STOCKS
Asian Indices seems to have been positioned better when compared to the Dow and DAX. China’s Shanghai and India’s Sensex and Nifty 50 are bullish in the near term while Japan’s Nikkei is nearing a key support. Dow is likely to fall further in the coming days while the DAX looks mixed in the near term.
Dow Jones (25,673.46, -133.17, -0.52%) continues to remain under pressure as expected. As mentioned yesterday, Dow Dow is in a danger witnessed a sharp corrective fall to 25,100-25,000 in the coming weeks.
DAX (11,587.63, -33.11, -0.28%) is continuing to consolidate between 11,500 and 11,700 within its overall uptrend. A breakout on either side of 11,500 or 11,700 will decide the next move.
Nikkei (21,440.50, -156.31, -0.72%) has come closer to the key 100-day moving average support level of 21,404. A strong bounce from here can take it to 22,000 in the coming weeks. But a break below 21,404 can drag it to 21,250.
Shanghai (3,104.11, +2.17, +0.07%) has gained momentum and can move further higher to test the next key resistances of 3,150 (Fibonacci retracement level) and 3,190 (200-week moving average).
Sensex (36,636.10, +193.56, +0.53%) and Nifty 50 (11,053, 65.55, 0.60%) retains their strength and has risen further. The bullish outlook is intact. Sensex has risen past its resistance at 36,500 and can now test 36,950-37,000 in the near term. Nifty 50 has risen above the psychological level of 11,000 and remains bullish for a test of 11,150.
COMMODITIES
Commodities broadly remains stable and can consolidate in the near term before a clear trend emerges.
Gold (1287) and Silver (15.1) are holding above their key supports of 1280 and 15 respectively but are not gaining strength for a strong bounce. While above 1280, a corrective rally to 1295-1300 cannot be ruled out in gold. Similarly Silver can bounce to 15.4-15.5 on a break above 15.15. On the other hand, a break below 1280 can drag gold to 1275 and 1270 while silver can test 14.85 on a break below 15.
Copper (2.92) has dipped again. As mentioned yesterday it can consolidate between 2.89 and 2.98 before moving up to 3.0 and even higher levels.
WTI (56.3) dipped to 55.45 and has bounced from there. The near-term outlook is mixed and the broad 55-58 sideways range is likely to remain intact for some more time.
Brent (66.15) continues to remain stuck in between 65 and 66.35 with its broad 64-68 sideways range. A strong break above 66.35 can take Brent higher to 67 and 67.30 in the near term.
FOREX
Dollar-Index (96.85) is almost stable and has scope of testing resistance at 97.25 as seen on the daily candles. A decline from 97.25 could be seen next week.
Euro (1.1307) also has immediate support at 1.1250 which is likely to get tested in the next few sessions before a bounce back towards 1.1350/14 is seen. Near term looks bearish while a bounce is expected in the medium term (say next couple of weeks).Markets await ECB meeting today.
Euro-Yen (126.26) is falling as expected. There could be an interim support at 126.0-125.70 which could produce a medium term bounce. Else, a break below 125.70 could take it lower towards 125.20.
Dollar Yen (111.66) has dipped slightly. While trend resistance near 112.5 holds, Dollar-Yen looks bearish towards 111.
Pound (1.3184) has immediate support at 1.31 as mentioned yesterday. If 1.31 holds, we could see a rise back towards 1.33 else the current fall could extend towards 1.30-1.2950 in the coming 1-2 weeks.
Aussie (0.7043) has tested immediate support near 0.7025 on the daily candles. While that holds, Aussie could see a rise to 0.7150. Failure to sustain above 0.7025 could take it towards lower support near 0.6950.
USDCNY (6.7082) has dipped after testing levels near 6.7180 yesterday. Near term trade region is likely to be 6.72-6.66. For now, we could see a dip towards 6.68 while 6.72 holds.
Dollar Rupee (70.29) may test 70.10 today. It would be crucial to see if Dollar-Rupee bounces back from 70.10 or heads lower in the near term. A break below 70.10 could open up chances of falling towards 69.75 in the medium term. Watch price action near 70.10.
INTEREST RATES
The US yields have fallen as expected. The 2Yr (2.52%), 5Yr (2.50%), 10Yr (2.69%) and 30Yr (3.07%) are trading lower today and could continue to fall to test support levels on the short term charts. The 30Yr could fall towards 3% while the 10YR and 5Yr could fall towards 2.64% and 2.45% respectively.
The German-Japan 10Yr (0.13%) has come off sharply to re-test support near 0.11%. A bounce from here towards 0.19% is likely and indicates a rise in Euro-Yen in the near term.
The UK-US 10Yr (-1.46%) is facing rejection from near term resistance and could fall towards -1.50% in the near term. While the spread falls, it could indicate weakness in Pound to continue.
The 10Yr GOI (7.5723%) has risen yesterday. A test of 7.60/65% looks possible in the near term while above 7.52%.
