STOCKS
Dow (25029.20, -1.50%) has fallen exactly as expected and a fall below 25000 could open up further chances of testing lower levels of 24800-24500 in the medium term.
Dax (12435.85, -0.44%) is likely to trade within 12400-12600 for the week. Only a break on either side could give an indication of further directional movement for the medium term.
Nikkei (21714.97, -1.60%) has also fallen as expected. While the index trades below 22000, it may continue to move down towards 21500-21250 in the near term.
Shanghai (3268.64, +0.38%) has bounced up a little but is overall stable within the 3250-3350 region. It is likely to remain stable today also without any major movement.
Nifty (10492.85, -0.58%) and Sensex (34184.04, -0.47%) have dipped yesterday. There is lack of an upside momentum just now as the indices are unable to move up sharply. Nifty may re-test support near 10380 while Sensex could test 34000. If the indices are unable to move up immediately, they could be vulnerable to further downside soon.
COMMODITIES
Brent (66.3) and WTI (61.70) are both down sharply. 64 and 60 could hold just now for Brent and WTI pushing back the prices a bit in the coming sessions.
Gold (1317.43) is almost stable near current levels. A test of 1315-1310 is possible on the downside before the price again moves up towards 1340.
Copper (3.1385) has broken below our expected 3.15 and could now test lower levels of 3.10-3.07 in the near term. View is bearish.
FOREX
The Dollar Index (90.712), contrary to expectation has breached resistance near 90.5 on the weekly candles and might now attempt a test of 2 stronger resistances at 91 (3 day line chart and weekly line chart) and at 91.5 (weekly candle chart), which should subsequently produce a dip for the index.
The Euro (1.219) has dipped below 1.22 and is now headed towards crucial support near 1.215 (as seen on daily line chart, 3 day candles and also on 3 day line chart – the support on 3 day line chart had yesterday been mentioned as 1.22 which is revised to approx 1.215). We believe that this support could again lead to a bounce towards 1.25-1.26 in the coming week.
Dollar-Yen (106.74) is close to support near 106.5 on 3 day and weekly line charts. A break of these levels might confirm the possibility for long term bearishness in Dollar Yen.
The Euro-Yen (130.14), has broken support near 131 on the daily candles. If the Dollar Yen respects support near 106.5 while the Euro moves towards 1.25-1.26 next week, we could see a rise in the Euro Yen beyond 131. However, if either the Dollar Yen or the Euro breaks supports near 106.5 or 1.215 respectively, we might see Euro Yen move lower towards 128-129 next week.
Pound (1.375) as per expectation tested lower support near 1.38 on daily and 3 day candles but instead of bouncing has dropped below the support. In case of further bearishness, it could target 1.36 which is seen as crucial support on daily, 3 day and weekly line charts – which should henceforth produce a bounce for the Pound.
Dollar-Rupee (65.175): Upmove can extend up to 65.50-60-70 as well, while market remains above 65.00. Will become highly Overbought at those levels.
INTEREST RATES
US 10 Year Yield (2.86), US 30 year Yield (3.1275), US 5 year yield (2.64), US 2 year yield (2.258) : The 10 Yr yield has dipped below trend line support (near 2.88%) in the channel (formed on the short term chart). The 30 Yr yield has also dipped below support (near 3.13%-3.14%) as seen on short term chart. A further dip in both yields might imply that long term resistances will continue to hold for the coming week. This dip might have been a result of the data release yesterday showing a dip in US GDP growth as compared to the previous quarter.
(Long term resistance levels for the 4 yields have been as follows: 2.85-2.90, 3.20, 2.7 and 2.2 respectively – a decisive breach of these levels could happen sometime in March.)
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