STOCKS
Dow (23644.19, -1.90%) came off in line with our expectation to levels below 24000. As mentioned yesterday, near term is likely to be ranged in the 24500-23500 region. On the longer run, there could be chances of breaking below 23500-23000 on the downside.
Dax (12096.73, +1.31%) was closed yesterday. Downward channel of 12300-11700 is holding well for now. A test of 12200-12300 is possible before the index comes off towards 11800-11700 levels again.
Nikkei (21218.06, -0.80%) has fallen sharply instead of sustaining above 21400. While the index trades lower, there could be chances of re-testing 21000-20800 or lower in the coming sessions as mentioned yesterday.
Shanghai (3133.80, -0.93%) came off from levels seen yesterday and is finding it difficult to move above 3200 just now. This could keep the index ranged in the 3100-3200 region for some more sessions. Note that a rise above 3200 is necessary to take the index higher in the medium term.
Nifty (10211.80, +0.97%) rose yesterday contrary to our expectation of a dip towards 10020. While the downward channel holds as seen on the daily candles, resistance near 10260 may push the index lower in the coming sessions.
Sensex (33255.36, +0.87%) could face resistance near 33250 and while that holds, we could see a fall towards 32500 or lower in the coming sessions.
COMMODITIES
Brent (67.84) and WTI (63.19) have fallen sharply and looks bearish in the near term. Brent could come down towards 66 in the next few sessions. WTI could also come down to test 61 on the downside before trying to move up again. Near term view is bearish for the Crude.
Gold (1342.70) could move up towards 1350/60 levels to re-test resistance. Unless 1360 breaks on the upside, Gold could remain stuck in the 1360-1300 region for a couple of more weeks.
Copper (3.0650) is slowly moving up. Immediate resistance seen near 3.0700/50 which if breaks on the upside could take it higher towards 3.12-3.15 in the coming sessions.
FOREX
The Dollar index (89.99) has continued to respect resistance near 90.10-90.15 in the downward channel on daily candles. As mentioned yesterday also, some resistance is also being provided by the 13 weeks moving average on the weekly line chart. A breach of that would mean a test of higher resistance (on weekly line chart and 3 day candles) near 91 and a dip thereafter.
Euro (1.2307) saw a low of 1.2282 yesterday and might well drop lower to test support on 3 day candles and daily line chart near 1.225 this week. As mentioned yesterday, this could happen simultaneously with the Dollar Index breaching the 13 weeks moving average and moving towards 91.
Dollar Yen (105.93) as per our expectation yesterday, has dipped further after having tested resistance in the downward channel on daily candles near 106.93 last week. The 13 days moving average line on the daily line chart might make it pause for a bit in this downmove, but we could expect it to attempt a test of support near 104.5 by next week.
Euro Yen (130.38) as expected, has dipped towards 130 and might now move lower this week towards support near 129.5-129.0 on the daily candles. A test of 1.225 by Euro and 105.5 by Dollar Yen yields a target of 129.24 for the Euro Yen this week.
Pound (1.4057) is seeing a slight pause in its downmove towards support near 1.395-1.390 (seen as support on daily candles, 3 day candles, 3 day line chart). We could expect it to test this support by next week.
Dollar Rupee (65.175) – Repeating yesterday’s comment: Resistance at 65.25 has held. See 65.00 and 64.85 this week.
INTEREST RATES
US long term yields continue their fall in line with our earlier expectation of a slow decline in yields through Apr-May.
US 10 Yr Yield (2.7371%), 30 Yr (2.9714%), 5 Yr (2.56%), 2 Yr (2.254%) :
Yesterday we had expected the 10 Year yield to find support near 2.75% on the medium term chart – but this support level might be slightly lower near 2.70% – as seen on short term chart as well. A break of 2.70% (less preferred for now) would mean a downmove towards horizontal support on medium term chart near 2.6%.
The 30 yr yield might see a bounce soon from its current levels (2.97%) near support in the downward channel on short term chart. There is support just below 3% on the medium term chart as well. A break of this level, could however imply a new downside target near 2.85%.
