STOCKS
Dow (26486.78, +0.15%) has important support just above 26000. While that holds, a bounce back towards 26750 or higher is possible in the medium to long term. But in case the index fails to bounce back from 26000 levels, it could become vulnerable to a fall towards 25500-25300 region.
Dax (11947.16, -1.36%) has fallen below 12000 and is now headed towards lower support at 11900 on the 3-day candles. Weekly charts show lower possibilities of testing 11600. Dax looks bearish just now and could fall to 11900-11600 levels in the near term. We may expect some bounce from weekly support near 11600.
Nikkei (23564.91, -0.92%) is back into the 24000-22800 channel and looks bearish towards 23200-23000 in the near term.
Shanghai (2718.82, +0.085%) is trading lower. If it breaks below 2700, it could head towards 2650-2600 again in the near term.
Nifty (10348.05, +0.31%) fell in line with our expectation. Crucial support is visible near 10000-9800 region which is likely to be tested before the index attempts to bounce back in the longer term. There could be some interim corrective up moves but while below 10500, scope of testing 10000 on the downside remains open.
COMMODITIES
Supports near crude prices mentioned yesterday is holding well. Both Brent (84.10) and WTI (74.51) have bounced back as expected. While these support levels hold, Crude prices could see one last leg of a rally in the near term before entering into a medium term correction.
Brent, while above 82, can see a rise back towards 86-90 in the near term. 80-82 is an important support region to keep an eye on. WTI is also looking bullish towards 78-80 for the near term.
Gold (1193.60) fell sharply to re-test immediate support at 1190. Note that the narrowing range of 1210-1190 could last for another 4-5 sessions before a sharp break on either side. An expected rise above 1210 could take it higher towards 1240-1260 in the longer term while a break below 1190 if seen and sustains could take the price towards 1150 this time.
Copper (2.7855) is likely to hold above 2.70 just now and could trade in the 2.70-2.85 region in the near term. While support at 2.70 holds, Copper could eventually break above 2.85 in the longer run.
FOREX
Watch resistance near 6.935 on Dollar Yuan. Dollar Rupee has immediate support @ 74.0-73.8.
Dollar Index (95.75) : A rise towards crucial resistance near 96.5 in this week / by next week is quite likely. If 96.5 is also broken, then channel resistance near 98 on daily line chart could be the next upside target for the Dollar Index.
Euro (1.1489) has paused for a bit at support near 1.1475 on daily candles. We prefer a break below this support to target lower support near 1.14 in the near term. The next crucial level is the 200 weeks MA @ 1.132. Note that if Dollar index rises to 98, then Euro could correspondingly target 1.12.
Dollar Yen (113.11) : On a decisive break below 113, Dollar Yen could move down to trendline support at 112.0-111.5 by next week. This is the more crucial support, which if broken, could confirm that Dollar Yen has topped out near 114.5.
Euro-Yen (129.97) might have some support near 129.14, provided by the 21 weeks MA. If it breaks below that, there would be good chances of a fall to 127 in the next couple of weeks.
Pound (1.3092) has immediate resistance near 1.3150 and immediate support at 1.30. Preference is for a break of 1.30, leading to a fall to 1.28 (lower support) in the next couple of weeks.
Aussie (0.7083) : While below 0.71, chances of a fall to 0.70 in this week still remain open. Above 0.71, there is resistance near 0.715-0.720 which could keep the upside capped in the near term.
Dollar Yuan (6.9288): There could be some resistance near previous high of 6.935. Keep a watch on this level.
Dollar Rupee (74.065): Immediate support has now moved higher to 74. Next support is at 73.80. While above 73.80, a rise towards resistance at 74.50-60 could happen.
INTEREST RATES
India 10 year yield (7.97%) has broken below the important 8% support and could now move to lower support at 7.90%.
Repeating yesterday’s comments: Last week, data on US NFP and average hourly wages both showed lesser growth as compared to the previous month . However, against expectations, the US unemployment rate fell to a 48 years low of 3.7% – this figure might have kept US yields elevated.
The US 10 Year (3.24%) and 30 year (3.43%) have important resistances in the 3.25%-3.30% and 3.40%-3.45% regions respectively, which could make these yields come off in the near term.
The 10 Year German-US spread (-2.71%) is likely to move down towards -2.80% over the next few weeks.
German 10 year yield (0.53%): Resistance on medium term chart near 0.57%-0.60% has held and the yield could dip further towards 0.40% from here.
Japan 10 year yield (0.16%) rose above 0.14% last week and could now target levels near 0.20%-0.25% in the next 2-3 weeks.
