STOCKS
Overall equities have declined sharply and look bearish for the near term.
Dow (25502.32, -460.19, -1.77%) tumbled breaking below the key support level of 25650 and looks vulnerable for a fresh fall to 21200-21180.
DAX (11364.17, -185.79, -1.61%) declined breaking below the support at 11450 which we had expected to hold. Next supports are at 11280 and 11230 which are likely to be tested while it trades below the 11450-11500 resistance region.
Nikkei (20930.27, -697.07, -3.22%) has failed to sustain above the 21-MA support near 21470 as mentioned last week and has instead opened with a gap down today. Near to medium term looks bearish with a possible fall towards 20750-20500.
Shanghai (3072.72, -31.68, -1.02%) has broken below 3100 contrary to our expectation of a trigger towards 3150-3180. Although there is immediate support near 3025, the index is trading near important resistance on the 3-day candles and could come off sharply towards 3000-2950 if the resistance holds.
The uptrend in the Sensex (38164.61, -222.14, -0.58%) and Nifty (11456.90, -64.15, -0.56%) may take a pause this week. A corrective fall is on the cards. Sensex can fall to 37960 in the near term. A break below it can drag the index to 37725. Nifty can test 11320, a break below which can see the fall extending to 11250.
COMMODITIES
Gold (1314.80) has supports at 1310 and 1305 which are likely to limit the downside in the near term. While above 1305, a fresh rally 1320 and 1330 is possible in the coming days.
Silver (15.45) is slightly mixed. An immediate support is at 15.35. A bounce from there can take the prices higher to 15.55 and 15.60 again. But a break below 15.35 can drag silver to 15.20.
Copper (2.8515), as against our expectation has tumbled breaking below the support level of 2.88. A fall below 2.84 can drag the prices further lower to 2.82 and 2.81 in the near term. Resistances are at 2.86 and 2.88.
WTI (58.45) has failed to get follow-through buyers above 60. It may remain range bound between 58 and 60. The bias remains bullish for WTI to break 60 and rise to 61-62 in the short term.
Similarly, Brent (66.45) has failed to sustain above 68 and has come-off sharply towards the end of last week. It can remain range bound between 66 and 68 for some time and a breakout on either side of 66 or 68 will decide the next move.
FOREX
Volatile movements seen in the currency pairs since the last 1-2 sessions. Dollar looks strong and could continue to remain so for the near term.
Dollar-Index (96.62) has bounced well from 95.75 and while that holds, the index looks strong towards 97.50/75 levels. However, 97 could act as an interim resistance and push the index back towards 96.00-95.75 before the index resumes a rise back towards 97 or higher.
For Euro (1.1299), 1.1450 has been holding well for the last 2-sessions and a test of 1.1250 looks likely in the near term. A break below 1.1250, if seen and sustained could be bearish towards 1.12 in the medium term. Overall Euro looks bearish while below 1.1450.
Euro-Yen (124.028) has fallen breaking below support near 125.20-124.40. While below 124.40, the pair could fall towards lower support at 123 before again bouncing back towards 126 in the medium term.
Dollar Yen (109.79) is also looking strongly bearish and may fall towards 109-108.5 in the near term. Interim bounce is possible from 109.80/75 levels but could be short lived with higher chances of a gradual fall targeting 109.
Aussie (0.7077) is almost stable and has been coming off from resistance near 0.7150. While the daily trend resistance holds, Aussie could fall targeting 0.70-0.6950 in the coming sessions.
Pound (1.3197) is likely to trade within 1.30-1.34 region over the next few sessions. While above 1.30, it looks bullish towards 1.34.
USDCNY (6.7124) has immediate resistance near 6.73 and while that holds, we could see some consolidation within 6.68-6.73 levels for some time. A break below 6.68 or above 6.73/74 would initiate fresh movement on either side. For now we may consider ranged movement for the next few sessions.
Dollar-Rupee (68.96) has bounced well last week. While the momentum looks strong, USDINR could continue to move up targeting 69.20. A break above 69.20 would open up chances of testing 69.40/50 on the upside. Else a rejection from 69.20 could push the pair back towards 68.80/60 levels. Preference is for the upside just now.
INTEREST RATES
Part of the US Treasury yield curve tuned negative as the 3-month yield (2.45%) trades higher than the 10Yr yield (2.44%) indicating possibly decline in the economy. If the yield rates do not recover immediately, the markets could take it as a possible signal of easing from the FED and potential recession.
The US yields look strongly bearish for the near to medium term. The 10Yr could come down towards 2.25%.
The US-JGB 10Yr (2.53%) is trading lower and could head towards 2.45% indicating further bearishness in Dollar-Yen in the coming sessions.
The German-US 10Yr (-2.45%) is trading just below resistance and while that holds, it could come off sharply back towards -2.52% indicating Euro weakness to continue.
The 10YR GOI (7.5045%) could move up towards 7.55% today.
