STOCKS
Concerns of the global economic slowdown and fresh fears of a recession are weighing more on the equities. Though an intermediate bounce cannot be ruled out, the global indices continue to remain negative and can fall further in the near term.
Dow (25516.83 +14.51, +0.06%) oscillated around 25500 yesterday and has closed on a mixed note. The outlook remains bearish for a fall to 25200-25180 while it trades below 25650.
DAX (11346.65, -17.52, -0.15%) might seen an intermediate bounce to 11400-11500 while it sustains above 11300. But the short-term outlook remains negative for the index to test 11200.
Nikkei (21342.48, +365.37, +1.74%) has been making some wild swings with a wide gap-down open yesterday followed by a sharp gap-up open today. Though a test of 21500 is possible while it trades above 21235, we will have to wait and see for a few sessions to get a clear idea on the next leg of move.
Shanghai (3045.41, +2.38, +0.08%) has bounced after testing the 21-day moving average support at 3033 today. While above 3033, a bounce to test 3100 is possible in the near term. But a break below 3033 can drag it to 3000 and 2950 in the coming days.
Sensex (37808.91, -355.70, -0.93%) and Nifty 50 (11354.25, -102.65, -0.90%) opened with a wide gap-down and fell sharply as expected. The short-term bearish outlook is intact. Nifty can fall to 11230 in the coming days while it trades below 11400. Sensex has resistance at 38000. It can test 37230 and 37000 on a break below 37680.
COMMODITIES
Gold and Silver have risen and remains bullish in the near term. Copper has bounced but can fall further before reversing decisively higher. Oil continues to consolidate with a bullish bias.
Gold (1321) has risen towards 1320 as expected and keeps the near-term bullish outlook intact for a test of 1330.
The support at 15.35 has held very well for Silver (15.55) and it has bounced sharply from there yesterday. The next resistance is at 15.65, a break above which will pave way for a rise to 16.
Copper (2.85) has bounced yesterday. The support at 2.84 is holding as of now. But the immediate resistance at 2.86 has to be breached for it to move further higher towards 2.88 and 2.89. A pull-back from current levels will keep copper vulnerable to test 2.82-2.81 in the coming days.
WTI (59.25) has bounced around 58 thereby keeping the 58-60 sideways range intact. As long as WTI sustains above 58, a strong break above 60 and a rally to 61.5-62 cannot be ruled out in the coming days.
Brent (67.4) is holding above 66 and is likely to revisit 68.30-68.50 levels in the coming sessions. The bias remains positive for it to breach 68.5 decisively and move up to 70.
FOREX
Currencies are mixed. Overall Dollar looks bullish for the near term. EM currencies could either trade sideways or consolidate a bit.
Dollar-Index (96.52) has interim near term resistance at 96.75 which if holds could push it down to 96.0-95.75 in the near term; else a rise towards 97.50/75 may continue for the coming sessions.
Euro (1.1315) could see some interim corrective bounces but overall while below 1.1450, Euro looks bearish towards 1.12-1.11 in the medium term.
Euro-Yen (124.58) has bounced from 123.60, but could fall back again towards 123.60 or lower in the near term unless it breaks above 125.20 immediately. On the upside there is scope for a rise towards 126.80.
Dollar Yen (110.06) has bounced a bit from levels above 109.50. A break above 110.50 could pull it higher towards 112.50 else we could see another fall back towards 109.
Aussie (0.7120) has resistance at 0.7150 and while that holds, Aussie looks bearish and could fall targeting 0.70.
Pound (1.3193) is almost stable just now, trading within the middle of the 1.31-1.34 region. An initial dip to 1.31 is possible followed by a rise back towards 1.34.
USDCNY (6.7057) has come down from near term resistance at 6.73/74 levels and could dip towards 6.68.
Dollar-Rupee (68.94) is holding below 69.20/25 and could trade within 68.60/80-69.25 just now. Only on a break above 69.25, we would consider a test of 69.50.
INTEREST RATES
The US yields look bearish for the near term and having broken immediate support levels, the yield could head lower in the coming sessions. The 2YR (2.27%), 5YR (2.21%), 10YR (2.43%) and the 30Yr (2.88%) are trading lower and look bearish.
The US-JGB 10Yr (2.51%) is down 2bps and could fall further towards 2.45%.
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 (7.4711%) may rise while above 7.45%. Break below 7.45% opens downside chances of 7.35/30%.
