STOCKS
Dow (24140.91, -0.16%) is falling as expected and could test 24000-23750 levels on the downside before again resuming its rise towards 24500.
Dax (12998.85, -0.38%) rose sharply from levels near 12900. Sideways consolidation is likely to continue for the week before the index decides on further direction.
Nikkei (22457.74, +1.27%) tested levels below 222000 and is trading higher just now. 22000 would be the initial target for Nikkei.
Thereafter, we need to see if it rises back towards 22800 or come off towards 21800. Preference is for the downside.
Shanghai (3277.73, -0.49%) is likely to test 3250-3200 levels while below 3300. Near term looks bearish.
Nifty (10044.10, -0.73%) fell yesterday too and closed at levels below 10050. While below 10050, the index could test 10000-9950 soon. Near to medium term view remains bearish.
Sensex (32597.18, -0.63%) has support at current levels and in case that holds, Sensex can move up towards 33000 or higher; else a sharp fall is in place and could extend to some more levels on the downside.
COMMODITIES
Surprising fall in crude prices seen overnight. News suggests that the fall came after a report by the American Petroleum Institute that showed a 9.2mln barrel rise in gasoline stocks in the week and an increase of 4.3mln barrels in inventories of distillates. This increase in the fuel stocks lead to a fall in crude prices as this points out to weak demand.
Brent (61.38) surprised by falling sharply, breaking below the support at 62 instead of moving higher towards 65-67 levels. If the current fall continues, it may extend towards 60 before rising back from there.
WTI (56.13) has also come off sharply but could face immediate support near 55.6 which if holds could prevent further fall just now. The fall in WTI has been exactly in line with our expectation, pulling down Brent also with itself.
Gold (1263.35) is down to 1260 support levels. The downside momentum seems to have gathered steam and while that dominates, Gold could well break below 1260 in the next few sessions. Failure to bounce back from current levels could take it down to 1250-1240 in the medium term.
Copper (2.9750) could trade within 2.95-3.05 region in the near term and is likely to remain stable just now. 2.90 is an important support on the downside.
FOREX
Dollar-Index (93.57) is well on its way to test resistance on the 3 day charts at 93.75-94.00, which is also seen as resistance on daily line charts. This could prove to be a crucial level, from where a corrective dip back towards 93 could be expected.
With a rising Dollar Index, Euro (1.18) is also moving swiftly towards support at 1.1775 on the 3 day candles. The same support is also seen on the daily and 3 day line charts, thereby indicating the possibility for a bounce, once 1.1775 is reached.
Dollar-Yen (112.42) had dropped yesterday due to a rise in Japanese 10 year yields, but with some consolidation in the same (see Interest Rates below), it has once again resumed its move towards levels near 113. A dip from near resistance levels (113.5) on the daily line chart could be seen with simultaneous dip of the Dollar Index (see Dollar Index above).
Pound (1.3382), as per our expectations, is close to testing support at 1.335 on the daily charts, from where a bounce could be seen, taking it back towards 1.35 in a week’s time.
Dollar Rupee (64.525) has stayed well above support at 64.20 and looks likely to rise to 64.60-64.80 in the next couple of sessions.
INTEREST RATES
The US yields are all bouncing from support just below current levels. The 5Yr (2.13%), the 10YR (2.35%) and the 30Yr (2.74%) are almost stable and could rise in the coming sessions.
The German-Japan 10Yr (0.23%) yield spread has fallen sharply and while it moves lower, it can pull down EUR-JPY to much lower levels in the near term.
The Japan-US 10Y (2.28%) has paused for now and unless it come down further, we cannot negate a scope of rising back to test 2.35%.
The German-US 10YR (-2.05%) is down again and looks bearish towards -2.08% in the near term.
