STOCKS
Dow (24538.06, -0.29%) has support in the 24000-23600 region which is likely to test in the coming sessions. The support as visible on the 3-day candle chart is likely to hold in the medium term, pushing back the index towards 25200 again. But for now the index looks bearish towards 23600.
Dax (11913.71, -2.27%) is almost at the medium term horizontal support on the weekly candles. While the support holds, the index may have some scope of moving back towards 12400 and higher in the medium term; else a break below the current weekly support could indicate a fall towards 11400 soon.
Nikkei (21043.61, -0.65%) is trading just above the important support near 21000. If that produces a bounce, the index may well head back towards 22500; else could come off gradually towards 20000. Keep an eye on price action at 21000.
Shanghai (3240.39, -0.43%) is holding well below resistance near 3350. Also there is current resistance on the daily candles near 3270. While this holds, the near term view for the index is bearish towards 3150-3100.
Nifty (10458.35, -0.33%) is likely to trade within the narrow 10560-10380 region looking at the daily candles but there is enough room on the upside if the medium term channel support near 10400-10380 holds and pushes the index back towards 10800 or higher. Similarly,Sensex (34046.94, -0.40%) could also bounce back towards 35000 in the near term.
COMMODITIES
Brent (64.62) and WTI (61.48) are trading lower. WTI is likely to trade in the 63-59 region in the coming sessions while Brent could move up towards 66 again with a possible downside of 63. Some upmove is possible this week towards 66 and 63 respectively.
Gold (1326.40) is trying to move up again towards 1340 levels while above 1310. Near term looks bullish to sideways.
Copper (3.1280) moved down sharply but has paused above support near 3.07. While the price remains above 3.10, it my move upagain towards 3.20
FOREX
After 2 weeks of Dollar strength, the American President’s ‘trade wars are good’ comment late last week (along with plans of imposing new tariffs on US imports of steel and aluminum) has again weakened the Dollar.
The Dollar Index (89.93), as per our prediction in the morning briefing on 1st March, tested resistance near 91 (by seeing a high of 90.93) and has subsequently dipped from there. There is immediate support for the Dollar Index at current levels – provided by the 13 days and 21 days moving average lines on daily line chart and also by the 5 weeks moving average line on the weekly line chart. On the daily candles, the next support is seen to be near 89.75. If the index breaks these supports, it could signal the beginning of another bearish phase for the Dollar.
The Euro (1.2321), exactly as per our prediction, bounced from support near 1.215 and is now headed back towards levels near 1.25-1.26. However, some resistance could be provided by the 21 days moving average line on the daily line chart near current levels. If it breaches this moving average line, we could expect it to move up towards 1.25 soon.
Dollar-Yen (105.52) broke crucial support near 106.5 on 3 day line charts and is now headed towards support near 104.50-104.75 on the daily candles. On the weekly line chart, we see lower support near 103.75, which could be another crucial long term support level, whose break will confirm medium term bearishness.
The Euro-Yen (130.01) has seen lows near 129.7-129.8 and might now test support on daily candles near 129.5 any time this week or next week. With Euro expected to gain some more strength against the Dollar this week, the test of 129.5 might not happen immediately.
Pound (1.3788) against our expectation of a test of 1.36, seems to be bouncing from support near 1.3775 on the daily candles. If this support continues to hold, we might see Pound move back up towards 1.4 over the coming sessions.
Dollar-Rupee (65.175): Support at 65.00-64.90. Can bounce to 65.40-60-70.
INTEREST RATES
US 10 Year Yield (2.84), US 30 year Yield (3.1234), US 5 year yield (2.596), US 2 year yield (2.22) : US Yields have all dipped further, which might be a result of investors moving away from equity towards debt post Trump’s ‘trade war’ comments. The first half of March might just see muted movement in US yields. As the 21st March Fed meeting comes closer, there could be a rise in yields in anticipation of a rate hike.
(Long term resistance levels for the 4 yields have been as follows: 2.85-2.90, 3.20, 2.7 and 2.2 respectively – a decisive breach of these levels could happen in March 2nd half.)
