Indian equities retains their momentum and looks much stronger than their global peers. Among the global indices, DAX is relatively stronger than others while the DOW, Nikkei and Shanghai may consolidate before moving higher.
Dow (25887.38, -26.72, -0.10%) failed to get strong follow-through buying above 26,000 yesterday. However, the 21-day moving average (25823) is holding well and is keeping the chances alive of Dow moving up to test 26100 and 26200 levels. The outlook will turn negative for a sharp fall to 25200-25100 only if Dow declines decisively below 25770.
DAX (11788.41, +131.35, +1.13%) has risen towards 11780 as expected. The bullish outlook remain intact for the index to test our next target of 11870-11900.
Nikkei (21583.63, +16.78, +0.078%) is facing resistance around 21600. Immediate support is at 21450 (21-day moving average) while above which Nikkei can breach 21600 and rally to 21900 and 22000. But a break below 21450 can drag it to 21260.
Shanghai (3064.12, -26.85, -0.87%) seems to be struggling to breach 3100. If it continues to trade below 3100, a fall to 3000 or 2975 cannot be ruled out in the coming sessions. As mentioned yesterday, a decisive close above 3100 is needed for the index to target 3150 and 3180 thereafter.
Sensex (38363.47, +268.40 +0.70%) and Nifty (11532.40, +70.20, +0.61%) has negated the possibility of a corrective fall mentioned yesterday. The indices remain strong and retains their momentum. As mentioned a few days ago, Sensex and Nifty 50 are likely to revisit their previous highs if 38989 and 11760 respectively in the coming weeks.
Gold and Silver remains range-bound and has come-off after testing the upper end of their respective range. Copper is range-bound with a bullish bias and could be gearing up for a fresh rally. On the oil space, while Brent remains mixed in the near term, WTI looks relatively much stronger on the charts than Brent.
Gold (1305) tested 1310 and has come-off slightly. The 1290-1310 sideways range remains intact. A breakout on either side of 1290 or 1310 will decide the next move.
Silver (15.35) has reversed lower from around 15.45. It is likely to remain range bound between 15.10 and 15.50. Within this range, the possibility is high of it declining to 15.10 in the near term.
Copper (2.92) is inching higher within its 2.89-2.95 sideways range. The bias is positive for copper to breach the range above 2.95 and rise to 2.98 and 3.0 in the short term.
WTI (59.1) tested 59.5 as expected but did not breach it. The broader outlook remains bullish for WTI to break 59.5 and rise to 60.7 and 61. However, an intermediate dip to 58 before further upmove cannot be ruled out.
Brent (67.55) tested 68 but has come-off slightly from there. A dip to 66.5 cannot be ruled out if it remains below 68. A strong break and a decisive close above 68 will pave way for 70 in the coming days.
Views on major currency pairs remain intact as most of them are stable near levels seen yesterday.
Dollar-Index (96.47) has bounced a bit, trading above 96.25 currently. While the support holds, the index could head higher towards our earlier mentioned target of 97.00 on the upside or even higher.
Euro (1.1347) tested 1.1360 before a short dip. Note that 1.14 is an important near term resistance and could hold, pushing Euro towards 1.13-1.1250 again.
Euro-Yen (126.68) is trading higher, heading towards 126.80. It would be important to see if 126.80 helps to push Euro-Yen towards 125.20 again. Else a rise above 126.80 could indicate fresh medium term bullishness which could turn bullish for Euro too, contrary to our current view of a gradual fall. Watch price action near 126.80.
Dollar Yen (111.61) is stuck above 111 for the last few sessions unable to decide which direction to take. At the same time, it has not been able to bounce to test 112.5 as expected. If the pair does not rise from here, it could move down towards 110-109 eventually. For now, it is likely to trade within 111-112 for 1-2 more sessions.
Aussie (0.7071) is trading lower. While below 0.7120, Aussie may come off towards 0.70-0.6950 in the near term. Immediate resistance is seen near 0.7150.
Pound (1.3257) is likely to see sideways movement within 1.32-1.34 region for a few sessions. But while important resistance at 1.34 holds, preference is for an eventual fall towards 1.31
USDCNY (6.7119) looks bearish on the weekly candles while there is also a decent support near 6.70 on the nearer term charts. There is equal possibility of moving on either direction from here. We would wait to see a sharp movement in the near term. For now, the pair may remain stable near current levels.
Dollar-Rupee (68.9675) moved up sharply yesterday. While there is scope for a rise towards 69.10 on the upside, a dip towards 68.60 is also a fair possibility. We would wait to see which direction the pair takes. Preference is for a test of 69.10 on the upside.
The US yields have moved up.The 2YR (2.47%), 5Yr (2.43%), 10Yr (2.61%) and the 30YR (3.02%) are trading higher. A further rise towards 2.67% (10Yr), 3.10% (30Yr) and 2.5% (5Yr) looks likely for the near term. US yields are bullish.
The 10YR GOI (7.5357%) moved up yesterday from levels near 7.48%. A rise to 7.55% could be possible while above 7.45%. Trade within 7.45-7.55% is possible in the near term
UK 20YR (1.61%) is trading just above support levels and could soon see a rise towards 1.70% . This could also pull up the 5YR (0.87%) and 10Yr (1.19%) which could have some scope of falling towards 0.84% and 1.17% in the near term.
9:30 15:00 UK CPI Y/Y
...Kshitij Expn 1.53 % ...Expected 1.80 % ...Previous 1.82 %
18:00 23:30 US FOMC Meeting
...Expected <2.50 % ...Previous <2.50 %
...Kshitij Expn 4.0 % ...Expected 4.0 % ...Previous 4.0 % ...Actual 3.9 %