STOCKS
Dow (25187.70, -0.50%) traded lower as expected. Resistance on the 3-day candle is holding well and the index could fall towards 25000 or even lower in the near term.
Dax (12358.74, -0.53%) has immediate support at 12300 and if that holds, a short bounce back towards 12500-12600 is possible. Note that there is important support just below current levels and there is high chance of a bounce back in the near term. Dax looks bullish for the near to medium term.
Nikkei (22123.36, +1.22%) could trade in the 22000-22400 region in the next 2-3 sessions. A break below 22000, if seen could open up chances of a fall towards 21200 in the medium term. For now a bounce to 22400 looks possible.
Shanghai (2783.27, -0.094%) was almost stable yesterday. Trade within 2800-2700 is likely to continue in this week.
Nifty (11355.75, -0.65%) seems to be holding well below the 11500 resistance and while that holds, Nifty could come down to 11200. Near term looks weak.
COMMODITIES
Nymex WTI (67.53) is likely to hold below 68 just now coming back to re-test 66 while Brent (72.92) could trade in the 73.50-71.00 region in the next 3-4 days. Overall ranged sessions for Crude is possible this week.
Gold (1202.60) broke below the initial support at 1210 and has come down to test 1200. If 1200 holds we could see a rise back towards 1125; else a fall below 1200 could open up chances of testing 1175 on the downside. Near term looks stable to bearish.
Copper (2.7265) is trading above 2.70 and could be stuck in the 2.70-2.85 region for some more time. A break below 2.70, if seen could make it bearish towards 2.65 on the downside.
FOREX
After 2 days of drastic weakening, the Turkish Lira (6.875) is consolidating for a bit below 7. Charts however suggest that some more upside could still be possible, thereby implying that Yuan, Euro, Pound, Rupee and some other emerging market currencies could weaken more against the Dollar.
Euro (1.1410): Support near 1.1360 is holding so far. But this might just be a bit of a consolidation. Need a rise past 1.1450 at least to think of a correction. While below 1.145, a test of trendline support on weekly line chart near 1.13 could still happen in this week.
Dollar Index (96.295): Dollar Index is seeing some consolidation after having tested resistance on daily candles near 96.5. While above 95.7-95.5, it could still rise towards 97 in this week, which could thereby correspond to Euro testing 1.13.
Dollar Yen (110.78): Dollar Yen is trading just below resistance on daily candles near 111. While below this, a dip towards 109.5 is possible in the sessions ahead. A rise above 111 could open up possibilities of another test of 113 in the next 1-2 weeks.
Euro Yen (126.40): Euro Yen saw a low near 125 yesterday, slightly higher than its earlier low (May ’18) near 124.62. Although it is seeing a slight consolidation currently, further bearishness could pause only on a rise past 127. While below 127, a fall below 124.62 to target support near 124.0-123.5 could take place by next week.
Pound (1.2768): After having broken channel support near 1.28, Pound could drop further in this week towards 1.270-1.265. In the next 2-3 weeks, bearishness could extend till support on weekly candles near 1.25-1.22.
Dollar Rupee (69.9375): Near term continues to be highly overbought. Chances of 70.30 look possible today with a possibility of 70.30 holding in the near term. Off shore NDF trading near 70.08 – hence, an open above 70 could be expected.
INTEREST RATES
Bond yields in US, Germany and Japan could see some more dips in the days ahead while those in less developed economies could see a rise, as the crisis in Turkey might make investors switch to safer assets. Moreover, the US-China trade tensions might only intensify moving forward – which could thereby further enhance the ‘risk off’ sentiment.
US 10 year yield (2.88%), 30 Year (3.05%), 5 Year (2.73%), 2 Year (2.62%):
The US 10 year yield again moved up yesterday from the crucial support near 2.82-85%. It wasn’t able to break below this support in Jun-Jul ’18 either. As written yesterday – any delay in breaking below 2.82% could imply that the support is still strong and that, another rise beyond 2.9% could happen anytime soon. While below 2.9%, a break below 2.82% and a test of support near 2.75%-2.70% could still take place.
German 10 year bond yield (0.31%) continues to test support near 0.3% on medium term chart. A break below 0.3% would make it bearish towards lower support near 0.18%-0.19%.
