[Premium] Three Charts For The Week Ahead

Last week we focused on S&P 500, Nifty Auto/Nifty 100 & Nifty Private Bank/Nifty PSU Bank.

Let's move into this week's topics. We have big important breakouts to track this week.

1. The first chart we're looking at is the US Dollar Index. The Dollar index has been at the center of all discussions because it assumes that kinda importance. Over the last couple of weeks, we've seen the Dollar halt at a completely logical level. When you draw the Fibonacci extension from the highs of 2000 to the low of 2008, the price halt comes at the 61.8% retracement point. The price has been testing these levels since 2017. Now the more times a level is tested, the more likely it is to be breached.

But as the dollar move halted, stocks heaved a sigh of relief whereby we saw the markets recover slightly. We are well aware of the negative correlation between the US Dollar and the stock market. Hence, if the stocks have to move higher, the Dollar Index has to consolidate/correct.

How the price reacts at these levels going forward, would determine where the near-term trend is headed.

Click on the chart to zoom in.

2. The second chart we're looking at is India's 10-year Government Bond Yield. We now have 3-year highs in the bond yield as the yield hit 7.50%. With these new highs, the Indian bond yields are catching a bid and moving higher across the board. Now we know that the market reacts abruptly only to a swift movement in the yields. So it is the rate at which the bond yields are moving, rather than the absolute movement.

What will be in focus now is the rate at which the bond yields continue to rise. The next level to track would be 7.66%. That's where the resistance is placed. However, a rise in bond yields will continue to put pressure on the growth areas of the market.

3. The third chart we're looking at is the AUD/JPY currency pair. This is one of our most frequently tracked risk-on sentiment indicators. In the current market environment, Aussie Yen has been surprisingly strong as the market mess continues to engulf global markets. The fact that the price is holding up well is a positive that we're keeping in mind.

95.80 is the level we're tracking with respect to the resistance level.

In our view, these charts will help set the tone for this week and provide us with information on how we should approach the market in the coming weeks.

Also, make sure to check out our other weekly post, "Trade Of The Week."

Thanks for reading and please let us know if you have any questions.

Allstarcharts Team