STOCKS
Dow (24580.89, +0.49%) could get some decent support near 24250 but overall there could be chances of a fall towards 24000 in the medium term. Near to medium term looks bearish towards 24000 with some short corrective upmoves.
12700 is the earlier support turned resistance and could hold in the near term keeping Dax (12579.72, +0.54%) in the 12400-12700 region for some time. Some ranged and stable movement is possible in the next few sessions.
Although Nikkei (22409.10, -0.48%) got some support at 22000, the resistance near 22800 seems to be holding well and is important. While the index trades below 22800, medium term looks bearish with scope of testing 21500 on the weekly candles.
Shanghai (2884.76, -0.17%) could trade sideways in the 2800-2950 region just now. An immediate rise towards 2950 is possible from where the index could come off towards 2800 or lower in the longer run.
Sensex (35689.60, +0.73%) and Nifty (10821.85, +0.75%) are trading in a narrow region of 35250-35750 and 10650-10850 respectively. This could continue for a couple of more sessions, before the indices break on either side of the said range. Till then , medium term direction is unclear.
COMMODITIES
Resistance on the Brent (74.12) near 76 seems to hold strong just now and while that holds, Brent could be pushed back towards 73 or lower in the coming sessions. Only a break above 76 would open up chances of testing higher levels in the longer run.
WTI (68.34) has risen sharply from levels just above 64 and while that holds, an eventual rise towards 72-73 is possible. For now, while below 70, the price could dip back towards 67 before again trying to move up.
Gold (1271.60) could attempt to move up from 1260 towards 1280 in the coming sessions. Immediate scope for an upside persists.
Copper (3.0335) is likely to trade sideways above 3.0. A break below 3, if seen could be vulnerable to a further fall towards 2.95-2.90 while a bounce from 3 may take it back towards 3.12-3.15 in the medium term.
FOREX
Euro (1.1656) : As per expectation, Euro moved up on Friday, testing the 21 days MA near 1.1675. It could face some resistance near 1.167, but ultimately, we expect it to move higher towards trendline resistance on daily candles near 1.170-1.175 and then eventually dip from there.
Dollar Index (94.52): Dollar Index has support near 94.25-94.00 (earlier mentioned as 94.5). It could move lower towards this support in this week as the Euro possibly rises towards 1.17.
Dollar Yen (109.53): Dollar Yen is currently trading below support (near 109.7-109.8) on daily and 3 day candles. If this break persists for a couple of sessions, this might be the beginning of Yen strength in the medium term. The next target would be the 21 MA near 109 on 3 day line chart and below that, support near 107, which could be tested in a month’s time.
Euro Yen (127.61): Targets of 1.17 and 109 on Euro and Dollar Yen yield 127.5 on Euro Yen, which implies another few sessions of ranging for the pair near the horizontal support on weekly line chart. However, as mentioned previously, likelihood of a gradual downtrend towards 1.24 (support on weekly candles) stays intact.
Pound (1.3257): Pound saw a high near 1.3315 on Friday, after having bounced from support on daily candles. It could move higher towards channel resistance near 1.338 in the next 1-2 sessions and then dip back towards 1.32-1.31. It’s target for the next 1-2 weeks could be horizontal support near 1.30 on weekly candles.
Dollar Rupee (67.84): Dollar Rupee may bounce from 67.80-67.60 levels in this week back towards 68+.
INTEREST RATES
Increased risk aversion is making bond yields dip in Germany and USA. The German 10 Year yield (0.337%) broke short term support near 0.4% last week and is now targeting support near 0.30% on medium term chart.
US 10 year (2.875%), 30 Year (3.02%), 5 Year (2.746%), 2 Year (2.53%) : US 10 Year yield has sustained its break of support on medium term chart. As mentioned on Friday, there are two opposing forces acting on it currently:
1) the expectation of higher inflation in case the trade war sentiment intensifies (would be bullish for yields)
2) a sentiment of risk aversion due to the trade war (would be bearish for yields)
We might have to wait for a break below 2.85% before we can say that the 2nd factor is stronger.
