STOCKS
Renewed concerns on the US-China trade war has taken some profits off the table from the US equities. A downward revision in growth from the Bank of England and the European Union have triggered a sharp fall in the Euro region. The Asians are felling the pressure from the overnight sell-off in the global markets.
Dow Jones (25,169.53, -220.77, -0.87%) can test its supports at 25,000 and 24,970. Whether Dow manages to bounce from these supports or not will decide the next move. A strong break below 24,970 will negate the bullish outlook and will drag the index to 24,850 and 24,770.
DAX (11,022.02, -302.7, -2.67%) has tumbled and is hovering above a crucial support level of 11,000. A strong break below this support can drag the index lower to 10,900 and 10,800.
Nikkei (20,467.94, -283.34, -1.37%) has fallen as expected and has broken below 20,500. A test of 20,400 and 20,350 is likely in the near term
The Indian benchmark indices seems to be not cheering the 25 basis point rate cut from the Reserve Bank of India yesterday. The Sensex (36,971.09, -4.14, -0.01%) and the Nifty 50 (11,069.40, 6.95, 0.06%) has come-off from the day’s high to close on a flat note. Though the Sensex and Nifty has a near-term support at 36,750 and 11,050 respectively, they look vulnerable to break it on the back of the weakness in global equities. Sensex can test 36,500 and the Nifty can fall to 10,980 on a break below their respective near-term supports.
COMMODITIES
Gold and silver are getting safe haven support from the US-China trade spat and can consolidate in the near-term before we see a fresh rally. Copper is retaining its strength. Concerns on the slow-down in the global growth slow-down and demand keeps the oil prices presssured for fall in the near term.
Gold (1310) fell as expected to test 1303 and has bounce thereafter. The overall bullish bias remain intact. Gold could broadly remain range bound between 1290 and 1325 before we see a fresh rally towards 1350-1360.
Silver (15.70) is managing to hold above its support at 15.60 and can trade in a sideways range between 15.6 and 16.2 in the coming days.
Copper (2.83) continues to remain bullish. A test of 2.87 looks likely on a break above 2.85.
Brent (61.65) is struggling to breach 63 over the last few days. This leaves the near-term bias negative for a fall to 60.
WTI (52.6) fell sharply from around 54 to test 52 yesterday before bouncing to the current levels. Cluster of resistances are poised in between 53.3 and 53.8. While these resistances hold, a break and fall below 52 targeting 51 is possible.
FOREX
Dollar Index (96.59) has risen well but could possibly pause near immediate resistance at 97. Although there is scope of testing 98 on the upside in the medium term, a small dip from current levels or from 97 could be possible before the index tests 98 on the upside.
Euro (1.1338) is heading towards immediate trend support at 1.13 from where a bounce could be seen back towards 1.14/15 levels. Broad range of 1.16-1.13 continues to remain for now.
Euro-Yen (124.44) has come off as expected and could see a bounce from anywhere within 124.40-123.60 region. On a medium term, 126 is a crucial resistance and while that holds, it could gradually push Euro-Yen further down below 123.60. For now we could see an immediate bounce from levels above 123.60.
Dollar Yen (109.78) could see some stable and ranged movement within 110.5-109.5 region. While resistance at 110.5 holds, Dollar-Yen looks bearish and could fall towards 109.
Pound (1.2947) bounced back from 1.2850 and could rise in the near term while that holds. Some range trade within 1.2850-1.30 is possible today.
Aussie (0.7074) is headed towards 0.70. A fall below 0.70 could take it down further towards 0.6970 before we see a bounce from there. While Copper looks bullish, it is more likely that Aussie could bounce from 0.70 itself.
Dollar Rupee (71.46) came off sharply to test 71.30 before closing at 71.46 after the RBI cut rate by 25bps. While the Indian equities are strong and fall in Crude prices are expected, we could possibly see some more of Rupee strength in the near term. Upside resistance near 71.60/80 continues to hold for now.
INTEREST RATES
The US yields are trading low. The 5YR (2.46%), 10YR (2.65%) and the 30Yr (2.99%) are down from 2.50%, 2.69% and 3.03% respectively. Near term looks bearish for the US yields as we could see some more fall in the early sessions next week.
The UK yields are trading low but face immediate support near current levels. The 5Yr, 10Yr and 20Yr are trading at 0.8270%, 1.0640% and 1.62%, down from 0.8540%, 1.1020% and 1.6430% respectively. We may soon see a bounce back to higher levels.
The Indian 10YR GOI (7.50%) came off sharply after the RBI policy statement where the repo rate was cut by 25bps. The yield, if remains below 7.50% could come down to test 7.45-7.43% in the near term. Else an immediate bounce towards 7.55% is possible before coming off to levels below 7.50%.
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