Shares look mixed. While the Dow maintains over 23000, it has to break 24000 to move even higher. Broadly, we prefer it to remain in the 23000-24500 (narrow) or 22500-25000 (wider) range for a few weeks. DAX has strong resistances going forward, while beneath it looks vulnerable to breaking its 10200-11000 / 11200 downside. Nikkei holds above its central support and can move up while maintaining higher. However, Shanghai has jumped today but can still see a corrective dip before resuming its overall rise. Sensex and Nifty will have to maintain above their crucial support levels of 31000 and 9000 respectively to prevent a fresh fall.
The Dow (23685.42, +60.08, + 0.25%) manages to maintain higher than 23000. As mentioned on Friday, it remains to be seen whether it can break 24000 now or not to move further higher towards 24500. Virtually as mentioned in the last week, we will be looking for a sideways movement in the range of 23000-24500 (narrow) or 22500-25000 (wider) for some time.
DAX (10465.17 +128.15, + 1.24%) holds over 10400 but may have a resistance in the 10700-10800 region. A strong break above 10800 is needed to take it higher toward 11000-11200. While below 11800, bias is negative to see a break below 10200. Such a break can pull the DAX lower to 10000 initially and even 9600-9500 eventually.
Nikkei (20166.92, +129.45, + 0.65%) has jumped back over 20000, thus relieving the danger of seeing a fall to 19500-19000, as we had mentioned on Friday. . While over 20000, an increase to 20500 and even 20800 (in a break over 20500) is possible this week. A strong closure during 19900 is needed to bring the danger back to see 19500-19000 on the down side.
Shanghai (2880.86, + 12.40, + 0.43%) has jumped back over 2875 again and needs to see if it can sustain it. Although we are below 2900, however, we still prefer to see a correction fall to 2850-2825 and then a fresh leg of upward direction to resume the overall uptrend and target 2950 upward. In the medium term, we will keep the target at 3050.
Nifty (9136.85, -5.90, -0.06%) fell further Friday in line with our expectations. The crucial support level of 9000 holds up well now. While holding above 9000, we hold our view to see a rise back to 9300-9400 immediately and see a sideways interval of 9000-9500 / 9600. Our view will go wrong during a strong break below 9000 (less preferred) , which then paves the way for a fall to 8800 and 8500. We closely monitor the price action around 9000.
Similarly, the Sensex (31097.73, -25.16, -0.08%) will have to maintain over 31000 to move up to 32000-33000 again. Although we prefer that it maintains over 31000, a break during this key support will prove our point of view wrong and pull the Sensex lower to 30000-29000 in the coming days.
In general, all commodities trade higher today, signaling short-term stability. Signs of additional demand growth and, along with a deepening of production cuts from non-OPEC + countries, appear to be helping well to fuel the rise in crude prices. Data release on Friday showed that the number of Chinese for daily use of commodities increased in April as refineries started their operations. Watch for immediate and temporary resistance to crude prices, which if paused head-on can trigger a sharp rise in the coming weeks. Gold and silver are clearly in a trend and are potentially bullish. Copper trades below 2.40 and can remain in a lateral range below the crucial 2.40 resistance in the short term.
Brent (33.75) and Nymex WTI (30.73) have both risen sharply in line with our expectations. If the WTI maintains a rise above $ 30 and Brent manages to rise past $ 35, we can expect the recovery to continue and expect a further rise in the coming weeks.
Gold (1772.50) appears to have broken in the head after a triangular pattern on the daily candles, signaling further short-term habilitation toward 1800 initially and perhaps higher toward 1840 in the medium to longer term.
Silver (17.67) rose above our aforementioned 16.50 on Friday and rose sharply, breaking out from the narrow sideways consolidation. A rise to 19 could be on the cards for the near term. The outlook is bullish.
Copper (2.3615) trades with the green, but finds difficulty moving above 2.40 and maintaining higher. While below 2.40, trading within 2.40-2.25 seems more likely.
Dollar index and euro are trading stable, while USDJPY is just above important support for 107. EURJPY also looks stable in the short term. The Aussie may fall while pounds have support below current levels. The yuan looks weak, which can also affect Rupee’s weakness in the very short term.
Dollar index (100.30) has been in a lateral range and could trade in the region of 98.70-100.82 in the short term. A break on both sides would be necessary to decide further direction in the longer term.
Euro (1.0822) is stable near levels seen on Friday. We may continue to look at key support in the 1.0750 or 1.07 region, which could hold the currency higher and lead to a possible increase towards 1.09 and higher in the medium term. Near-term view is bullish.
Dollar-Yen (107.11) traded slightly lower. But while support above 107 is over, the couple may have room to rise toward 108-109 or even higher. See support at 107th
EURJPY (115.94) is also stable, and as mentioned on Friday, we might expect a test of 114, while below 117. Then a sharp rejection could be possible.
The Aussie (0.6445) continues to trade below immediate resistance near 0.65, and while currency trading is lower, we can expect a short-term decline. While copper trades below 2.40, the Aussie may not get a boost from the commodity price. The expected range in the short term is likely to be 0.65-0.6350.
Pound (1,2105) has fallen as expected, but could face temporary support from 1,2050-1,2100 right now to see a correction increase in the near term. In the medium to long term, the direction is still downward and potentially bearish.
USDCNY (7.1023) has moved up and looks bullish for the near term towards 7.12.
USDINR (75.58) has immediate resistance at 75.60, which seems to break its head to test 75.80 before falling from there. See the price close to 75.60 and higher near 75.80 before seeing a fall there against 75.30 / 25.
The US Treasury has been slightly higher on Friday compared to the levels seen on Thursday. However, the broader picture remains negative and we expect dividends to fall further in the coming days in line with our expectations. German interest rates continue to trade lower, keeping our bearish viewpoint intact to test their key in the short term. 10Yr GoI can find support in the 6.05% -6% region now and is likely to move higher this week.
US 2Yr (0.14%) and 5Yr (0.31%), 10Yr (0.64%) and 30Yr (1.33%) were slightly higher on Friday last week compared to the levels seen on Thursday. However, we maintain our short-term bearish view. 10Yr can dip to 0.60% -0.58% – a key support zone. As we mentioned last week, a break below 0.58% can pull 10Yr lower to 0.40% eventually. 30Yr can dip to 1.23% -1.20% in the short term. A break below 1.20% will decrease to 1.10%.
The German 2Yr (-0.76%), 5Yr (-0.74%), 10Yr (-0.54%) and 30Yr (-0.10%) yields continue to trade lower and stable. We maintain our bearish view. We expect 10Yr to test -0.60% and 30Yr to dip to -0.20% from current levels. As mentioned on Friday, it will decide whether yields will fall below -0.60% (10Yr) and -0.20% (30Yr) or not, the next move. Our preference is to see a break below -0.60% on 10Yr and -0.20% on 30Yr eventually.
10Yr GoI (6.0812%) is likely to find support in the 6.05% -6.0% region this week. We expect dividends to maintain above 6% and move up to 6.20% in the coming days.