Dow continues to remain mixed around 34000. A sustained rise above 34000 is needed to avoid a fall below 33500. DAX remains below 15200 and can turn bearish on a break below 15000. Nikkei and Shanghai can fall within their sideways range this week. Both Nikkei and Shanghai are closed till Wednesday. Sensex and Nifty have declined sharply on Friday and can extend the fall this week. Overall equities are not showing any strong sign of seeing a sharp rise from here. As such we would remain cautious.
Dow (33874.85, ?185.51, -0.54%) continues to oscillate up and down around 34000 over the last couple of weeks. The near-term outlook is mixed. A strong follow-through rise is needed to move up to 35000. On the downside, 33500 is an important support. A break below it and a subsequent fall below 33000 will turn the outlook bearish to see 32000-31000 on the downside.
DAX (15135.91, ?18.29, -0.12%) hovers around 15200. As mentioned on Friday, a break below 15000 from here can trigger the fall to 14500-14000 that we have been mentioning for some time. It will also negate the chances of seeing 15500-15700 on the upside.
Nikkei (28812.63, ?241.34, -0.83%) has closed below 29000 last week. It can now test 28500-28000 this week while it sustains below 29000. Broadly 28500-30500 (narrow) or 28000-31000 (broad) is the range that Nikkei is trading for some time. The Japanese markets are closed this week till Wednesday.
Shanghai (3446.86, ?28.04, -0.81%) retains its 3350-3500 range and can fall towards the lower end of this range in the coming days. The Chinese markets are also closed till Wednesday.
Nifty (14631.10, ?263.80, -1.77%) had declined sharply on Friday thereby reducing the chances of seeing 15200 on the upside. A break below 14600 today will negate that chance completely and will drag Nifty to 14400-14200 again.
Sensex (48782.36, ?983.58, -1.98%) on the other hand can fall to 48000-47000 on a break below 48500. The resistance at 50500 has held very well last week.
Commodities are almost stable. Crude prices are ranged within narrow ranges while Gold and Silver sustain above immediate support levels and could head higher in the near term. Copper may test 4.40 before bouncing back from there.
Brent (66.61) and WTI (63.48) continue to be ranged within 64-68 and 61-65 respectively and may bounce from lower end of the mentioned range soon. Overall the prices look sideways ranged for the near term.
Gold (1772.90) has risen indicating that it may remain above 1760 for now and attempt a bounce back towards 1780-1800 eventually. We may expect a broad range of 1760-1800 to hold for now. Silver (26.01) on the other hand has risen above 26 again and while that sustains, it may rise further towards 26.50-27.00 in the near to medium term. Overall broad range of 25-27 may continue to hold in Silver for some more time.
Copper (4.4705) has dipped from levels seen last week. We may expect a dip to 4.40 before a bounce back to higher levels is seen again.
Dollar Index has bounced from crucial support at 90.50 and could now be headed higher towards 92, dragging down Euro towards 1.19 or even lower in the medium term. EURJPY may remain stable for now and fall towards 131.50 before bouncing back from there. USDJPY looks bullish towards 109.72-110. Aussie looks bearish towards 0.7645 before a bounce is seen from there while Pound could be headed lower too while below 1.40. USDCNY may move up from current levels towards 6.48/50. USDINR needs to hold above support at 73.90 to head higher towards 74.20/30.
Dollar Index (91.318) bounced back sharply from crucial support at 90.50 that we had been mentioning over the last few weeks. The rise could take the index to higher levels of 92 again in the near term.
Euro (1.2020) has fallen from important trend resistance at 1.2150 ad while that holds, view is bearish for a fall towards 1.20 or lower towards 1.19. View is bearish for Euro.
EURJPY (131.65) came off slightly. A brief fall to 131.5 could be possible before the cross rises sharply towards 135 in the longer run.
Dollar-Yen (109.49) rose the whole of last week and could test 109.72-110 on the upside before again coming off from there back towards 109 or lower. Immediate view is bullish.
Aussie (0.7718) has dipped well and could test 0.7645 before again rising back from there. Immediate view is bearish.
Pound (1.3819) trades below 1.40 and while the Pound is unable to break above 1.40, we may expect sideways trade within 1.40-1.38/37 in the medium term.
USDCNY (6.4730) has been stable at lower levels and while above 6.46, it may continue to rise towards 6.50 and higher soon.
USDINR (74.0650) had closed above 74 last week. 73.90/95 is an immediate support which needs to hold to produce a sufficient rise to 74.20/30 on the upside. Watch price action today to see if the pair manages to sustain above 73.90 or falls lower. Preference is for the support at 73.90 to hold for the near term.
The US Treasury yields have been moving up from near their crucial supports. This keeps the broader uptrend intact and keeps the chances high of seeing further rise going forward. The yields will have to decline below their support to indicate a trend reversal. The German Yields are hovering at their crucial resistance and can fall-back. The price action in the coming days will need a close watch. The 10Yr GoI remains stable within its overall downtrend. The outlook is bearish and the 10Yr GoI has room to fall further from current levels.
The US 2Yr (0.16%) and 5Yr (0.85%), 10Yr (1.63%) and 30Yr (2.30%) remains stable. The 10Yr and 30Yr have risen back from near their crucial support levels of 1.50% and 2.20%. This keeps the overall uptrend intact. The chances of a strong rise to 1.8% and 2.5% again cannot be ruled out in the coming weeks. The yields have to break below 1.5% (10Yr) and 2.2% (30Yr) in order to indicate a trend reversal and become bearish.
The German 2Yr (-0.70%), 5Yr (-0.58), 10Yr (-0.20%) and the 30Yr (0.35%) yields hover at their crucial resistance levels of -0.20% (10Yr) and 0.35% (30Yr). A pull-back from here can drag the yields lower to -0.45% (10Yr) and 0.20% (30Yr). The price action in the coming days will need a close watch if the yields manage to rise past these hurdles and move up further to negate the above mentioned fall.
The 10Yr GoI (6.0565%) continues to trade stable. While below 6.08%, the yield can test 6% on the downside in the near-term. A corrective bounce from 6% to 6.10%-6.12% cannot be ruled out before the broader downtrend extends towards 5.9%.
22:30 4:00 AU PMI
…kshitij Expn 64.66 …Expected 59.6 …Previous 59.9
5:00 10:30 IN Manufacturing PMI
…kshitij Expn 31.22 …Previous 55.4
7:30 13:00 CH PMI
…kshitij Expn 57.63 …Expected 66.4 …Previous 66.3
8:00 13:30 EU PMI
…Expected 63.3 …Previous 62.5
14:00 19:30 US Manufacturing ISM
…kshitij Expn 60.38 …Expected 65 …Previous 64.7
14:00 19:30 CA PMI
…kshitij Expn 50.76 …Previous 58.5
DATA on Friday:-
—————
23:30 5:00 JP Unemp
Expn 3.16% …Expected 2.9% …Previous 2.9% …Actual 2.6%
1:30 7:00 AU PPI
…Expected 0.3% …Previous 0.5% …Actual 0.4%
9:00 14:30 EU GDP
…Expected -0.8% …Previous -0.7% …Actual -0.6%
9:00 14:30 EU Unemp
Expn 8.00% …Expected 8.3% …Previous 8.3% …Actual 8.1%
12:30 18:00 US Personal Income
Expn -2.05% …Expected 20.1% …Previous -7.1% …Actual 21.1%
12:30 18:00 US PCE Price Index M/M
Expn -0.24% …Expected 0.3% …Previous 0.1% …Actual 0.4%
12:30 18:00 CA GDP
…Previous 0.7% …Actual 0.4%
