STOCKS

The actions are mixed. While Dow recovered from the fall of the day before with an increase observed in Shanghai, Nifty and Sensex. Dax and Nikkei fell sharply but may soon recover to recover as supports hold.

The Dow (34,639.79, +617.75, + 1.82%) rebounded strongly from 34,000, almost recouping losses from the previous session. The view is bullish to see a rise towards 35000/35500 while it is above 34500/600.

The DAX (15263.11, -209.56, -1.35%) has fallen. The view is still bullish to see a rise towards 15900 as the index holds above 15100.

Nikkei (27,692.34, -61.03, -0.22%) fell slightly today. A drop to around 27,000 is possible before you see a rebound from there.

Shanghai (3583.36, +9.53, + 0.27%) has broken intermediate resistances at 3575 and is now slowly heading towards 3600. A strong break above 3600 is needed to see 3650/3700 ​​at middle term. Otherwise a pullback towards 3500 is possible from 3600.

Nifty (17401.65, +234.75, + 1.37%) rose sharply yesterday and closed above 17400. A rise towards 17600/800 can be seen above 17400 which may offset the bearish view of a fall to 17000 and 16800 on the downside. Look at the price action near 17,400.

Sensex (58461.29, +776.50, + 1.35%) broke resistance at 58000 and closed at 58461.29. The view is bullish to see a rise towards 59000/59500 in the next few sessions.

BASIC PRODUCTS

Brent and WTI fell sharply around 65 and 61 after OPEC + decided to increase production by 400,000 barrels per day on January 22. However, crude prices have recovered from the drop seen yesterday and although above the immediate supports at 64/65 (brent) and (WTI), prices may rise in the very short term. Gold is falling on a stronger US dollar. If it goes below 1770, it can drop to 1760/40. Silver is between 22 and 24. Copper is bullish towards 6.45 / 50/60 while it is above 4.20 / 25.

Brent (70.39) holds above 64/65 and WTI (67.28) holds above 61. There may be a short near-term rally before a drop occurs longer term towards the support levels mentioned.

Gold (1773.20) tests the lower end of the 1770-1820 range and must rebound to continue rising. But while the Dollar Index is trading at a high level, gold may drop below 1770 towards 1760/40 on the downside. Watch the price action near 1770 today.

The silver (22.35) is expected to stay in the 22-24 region for now.

Copper (4.2830) edged up from lower levels seen yesterday. The price must rebound from 4.20 / 25 to hold higher and move towards 4.45 / 50/60 ultimately higher.

FOREX

The Dollar Index has rebounded again to levels above 6 and if it holds above support near 95.50, a rise to 97-98 is possible. The euro falls towards 1.12. The Aussie is strongly bearish towards 0.70-0.6950 while the Pound is also expected to fall towards 1.32-1.3190. The EURJPY has moved below 128 and if it holds it may drop to 125 on the downside in the medium term. The Dollar-Yen could trade between 112-114 as the USDCNY is bearish below 6.43 / 40. The USDINR is expected to be between 74.60 / 80 and 75.20 / 25 for now.

The Dollar Index (96.1750) holds above 95.50 in recent sessions and has the potential to move up to 97 or higher with slight corrective lows in between. Overall, a rise towards 97.50-98 is still expected before a reversal is observed.

The Euro (1.1295) holds below 1.14-1.1380 and has fallen for the past 3 sessions. We can expect a further drop towards 1.1250-1.12 in the next sessions.

EURJPY (127.76) broke again below 127. As we warned earlier, continued attempts to break below 128 could eventually give way to a trigger to fall towards 125 on the downside. . An immediate pullback from current levels is needed for the EURJPY to rise again. A rise above 128.50, if observed and sustained, may again take the cross towards 129-130. Otherwise, the downtrend seems more important right now.

The Aussie (0.7068) continues to decline and is expected to fall further towards 0.70-0.6950. The view is strongly bearish.

The pound (1.3287) has broken below 1.33 and if it manages to break 1.3267 / 60 it may fall further towards 1.32-1.3190. The view is bearish while below 1.33.

The dollar-yen (113.11) tested 112.65 yesterday but rose again from there. A possible side range of 112.50-114 (revised from 113-114) may hold for future sessions.

The USDCNY (6.3743) tested 6.3770 after rebounding from 6.3596 in the past 2 days. Although below 6.40 / 43 the view remains bearish and if the pair manages to keep trade below 6.37 this will soon confirm a possible dip to 6.36 / 35.

{USDINR (75.00) traded between 74.88 and 75.07 yesterday. We continue to expect a narrow range of 75.15-74.80 and a wide range of 75.20 / 25-74.60 to hold for now before a breakout on either side of the range is observed.

INTEREST RATE

US Treasury yields at the end (10 year and 30 year) continue to remain lower and stable above their critical supports. Price action over the next few days will require close monitoring to see if they can rebound and keep the wider side range intact. The US employment data today will need to be watched closely to see what it has on the plate for returns. German yields remain lower and keep our bearish view intact of seeing further decline from here. The 10-year and 5-year GoIs remain stable within their expected narrow lateral range. A rally to test the upper end of their range is possible in the short term.

The American 2-year (0.60%) and the 5-year (1.19%) increased slightly while the 10-year (1.43%) and the 30-year (1.75%) remained down and stable. We reiterate that 1.4% -1.35% on the 10-year and 1.75% -1.70% (instead of 1.75% mentioned yesterday) on the 30-year are crucial supports. A rebound from here will keep the wider range of 1.35% -1.75% (10 years) and 1.75% -2.1% / 2.2% (30 years) intact. However, a break below these supports will be very bearish. It’s an expectation at the moment.

The German 2-year (-0.76%), 5-year (-0.64%), 10-year (-0.37%) and 30-year (-0.07%) indices plunged through the tenors and keep our bearish outlook intact. We expect a decline to -0.45% / -0.5% over the 10-year and -0.1% / -0.2% over the 30-year.

The 10-year Indian (6.3520%) and the 5-year (5.6810%) remained stable yesterday. The 6.3% -6.38% range over the 10 years and the 5.62% – 5.7% range over the 5 years is intact. A rise to the upper end of these forks is possible in the short term before a reversal occurs.


Source link