STOCKS
Stock indices are trading in the red globally.
Dow (25598.74, -3.15%) has broken below 26000 but could test crucial support at 25500. Note that 25500 could produce a good bounce triggering a decent rally for the near term. Only if the index fails to bounce back from 25500, we would consider a possible fall towards 25000 or lower. For now, the index looks bullish while above 25500.
Dax (11712.50, -2.21%) is down to 11700 as expected. The weekly resistance near 11600 now comes into the picture. Dax could see a fall towards 11600 before bouncing back from there in the medium term.
Nikkei (22591.29, -3.89%) came off sharply to test important support levels just above 22400. While the support holds, Nikkei could bounce back towards 23500-24000 levels once again. Near term looks bullish and the index seems ready for a decent rise in the near term.
Shanghai (2644.18, -3%) has broken below 2700 and is likely to re-test 2600 on the downside. Unless a bounce from 2600 is seen, the current fall looks strongly bearish and could well open up downside chances of 2550-2500 in the medium term.
Nifty (10460.10, +1.54%) recovered a bit yesterday as 10200 support seem to be holding well for now. The current rise could take it towards 10600 but the scope of another fall cannot be negated. The index could again come off towards 10200-10000 from 10600 in the near term. Currently Nifty could be in a corrective up move which could be followed by another fall towards 10200-10000.
COMMODITIES
Commodities are trading weak and look bearish in the near term. While Crude prices fall, Copper could also trade low or at least remain stable.
Brent (81.68) has tested resistance near 86-87 on the 3-day candle chart and while that holds, the price could fall a bit towards 78-77 in the near term before attempting a rise later on. Near term looks bearish.
WTI (72.06) could test support near 70-71 region on the downside.
It is very likely that Gold (1197.10) is trying to base out while trading within the 1220-1190 region. A break out preferably on the upside could soon be on its way. While above 1170/90, Gold looks bullish after completion of the current consolidation phase.
Copper (2.74) could not sustain a rise seen yesterday and fell back to levels near 2.75. While resistance near 2.85 holds strong, there could be an eventual fall towards 2.65 again in the medium term.
FOREX
Watch resistances @ 1.162 (Euro) and 1.325 (Pound). Dollar Rupee has crucial support near 74.
Euro (1.1560): The break above 1.155 has reduced chances of a dip towards 1.14 in the next 1-2 weeks. On the upside now there are 2 crucial Resistances which could be targeted – first at 1.162 (21 days MA) and above that, at 1.17 (trendline resistance).
Dollar Index (95.23) : As the Euro rises to 1.162, Dollar Index should drop to support near 94.98 (21 days MA). A further rise to 1.17 on Euro would correspond with levels near 94.5 (trendline support) on Dollar Index.
Dollar Yen (112.11) has seen a sharp fall and now has crucial trendline support in the 112.0-111.5 zone. If this support is also broken, it could confirm that Dollar Yen has topped out near 114.5.
Euro-Yen (129.60) : A week close below the 21 weeks MA near 129.13 could accelerate a drop towards 127 (support on weekly candles) in the next couple of weeks.
Pound (1.3227) looks like it could break above resistance near 1.325 on daily candles and target levels near 1.342 (55 weeks MA) in the next 1-2 weeks. The possibility of a fall to 1.28 in the near term now looks significantly reduced.
Aussie (0.7070) again fell yesterday after having broken above 0.71. On the downside it has support on daily candles near 0.70 and on the upside, there are resistances at 0.710-0.715-0.720. A downmove to 0.70 (if it happens), could be very bearish since long term support on weekly line chart would clearly have broken then.
Dollar Rupee (74.205): Watch if it comes down towards 74 today (following Euro strength) or moves up to 74.60-80 (following the Dow decline). Watch Supports at 74.00 on Dollar-Rupee and 8.00% on the 10Yr GOI today. If they break, a dip to 73.75-60 and 7.90% may be seen respectively. Else a fresh upmove could still take place.
INTEREST RATES
India 10 year yield (8.03%) : Watch Support @ 8%. If it breaks, then lower support near 7.90% could be approached.
The US 10 Year (3.16%) and 30 year (3.34%) have come off sharply and could now move even lower towards 3.10% and 3.30% respectively.
The 10 Year German-US spread (-2.61%) has moved up to test resistance near -2.60% on medium term chart. If it comes off from here again, our earlier forecast of a downmove to -2.80% over the next few weeks would remain intact.
German 10 year yield (0.55%) is likely to see a dip from resistance on medium term chart towards 0.40%.
Japan 30-5 year yield spread (0.98%) has broken above long term resistance near 0.95%. If this break persists, it could imply that the 30-10 (0.78%) could also break above resistance near 0.82%. If that happens, it could be very bullish for bond yields globally.
