STOCKS
Overall the stock indices are all in a corrective mode and could possibly take some time to recover. We need to see if the supports near current levels hold for Dax, Nikkei and Nifty.
Dow (21844.01, -0.93%) fell sharply from levels near 20000. The index could possibly test 21750/00 over the next couple of sessions before again rising back towards 22000.
Dax (12014.30, -1.15%) seems to be trading near interim support and could bounce back in the next few sessions.
Shanghai (3230.61, -0.95%) is expected to maintain the sideways movement for a few more sessions before trying to rise higher. For now, trade within the 3220-3300 region looks likely.
Nikkei (19729.74, -0.05%) is also testing immediate support on the 3-day candle charts. While that holds, there is some scope of bouncing back towards 20200; else a fall towards 19400 and lower could be seen within the next 1-2 weeks.
Nifty (9820.25, -0.89%) has tested an important medium term support near 9775 yesterday and if it fails to remain above 9775 it could be indicative of a sharp fall in the coming sessions towards levels near 9600-9400. Only if it sustains above 9775, we may expect a retest of levels near 10000 in the near term.
COMMODITIES
Gold (1291) has risen in line with our expectations and broke above the immediate resistance of 1285 thus it might continue the rally towards 1300-1315. Failure to rise above 1300 may push it back to1280 and 1267 respectively. We will remain bullish on Gold while it is trading above 1260-65 regions.
Silver (17.06) is trading above the higher end of the previous range of 16.00-17.00. Immediately resistance is at 17.22 levels, where we might see some weekly profit taking.
Copper (2.88) has been taking pause for the last 2 sessions but the trend remains firmly up and the target of 3.00 and the support of 3.12 remain unchanged. Only a close below 2.78 levels could negate the short term bullish view.
Brent (51.70) and WTI (48.22) had moved lower in line with our expectations. Brent needs a break above the immediate resistance of 53.00 and WTI, above 50.50 to extend their respective rally to 56 and 54. Othwise we might see consolidation at 50/brent and 46.50/WTI levels to gather fresh buying momentum.
FOREX
Dollar Index (93.33) is trading within a narrow range between 93-94.10 and a weekly close above 94.10 could open up 95 and 96.30 levels as well. Although the larger trend is still down but we have to a little cautious beyond 94.10 region to identify the possibility of a change in trend in short term time frame.
Euro (1.1762) is still continuing its corrective behavior and a upside possibilities can be considered only on a break above 1.1800-25 regions. Till then, the downside risk for 1.1650-00 remains greater.
Dollar Yen (108.92) has broken below our important support levels near 109.50. There are chances of seeing fresh fall towards 108.10 in the next few sessions. Near term looks bearish.
Pound (1.2983) has come off a bit. 1.3050 is an important levels to watch for and while the price remains below 1.3050, we will have to allow for a fall towards 1.2930 or even 1.2850 in the coming sessions.
Aussie (0.7849) is headed towards 0.7835 which is an immediate interim support. On a break below 0.7835, we my have to consider a fall towards 0.7760 in the coming sessions.
Dollar Rupee (64.08) closed just below our initial target of 64.10/12 yesterday but on the offshore market the currency pair is trading near 64.25 that we had been looking for on a break above 64.12. Dollar rupee could open higher on the Official market but we will have to keep an eye on whether it breaks above 64.25/27 or not. A break above 64.27 could open up fresh rise on the upside.
INTEREST RATES
The US yields have fallen. The 10YR (2.21%) is down from 2.24% seen yesterday and we could see the current fall to continue towards 2.20-2.18% in the near term.
The US-Japan 10Yr (2.15%) is testing important near term support at current levels and could possibly bounce back in the next couple of sessions taking up Dollar Yen with itself. In that case some recovery is possibly in Nikkei too. Else, a break below 2.15% on the yield spread could indicate a fresh fall coming up.
The German-US 10Yr (-1.80%) has bounced back sharply and if it continues to rise towards -1.75% as expected, Euro strength could be expected in the coming sessions.
