Kshitij Consultancy Services
Morning Briefing Daily forecasts on global Stocks, Commodity, Forex and Interest Rates markets
24 Jun 22. 0859 IST or 0329 GMT or 2329 EST

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GOOD MORNING!
STOCKS

Dow has moved up and can test 31200. But the index needs to break above 31200 and sustain to bring back bullishness into he picture else can be vulnerable to a sharp fall towards 30000 or lower. Dax has broken below the key level of 13000 and has opened chances of a fall to 12000 or lower. Nikkei has risen today but remains bearish while below 26500 while Shanghai has risen well and is bullish above 3250-3300 to head towards 3400. Nifty is stuck within 15200-15800 and needs a break on the upside to become further bullish. Till then the range can hold and keep alive chances of a fall to 15000 or lower.

Dow (30677.36, +0.64%) has moved up and can test the key 31200 level. We reiterate that the Dow has to breach 31200 decisively to move further up towards 31800-32000 and also to negate the danger of falling below 30000.

DAX (12912.59, -1.76%) has broken below the crucial level of 13000. This has opened the doors for a deeper fall to 12000 and even 11000 going forward.

Nikkei (26384.02, +215.19, +0.82%) has bounced slightly today but continues to trade below 26500 which can keep alive chances of a fall again in the next few sessions. View remains bearish while below 26500.

Shanghai (3343.60, 23.45, +0.71%) has risen well today above 3300. A rise to 3350-3400 is possible in the near term. View is bullish above 3250-3300.

Nifty (15556.65, +0.93%) is oscillating between 15350 and 15700 over the last few days. 15700-15800 will be an important resistance while below which we retain our bearish view of seeing a fall to 15000-14750 eventually going forward.

COMMODITIES

Crude prices trades lower and look bearish to fall further in the near term. Gold continues to be range-bound within 1820-1860. Silver can fall towards 20.5/20 if it fails to sustain above 21. Copper has rebounded after falling to a fresh yearly low of 3.7230 yesterday. Overall view remains bearish.

Brent ($109.49) has fallen further but is trading above the support at 105/107.5. While that holds, there is some scope for a rise to 117.5. A break below it will be further bearish to see 100 on the downside.

WTI ($103.93) has declined further. Outlook is bearish to see a fall to 100/95 or even lower 92.5 in the coming weeks.

Gold ($1826.90) continued to trade within 1820-1860. A break on either side of the range will indicate whether it will move towards 1880 or fall back to 1800.

Silver (21.02) broke below the lower end of 21-22.50 range to test 20.7 before bouncing back from there. Failure to sustain the bounce can drag it further to test 20.5/20 on the downside.

Copper (3.77) plunged to 3.7230 yesterday before rebounding from there. The bounce needs to sustain and extend further; else it can be bearish to 3.5 on the downside.

FOREX

Dollar Index can test 103.50 before rising back to 105 while Euro can be stuck within 1.05-1.06 region for now. EURJPY has broken below 142 and can head towards 140-138 before again bouncing back sharply. Aussie and Pound can trade within 0.68-0.72 and 1.22-1.2350 region for the near term. Dollar Yen has been falling over the last few sessions and need to sustain above 133 to slowly move up again. USDCNY has dipped again today but remains within the 6.64-6.76 region which can continue to hold for now. USDINR can trade within 78.10/15-78.40 for now; any break above 78.40 will be bullish towards 78.60.

Dollar Index (104.338) is trading within 103.50-105 region and could hold for a few more sessions before breaking on either side. We would wait and watch for now.

Euro (1.0528) has been fluctuating within the narrow range of 1.05-1.06 over the last few sessions and need to break on either side to move either towards 1.07 or towards 1.04. For now watch narrow trade within 1.05-1.06

EURJPY (141.94) fell sharply breaking below our mentioned 142. On the charts there is room for a fall to 140-138 (downside revised from 137 mentioned yesterday) but we may expect a bounce from anywhere below 141 in the coming week. Watch for limited downside next week.

