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It has been a difficult month for the emerging market currencies and especially for the Indian Rupee. Sharp depreciation of the currency and rising yields have caught the attention of the mainstream media. Tech Charts frequently updated the outlook on the rupee starting from 55 levels. While the Indian currency had a sharp depreciation, equities held well and moved in the opposite direction. India’s Sensex index is now closer to its historical high levels which is a strong multi-year resistance at 21,250 levels. This level was tested in the beginning of 2008 and 2011 and held as strong resistance. Breakout above 21,250 levels will be extremely bullish for the Indian equity market. Such breakout to historical high levels occurred in the South African All Share Index back in 2012 and resulted in a sharp multi-month rally. Due to its similarity in technical action I’m posting a chart on the South Africa All Share Index. In the following weeks we should watch 21,250 levels on the Sensex.

Japanese yen is once again weakening against major currencies. Few days back I posted the USD/JPY chart showing the range bound price action and drew attention to a possible breakout. Yesterday USD/JPY cleared the resistance at 99 levels. Similar price action could follow in EUR/JPY and CHF/JPY as they both get ready to breakout from their four-month long consolidation ranges.

EUR/JPY continues to consolidate between 132 and 130. Breakout should follow on this pair in the following days. Unlike USD/JPY and EUR/JPY, CHF/JPY has a horizontal resistance at 107.5. As we are seeing USD/JPY breaching the trend resistance at 99 levels, other yen cross rates should follow with similar price action.

This will be an important week for Crude oil. WTI crude oil continues to consolidate directly above the long-term symmetrical triangle. After its  breakout above $98 levels and $104 levels, WTI crude oil formed a bullish chart pattern as part of the continuing uptrend. Short-term bullish flag is signaling a pause before the uptrend resumes. WTI should clear $109 levels to target $110-$115 area, and as long as price remains above $104, we should expect higher prices in the short/medium-term. Failure to break above $109 levels could result in further sideways consolidation between $104 and $109.

Emerging markets are taking a hit with their bond, currency and equity markets. We are seeing clear technical damages on mainly emerging asia and the rest of the emerging markets. Two equity indices that show similarities are Thailand’s SET index and Turkey’s BIST 30 index. Both indices had strong uptrend between 2009 and 2013. They were the best performing markets. Though this might be ending soon. Both SET index and BIST 30 breached strong long-term trend supports. They are clearly below their 200 day moving averages and downward momentum is picking up over the past few days. On both indices MACD generated sell signals below 0 level. Technical outlook is negative.

What would change the outlook back to neutral/positive? Turkey’s BIST 30 index should climb back above its 200 day moving average at 95K and Thailand SET index above 1,450. Before that happens we follow these two markets with a negative outlook.