STOCKS
Dow (24252.80, -1.33%) and Dax (12270.33, -2.46%) both came off sharply yesterday. Dow may test immediate daily support near 24000 from where a corrective bounce back to 24750-25000 is possible. A break below 24000, if seen could take the index down to 23200 as seen on the 3-day candles.
Dax is likely to test weekly trend support near 12100 which if holds could push the index back to higher levels. A break below 12100, if seen would be vulnerable for a fall towards 11800.
Nikkei (22221.33, -0.52%) seems to be gradually coming down from 22800 levels and looks bearish towards 21800-21400 levels on the 3-day candles. There is enough room on the downside just now and if the 22800 level holds strong, near to medium term is likely to be bearish.
Shanghai (2846.62, -0.44%) opened with a gap down today and has lost immediate hopes of any corrective upmove towards 2950. The current fall seems very sharp and may take the index further down towards 2750.
Sensex (35470.35, -0.61%) and Nifty (10762.45, -0.55%) is likely in the last leg of the narrow range-trade and may break out on either side within the next 2-sessions. A break on either side would determine the direction for movements at least the next one week.
COMMODITIES
Overall commodities look bearish for the near to medium term.
Brent (74.79) could come off from 76 and re-test 73-72 in the near term while within the downward channel as seen on the daily candles. 72 is a good support on the longer term charts and we may not see a fall below 72 in the medium term.
WTI (68.24) is coming off from levels below 70 and while that holds, the WTI price also looks bearish towards 67-66 levels in the near to medium term.
Gold (1265.50) has come off instead of trying to move up towards 1280. While below 1270, there is high chance of testing 1250-1240 in the coming sessions. Near term looks weak.
Copper (2.9885) has broken below 3.0 and opens up chances of testing lower levels of 2.90 in the near term. View is bearish for the near to medium term.
FOREX
Euro (1.1717) : Euro moved past the 21 days MA near 1.167 yesterday and is now about to test trendline resistance on daily candles near 1.1725. We prefer a dip from here but if it breaches this resistance, it may become bullish towards its previous high near 1.185.
Dollar Index (94.195): Dollar Index has moved lower towards support near 94.1-94.0 on daily candles. We prefer this support to hold, but if it doesn’t, the next target on the downside would be near 93.
Dollar Yen (109.45): Dollar Yen continues to trade slightly below support (near 109.5) on daily candles. A further dip below 109.2-109.0 would indicate the beginning of Yen strength in the medium term. Support near 107 on 3 day line chart could be tested in a month’s time.
Euro Yen (128.23): Euro Yen has temporary support near 127.5 on daily candles and resistance near 129.5-130.0. If Euro dips from 1.1725 and Dollar Yen stays below 109.5, Euro Yen might break below 127.5 this week. A gradual downtrend towards 1.24 (support on weekly candles) in the weeks ahead could happen.
Pound (1.3257): Pound could rise till 1.335 in this week before dipping again 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 (68.125) looks bullish towards 68.30 in the coming sessions.
INTEREST RATES
The risk aversion sentiment continues to increase as the US Treasury Department is said to have started drafting limits on Chinese investment into U.S. companies. Fears of a trade war are at its peak and could push bond yields lower as investors move away from risky assets towards safer govt bonds.
US 10 year (2.88%), 30 Year (3.03%), 5 Year (2.75%), 2 Year (2.53%) :
Having broken support on medium term chart near 2.9%, the target for the 10 year yield in July could be lower support near 2.65%-2.70%.
Similarly, the 30 Year yield’s break of support near 3.05% on short term chart could be the beginning of a downtrend towards 2.9%.
