STOCKS
Dow (25995.87, +0.080%) is stable and is ranged just now. A test of 25750-25250 looks possible on the lower side but there is enough room towards 26250 and higher levels too. Trading right in the middle of the up-channel on the daily chart, there is now equal chances of moving on either side.
Dax (11955.25, -0.71%) is headed towards weekly support near 11600 and looks bearish in the near term. The price is strongly under the control of the bears and may continue to decline over the coming week. A slight pause could be expected near 11800 before it resumes towards lower levels of 11600.
Nikkei (22264.11, -1.00%) has fallen 1% and could come down to test daily candle support near 22000 from where a short term bounce is possible. Immediate view is bearish.
Shanghai (2709.71, +0.67%) has resistance at 2750 and has to break above this to move up further. While copper looks slightly bullish, shanghai could see limited fall and could either remain ranged or try to move up from here. While below 2750, downside cannot be negated.
Nifty (11536.90, +0.52%) has immediate support at 11400. Yesterday the index rose, moving back above 11500 and if this sustains, it could move back to re-test 11600+ levels soon. Else a test of 11400 at least could be possible in the near term.
COMMODITIES
Crude prices rise slightly after release of the US inventory data that states a fall to Feb’15 low of 401.49 mln barrels.
Although the crude prices are trading slightly higher just now, the resistance on the Brent (76.65) daily chart may hold and eventually push the prices to lower levels in the near term.
WTI (67.87) could be dragged down towards 66, if Brent comes off just from the mentioned resistance.
Gold (1207.70) has possibly seen it’s low in August and could now start moving upwards slowly. While above 1190, the price could move up towards 1215-1220 in the near term. Very short term support near 1200 may hold just now. Trade in the 1220-1200 region looks likely in the coming 1-2 weeks with a possible downside extension to 1190 and some sessions of ranged sideways movement.
Copper (2.6365) has risen a bit in line with our expectations of a possible test of 2.65. Medium term support near 2.58-2.60 may hold while copper slowly inches up in the near term. A sustained break above 2-65 and further above 2.70 is needed to establish a medium term low and continue rising higher in the longer run. Till then a fall back towards 2.60 cannot be ruled out.
FOREX
Both Euro-Dollar and Dollar Rupee have a crucial next 2-3 sessions ahead. Inability to break above 1.165-1.170 by EURUSD would increase chances of bearishness below 1.155. On USDINR, failure to correct to 71.70-60 in today’s session might lead to another rally – this time towards 72.35.
Euro (1.1624): Resistance near 1.165-1.170 and support near 1.16 on daily candles are currently holding for Euro. Lower down, there is support near 1.155 as well. Currently, a break above 1.17 or below 1.155 would be significant – either case would establish the trend for the next move. Our preference is tilted towards the bearish side ie towards a break below 1.155. Maybe the markets are awaiting the ECB meeting next week.
Dollar Index (95.00) : Symmetrical with the situation on Euro charts, Dollar Index has support in the 95.0-94.5 zone and resistance slightly above near 95.5. A breach above 95.5 could correspond with a break below 1.155 on Euro while a break below 94.5 could happen if Euro breaches 1.17. Preference is for a breach above 95.5.
Dollar Yen (110.61) is testing support on 3 day candles near 110.50. A break below 110.50 could lead to a test of previous low near 109.75. While above 110.5, a rise back towards 111-112 remains possible.
Euro Yen (128.57) is staying below the 21 weeks MA near 129.50. A week close below 129.50 would increase chances of bearishness in the next week. On weekly line chart, support trendline near 128 would have to be broken in the next 1-2 weeks to open up lower levels.
Pound (1.2928): Immediate resistance near 1.295 on daily candles is holding on Pound for now. Higher up, there is crucial resistance near 1.305-1.310. We expect a correction in the near term – either from current levels or after a small rise to 1.305.
Turkish Lira (6.579) looks like it could move down towards support near 6.46 in the next week.
Dollar Rupee (71.99):
If a correction towards 71.70-60 is not seen in today’s session, the chances of a test of 72.35 rises. We are looking for a correction in the near term- either from the 72.10 resistance, or from 72.35.
Euro-Rupee (83.657) : Crucial resistance near 84. Could produce a dip in the near term.
INTEREST RATES
In the absence of any step by the government, he Indian 10 year GOI (8.056%) could again rise towards 8.10%-8.15% in the near term. Levels near 7.9%-7.8% become crucial support levels in the weeks ahead – while above these levels, bullishness in the Indian 10 year yield could persist.
Following news points are currently important in context of US Yields:
Slight disappointment in employment data – which led to a dip in US yields.
Improvement in US manufacturing data released on Tuesday (bullish for yields).)
USA and Canada’s inability to reach a trade deal (bearish for yields)
Impending possibility of $200 bn worth of tariifs by USA on China (very bearish for yields)
Note that the May high of 3.125% for the US 10 year yield might have been the year’s top.
US 10 Year Yield (2.88%) is starting to dip again from the 2.9% resistance level. Another downmove towards 2.85%-2.82% could be on the cards. Crucial support at 2.82% would need to break decisively for lower levels to be tested.
Japan 10 year bond yield (0.10%) has again dipped after testing resistance near 0.12%. Levels near 0.12%-0.13% are slowly getting established as the new resistances for the Japanese 10 year bond yield (earlier the resistance was near 0.10%).