Aussie (0.6904) is holding above immediate support at 0.6850 and a rise to 0.6950-0.70 could be on the cards for the near term. View is bullish above 0.6850.

Pound (1.2268) is stuck within 1.2350-1.22 region. A broad range of 1.24/25-1.21/20 may hold for the next couple of weeks.

Dollar-Yen (134.80) has fallen and can test 134/133 before a bounce back to higher levels is seen again. 133-138 can be a near term range.

USDCNY (6.6971) has dipped again today after a short rise seen over the last 2-sessions. A broad range of 6.64-6.76 is likely to hold for the medium term.

USDINR (78.3050) rose sharply keeping its upside momentum strong for now and a break above 78.40 will pave way for a further rise to 78.50/60 on the upside. Failure to break above 78.4 today will keep intact a range of 78.10-78.40 for the very near term.

INTEREST RATES

The US Treasury yields have come down further and are keeping intact our view of testing their crucial supports in the coming days. We expect the supports to hold and trigger a reversal to resume the overall uptrend. The German yields have declined further sharply and are turning bearish. There is room for further fall from here. The 10Yr and 5Yr has seen a bounce but key resistances are ahead which will have to be breached to ease the downside pressure. Else they are vulnerable to fall deeper from here.

The US 2Yr (3.03%) Treasury yield remains stable while the 5Yr (3.16%), 10Yr (3.09%) and 30Yr (3.23%) have come down further. The view remains the same. The 10Yr can fall to 3%-2.9% and the 30Yr to 3.1%-3%. Thereafter we can expect a reversal.

The German 2Yr (0.78%), 5Yr (1.15%), 10Yr (1.42%) and 30Yr (1.67%) yields continue to fall sharply. The 10Yr has declined below 1.5% and can now fall to 1.2% and even 1% while this break sustains. The 30Yr is coming down to test 1.6%-1.5% as mentioned yesterday.

The 10Yr GoI (7.4191%) has risen back well from the day’s low. But the broader picture remains weak and the 10Yr can remain vulnerable to test 7.3%-7.2% on the downside. Upside can be capped at 7.45%-7.5% from here.

The 5Yr GoI (7.0895%) has inched up but needs to breach 7.1% to ease the downside pressure and move further up towards 7.2%-7.25%. Else the fall to 7%-6.9% that we have been expecting cannot be avoided.

DATA TODAY

23:05 4:35 UK Cons Conf
...Kshtij Expn -40 ...Expected -40 ...Previous -40 ...Actual -41

23:30 5:00 JP CPI
...Kshtij Expn 2.71 ...Expected 2.9 ...Previous 2.4 ...Actual 2.1

9:00 14:30 GER IFO Business Climate
...Kshtij Expn 91.7 ...Expected 92.9 ...Previous 93.0

9:00 14:30 GER IFO Business Situations
...Kshtij Expn 101.4 ...Expected 99.0 ...Previous 99.5

9:00 14:30 GER IFO Business Expectations
...Kshtij Expn 87.9 ...Expected 87.4 ...Previous 86.9

14:00 19:30 US New Home Sales
...Kshtij Expn 565K ...Expected 590K ...Previous 591K

YESTERDAY DATA:-
--------------
12:30 18:00 US Current Account Balance
...Kshtij Expn -222.7$ ...Expected -275.0$ ...Previous -217.9$ ...Actual -291.4$

DISCLAIMER
These views/ forecasts/ suggestions, though proferred with the best of intentions, are based on our reading of the market at the time of writing. They are subject to change without notice.Though the information sources are believed to be reliable, the information is not guaranteed for accuracy. Those acting in the market on the basis of these are themselves responsible for any profits or losses that might occur, without recourse to us. World financial markets, and especially the Foreign Exchange markets, are inherently risky and it is assumed that those who trade these markets are fully aware of the risk of real loss involved.

WARNING !!
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