STOCKS
Dow (24700.21, -1.15%) has broken below the daily trendline support near 24750 and has opened up scope of falling further towards 24000-23600 levels in the coming sessions. Unless we see an immediate bounce back above 24750, view for the medium term remains bearish.
Dax (12677.97, -1.22%) tested 12600 on the downside as expected. If 12700 acts as an earlier support turned resistance, the Dax could fall further towards 12400. Else we could see a bounce from current levels back towards 12800-12900 levels.
Nikkei (22287.42, +0.040%) has fallen as expected and looks further bearish towards 21800.
Shanghai (2881.21, -0.92%) is down sharply on tensions over US-China Trade relations and the index could test levels near 2800-2750 which could provide some near term support.
Nifty (10710.45, -0.83%) is likely to get some support from 10700-10650 levels. Near term looks bearish just now but the downside could be capped at 10650.
COMMODITIES
Brent (75.30) and WTI (65.09) are stable just now. WTI could be stable in the 67-64 region for now while Brent is likely to trade below resistance at 76. The next couple of sessions could see some range-trade.
Gold (1276.30) has immediate support on the 3-day charts. If this holds, we may see a bounce towards 1300 else indication of medium term bearishness may be triggered on a fall below 1270 opening up chances of testing 1250-1240 levels soon.
Copper (3.0455) has also come off as expected losing all the gains seen last week. 3.02-3.00 could be an immediate support where a pause is likely just now. Keep an eye on the falling Shanghai and Aussie as that could keep Copper weak for the coming sessions.
FOREX
Euro (1.1584): Against our expectation, Euro fell yesterday and for the first time, dipped below crucial support on weekly candles near 1.156 to see a low near 1.153. Euro could now break decisively below this support in this week. In that case, its next downside target would be 1.145 (89 weeks MA).
Dollar Index (95.02): Dollar strengthened against most global currencies yesterday (except the Yen) and the Dollar Index saw an 11 month high near 95.30. It could now move further up towards resistance near 95.5-95.6 on the 3 day line chart and even breach that to target 96 in this week.
Dollar Yen (110.14): Dollar Yen saw a low near 109.55 yesterday but has again moved up from there. As mentioned yesterday, it could continue to see oscillation between 111.0-109.5 in this week and then break below support on daily candles (near 109.5-110.0) ultimately, which could make it bearish towards 107 in the medium term.
Euro Yen (127.58): With chances of bearishness in both Euro and Dollar Yen, Euro Yen is likely to break horizontal support on weekly line chart near 127.0 in this week / by next week. Its target in the next 2-3 weeks could well be support on weekly candles near 124.
Pound (1.3166): As per expectation, Pound moved lower towards 1.31 yesterday, seeing a low near 1.3151. A test of support on 3 day candles near 1.31 in this week and then a further downmove towards 1.30 in the next 1-2 weeks seems likely.
Dollar Rupee (68.385): Crucial resistance level near 68.50 could be tested in the coming sessions. A break beyond that could translate into an upmove towards upside target of 69.
INTEREST RATES
US-China trade war prospects are rising after Trump signalled that tariffs might be imposed on $200 billion worth of Chinese imports. Risk aversion seems to be setting in, channeling funds into debt and taking yields lower.
German 10 year yield (0.373%) has broken support near 0.4% on short term chart and could now move lower towards support near 0.3% on the medium term chart.
US 10 year (2.89%), 30 Year (3.0244%), 5 Year (2.77%), 2 Year (2.545%): US 10 Year yield dropped to levels near 2.87%-2.88% yesterday and has risen slightly from there. However it still continues to stay below support near 2.9% on medium term chart. As mentioned before, if this break sustains, it could lead to a further downmove towards 2.60% in the medium term.
US Yield curve inversion fears are gripping the bond markets. The less talked about US 10-7 Year spread is near 0.04% and could possibly invert ie go negative soon. In the past, it has been a precursor to more important spreads ie (10-5 and 10-2) inverting. The 10-2 Year spread had broken long term support near 0.4% in the last few days and is currently near 0.345%
