STOCKS
Dow (24964.75,-1.01%) fell slightly yesterday. The 21-day MA on the daily line charts seems to be acting as a near term resistance and while that holds, Dow could possibly test lower levels of 24500 24000 in the coming sessions.
Dax (12487.90, +0.83%) continues to trade below 12600. While below 12600,near term looks bearish. As mentioned yesterday, trade within 12600-12300 levels looks possible.
Nikkei (22064.55, +0.64%) is almost stable and seems to have paused near current levels. A break above 22200-22400, if seen could be crucial as that could indicate some near to medium term upmove towards 22800. But there could be some chances that the index remains stable near current levels before coming off towards 21400 or lower. That if seen could lead to some weakness in Dollar Yen as well.
Nifty (10360.40, -017%) has immediate support at current levels and if that manages to hold, we could see a bounce back towards 10500 or higher in the coming sessions. Else a break below current support could turn bearish for the index for the coming weeks.
Sensex (33703.59, -0.21%) on the other hand closed below the immediate support on the daily candles and can test levels of 33250-33000 on Sensex and 10200-10080 on Nifty.
COMMODITIES
63 on the WTI (61.31) seem to be an important resistance that is likely to hold in the near term. While below 63, the price may trade lower and again head towards 60.
Brent (64.86) also could come off to re-test 63 while below 66. Near term look bearish.
Gold (1326.70) has fallen sharply from levels near 1360. While the immediate resistance near 1360-1370 holds, it would be difficult to move up towards 1380-1400 levels in the near term. A re-test of 1300 looks possible with another attempt back towards 1360/70 in the sessions to come.
Copper (3.1855) is down sharply and could come off towards 3.15-3.07 in the coming sessions.
FOREX
As mentioned yesterday as well, the Dollar Index (89.78) is bouncing from support on daily candles near 88.5 towards important resistance just above 90 on the daily and weekly candles. As US bond yields touch new record highs (see Interest Rates below), we could see the Dollar Index touch 90.00-90.25 by Friday.
As per expectations, Euro (1.2338) tested 1.235 and is now trading at levels near 1.234. There is support on daily and weekly candles in the 1.2275-1.2315 range, which should be tested this week.
After seeing a low of 105.55 (support on daily candles) last Friday, Dollar-Yen (107.76) has bounced rapidly and is now targeting resistance near 108 on the daily candles this week itself. There could be crucial higher resistance near 109.00-109.25 on the weekly line chart, which could keep the upside restricted in the next week.
The Euro-Yen (132.96) is once again seeing a bounce from crucial support near 132 on the 3 day candles. Yesterday, we had spoken about the possibility of Euro Yen breaking below 132 this week if the Dollar Yen stays below 107.5 and the Euro touches 1.23. However, with a rise towards 108 and a dip towards 1.23 looking likely, we could expect Euro Yen to hover around levels near 132.8-133.0 this week.
Pound (1.3991) is pausing in its forecasted dip towards immediate support near 1.39 on the daily candles. Yesterday’s prediction of a test of lower support near 1.38 on daily and 3 day candles would have to be postponed for next week.
Dollar-Rupee (64.7950): With yesterday’s rise past 64.70 the long-term trend could be turning to the upside. Within that, there are chances of a near-term correction down to 64.55-50. If that does not happen, we may see 65.20 immediately.
INTEREST RATES
US 10 Year Yield (2.8969), US 30 year Yield (3.1588), US 5 year yield (2.6566), US 2 year yield (2.262) : Yesterday’s auction of US 2 Year notes fetched yield rates near 2.255%, which was a reflection of overall bearish sentiments on bond prices (largely driven by high inflation expectations). There is further auctioning slated in this week for the 5 year notes, which might just lead to a rise in the 5 year yield from the current 2.65%. We could expect a sustained elevation of both 2 year and 5 year yields to also pull up the longer term yields above their long term resistance levels. However, there is also a strong possibility of high yield levels attracting investors towards US debt and thereby pushing down yields from current levels. It will be interesting to see how yields behave in the next week.
For the moment, we retain our preference for a dip in the 2 year yield over the next week below 2.2%. (Long term resistance levels for the 4 yields earlier mentioned are as follows: 2.85-2.90, 3.20, 2.7 and 2.2 respectively – we have been expecting these levels to hold in this month.)
 has fallen sharply from levels near 1360. While the immediate resistance near 1360-1370 holds, it would be difficult to move up towards 1380-1400 levels in the near term. A re-test of 1300 looks possible with another attempt back towards 1360/70 in the sessions to come. ){kind=link}