by Chris Becker
A lacklustre finish to the week for Asian markets as the muted overnight lead from US stocks has turned into scratch sessions across most bourses. Another lowering in the Yuan fix to a new six year level coupled with an ECB reluctant to give any guidance on its stimulus program is keeping the USD strong as well although most Asian pairs were oversold from the night before.
The Shanghai Composite is down 0.3% after the long lunch, now going into the close with the Hang Seng up the same amount slightly, both still above their 3000 and 23000 point support levels respectively for the week and not getting too excited here.
In Japan, the Nikkei is eking out a scratch session, finishing the week at 17240 points as Yen stays steady against USD. The Nikkei broke out yesterday above daily ATR resistance and is looking well overbought here, so a retracement on a poor US lead to former resistance, now support at 17000 is to be expected:
The USDJPY pair is still rising high above the 104 handle, but is pausing here, with this level corresponding with the point of control that broke earlier in the week. This pair needs to get back above 104.40 to help the Nikkei further and is overbought on the hourly chart so watch the trendline to come under stress later:
For the ASX200, it was a poor finish to the week, closing down 0.2% to 5430 points, after a big post open slump recovered during the lunch session. This was mainly due to Healthscope, which dropped nearly 20% on reports from its AGM of less than expected revenue and flat earnings growth, with the contagion spreading to other health stocks like Ramsay and even the majors like CSL and Cochlear.
Price action in the Aussie dollar is decelerating nicely to a support level of 76.30 or so on the hourly chart going into the London open. The 77 handle against USD remains very strong resistance here and bears watching tonight:
The data calendar tonight finishes the week with a report on UK public finances that may put Pound Sterling under stress, followed by Canadian CPI and then a oil rig count in the US that will put the flailing oil price under threat.
Have a good weekend!