here upto 14500-14700 from where it can see a sharp corrective fall. Nikkei can move up within its 28000-31000 range. Shanghai is hovering at the upper end of its 3350-3500 range and is likely to reverse lower and keep the range intact. Sensex and Nifty can consolidate in a range of 47000-49000 and 14150-14600/700 in the near-term before witnessing a deeper fall.
Dow (33815.90, ?321.41, -0.94%) seems to be lacking to get a strong follow-through rise above 34000 giving some sign of weakness. It has to sustain above 33500 to keep alive the chances of seeing 35000. A break below 33500 will negate that chance and can drag the Dow to 33000 initially and then to 32000-31000 eventually.
DAX (15320.52, +124.55, +0.82%) has risen back above 15200 but has to rise past 15500 to see an extended rise to 15700. As we have been mentioning, 15500 and 15700 are important resistances that can cap the upside and take DAX lower to 14500-14000 in the coming weeks.
Nikkei (28975.01, ?213.16, -0.73%) has come-off below 29000. The broader 28000-30500/31000 range is intact. Within this range, while above 28500, Nikkei can move up towards 30000-30500 in the coming days.
Shanghai (3481, +15.89, +0.46%) continues to hover below 3500. We expect 3500 to hold and Shanghai to fall towards 3400 to keep the 3350-3500 range intact. As mentioned yesterday, a strong break above 3500 is needed to negate the fall and turn the view bullish for a rise to 3600.
Nifty (14406.15, +109.75, +0.77%) and Sensex (48080.67, +374.87, +0.79%) have risen back sharply yesterday from their lows of 14151.4 and 47204.5 respectively. They might remain in a sideways range of 14150-14600/700 (Nifty) and 47000-49000 for some time. However, the broader picture remains weak to test 14000-13800 (Nifty) and 46000 (Sensex) going forward.
Short corrective movement seen in crude, Gold and Silver that could be temporary and hold for the next few sessions before again resuming the broader trend. Silver and Gold are bullish in the medium term towards 27.50 and 1820 while Crude could be restricted to $ 70 on the upside. Copper on the other hand can steadily rise towards 4.40.
Brent (65.61) has risen slightly. While above immediate support at 64, the price has bounced and could be headed towards $ 67-70 again in the medium term. WTI (61.73) on the other hand has also held above 60 and could rise towards $ 65 from here itself. Our expectation of a fall to 57 is not seen just now and can be negated while the price remains above $ 60.
Gold (1788.00) dipped slightly and could not break above 1800 yesterday. But while above 1760/80, we would continue to remain bullish for a rise to 1800-1820 in the near to medium term from where a small rejection could be possible before resuming the longer term rally.
Silver (26.23) has dipped slightly. If 27-27.50 holds just now we may expect a range of 25-27.50 to hold for the near term before any break out is seen that may take prices to further upside.
Copper (4.2920) continues to rise towards immediate resistance near 4.40 while 4.10 holds as a strong support. A break above 4.40 would indicate that the rise seen over the last 2—weeks is the start of a fresh rally that may extend higher, eventually taking Copper to 4.60 on the upside. Immediate view is bullish.
Dollar Index remains stable while Euro may trade within 1.1980-1.21 region for sometime. Dollar Yen is bearish while below 108 and can steadily head towards 107-106. Pound and Aussie are bearish just now and need to bounce from supports near 1.38 and 0.7675 in order to move up again towards 1.40 and 0.78 in the medium term. USDCNY may rise towards 6.50/52 again while USDINR may continue to trade within 74.80-75.35 till a clear break out is seen on either side.
Dollar Index (91.217) could trade within 91.0-91.50 for the near term before breaking lower to eventually test 90.50-90.00 in the medium term. Broader view is bearish within which some interim corrections look possible.
Euro (1.2020) has dipped a bit. While below 1.21, small ranged trade within 1.1980-1.2100 could be possible. Thereafter a sharp rise above 1.21 looks more likely.
EURJPY (129.78) has not been able to break above 131 and while that holds as decent resistance, we may expect a fall to 129 or even 128 in the near to medium term. While above 128, we may keep possibilities of a rise back to 131 intact. A break below 128, if seen would make the cross bearish towards 125 in the longer run (say 1-2 months). Watch price action near 129-128 as the cross falls.
Dollar-Yen (107.95) is almost stable. While below 108, view is bearish towards 107-106 in the coming weeks.
Aussie (0.7719) has fallen further and could test 0.7675 on the downside before again bouncing back towards 0.78. Overall sideways range within 0.7675-0.78 could hold for the medium term.
Pound (1.3858) has dipped well. While above 1.38, Pound may rise back towards 1.40 in the medium term. Failure to sustain above 1.38 could indicate signs of reversal and force us to look for fresh lower targets.
USDCNY (6.4980) has bounced a bit today and while the rise holds and sustains, we may expect a steady rise towards 6.50/52 soon.
USDINR (74.9575) opened higher yesterday as expected but came off during the session. The pair has been trading within important resistance and support of 75.35 and 74.80 respectively and needs to break on either side to give some directional clarity for the medium term. Till then we may expect the 74.80-75.35 region to hold.
The US Treasury yields continue to hover near their crucial supports which need to hold in order to keep the current uptrend intact and take them higher again. The price action in the coming days will need a close watch. The German yields remain stable and keep intact our bullish view of seeing a further rise from here. The European Central Bank (ECB) yesterday left the rates and the stimulus unchanged. However, the central bank will increase the pace of bond purchase under the Pandemic Emergency Purchase Programme (PEPP) compared to the previous months. The 10Yr GoI is coming down in line with our expectation and remains bearish to fall further.
The US 2Yr (0.15%), 5Yr (0.80%), 10Yr (1.55%) and 30Yr (2.24%) remain lower and continue to hover near their crucial supports. We reiterate that 1.50% (10Yr) and 2.20% (30Yr) are crucial supports that will need a close watch. While these supports hold, the uptrend will remain intact and the yields can move up again towards 1.7%-1.8% (10Yr) and 2.4%-2.5% (30Yr). As mentioned yesterday, 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 German 2Yr (-0.70%), 5Yr (-0.60), 10Yr (-0.25%) and the 30Yr (0.28%) remain stable. Our view remains bullish to see a break above -0.25% (10Yr) and 0.30% (30Yr) and see a rise to -0.20%/-0.15% (10Yr) and 0.35% (30Yr) in the coming weeks.
The 10Yr GoI (6.0502%) is coming down in line with our expectation. Our bearish view remains intact. The 10Yr GoI can break 6% and fall to 5.90% in the coming weeks. Resistance is now at 6.10%.
3:05 4:35 UK Cons Conf
Expn-15 …Expected-12 …Previous-16
23:30 5:00 JP CPI
14:00 19:30 US New Home Sales
Expn817K …Expected875K …Previou775K
11:45 17:15 ECB Mtg
…Expected0.00% …Previous0.00% …Actual0.00%
14:00 19:30 US Existing Home Sales
Expn5881K …Expected6200K …Previous6220K …Actual6240k