Equities looks vulnerable for a fresh sell-off this week as the indices like Nikkei and DAX have already come-off from their key resistances while the Sensex and Nifty 50 has failed to sustain the breakout.
Dow Jones (25,106.33, -63.2, -0.25%), though seems to get fresh buyers below 25,000 at the moment, it has a key resistance around 25,300. A strong break above this resistance is needed for it to move further higher. While below 25,300 Dow is vulnerable to break below its support level of 24,880 and fall towards 24,700 and 24,680.
DAX (10,906.78, -115.24, -1.05%) has significant resistances at 11,000 and 11,100. A fall to 10,800 and 10,700 looks likely in the near term.
Nikkei (20,333.17, -418.11, -2.01%) has come-off sharply after testing its resistance level of 21,000 last week. A fall to 20,000 and 19,750 looks likely. Resistances are at 20,550 and 20,620. Japanese markets are closed today on account of a public holiday.
Shanghai (2,616.56, -1.67, -0.06%) reopened on a flat note after being closed the whole of last week for public holidays. It has resistance at 2,635. A pull-back from this resistance can drag the index lower to 2,600 and 2,570 in the coming sessions.
Sensex (36,546.48, -424.61, -1.15%) and the Nifty 50 (10,943.60, -125.80, -1.14%) have tumbled on Friday. They have failed to get fresh follow through buyers after breaching their key resistances on Wednesday last week. Sensex has resistance in between 36,850 and 36,900. While below this resistance, it can fall to 36,280. Nifty 50 can fall to 10,850 while it remains below its resistance level of 10,985.
Gold and Silver have bounced from their key supports. They can remain range bound in the near-term with the overall bias continuing to be positive. Copper has seen an interim pause in its upmove and can correct slightly before resuming its uptrend. Oil remains negative in the near term.
Gold (1314) has supports in between 1312 and 1310. While above these supports, an upmove to 1320 and 1325 is possible in the coming days.
Silver (15.82) is holding well above its support level of 15.60. It can remain range bound between 15.6 and 16.2 for some time before we see a fresh rally to 16.8 and 17.
Copper (2.79) has come-off after facing resistance around 2.85. A corrective dip to 2.78 and 2.76 is possible before the uptrend resumes targeting 2.87.
WTI (51.95) has tumbled over 5 per cent last week. A further fall to 51 and 50 looks possible in the near term.
Brent (61.45) seems to be not gaining strength to breach 63. It looks vulnerable for a fall to 60 on a break below the immediate support level of 61.
Dollar Index (96.64) is stable just now but has scope of testing 97 on the upside which is an immediate resistance on the daily candles. While 97 holds, a rejection to 96.50-96.25 could be possible in the medium term.
As Dollar-Index heads towards 97, Euro (1.1326) could test 1.1300 on the downside before bouncing back sharply from there back to 1.14-1.15 levels.
Euro-Yen (124.45) is trading near immediate support on the daily candles and we could see a bounce to 126 in the near term. Immediate view is bullish while support near 124.40 holds. At the same time watch fall in German-JGB 10Yr as it looks bearish for the near term. Continued fall in the yield differential could pull down Euro-Yen to levels below 124.40-124.00 in the near term. (Refer Interest Rates section below)
Dollar Yen (109.88) might test 109 on the downside before bouncing back towards 110.50. On the weekly charts, 108-109 is a crucial support zone and while that holds could indicate long term bullishness for Dollar-Yen.
Pound (1.2932) has been coming off from 3-day candle resistance near 1.32. Immediate support is seen near 1.28-1.29 levels which if holds could lead to a small bounce back towards 1.31-1.32 levels in the near term.
Aussie (0.7099) could take some support at 0.7050 and bounce back a bit towards 0.7150. Failure to sustain above 0.7050 could take it higher towards 0.7250-0.7300 in the near to medium term.
USDCNY (6.7739) opened with a sharp rise after a week-long holiday. A test of 6.8 on the upside is possible before a pause is seen.
Dollar Rupee (71.31) could come off towards 71.10-71.00 again while below 71.40. Immediate view is bearish for Dollar-Rupee.
The US yields have been falling breaking below immediate supports and look bearish for the near term. The 5YR (2.44%), 10YR (2.63%) and 30Yr (2.98%) are down from 2.46%, 2.65% and 2.99% respectively. Near term looks bearish as the 5Yr, 10YR and the 30Yr yields could come off towards 2.40%, 2.58% and 2.95% respectively.
The German-JGB 10Yr differential (0.12%) has fallen sharply breaking below the immediate support level and while the differential moves lower, it could possibly pull down Euro-Yen to levels below 124.40-124.00 in the near term.
The Indian 10YR GOI (7.5243%) rose slightly on Friday. We could possibly see a fall back towards 7.48% while the upside could be limited to 7.55/56% just now.