by Chris Becker
A generally positive day on stock markets after a solid lead from US bourses overnight, but it was action on currency markets that move things around. We had a couple of service PMIs released locally and the private Caixin prints that were to the upside, but didn’t provide much impetus. The weakening USD provided a big lift to the Aussie dollar and the other majors going into the London open.
The Shanghai Composite is up 0.2% to 3175 points, slowly melting up after confirming its previous support level at 3140 points as more Yuan tightness filters through. The Hang Seng is doing a lot better, benefiting from the Yuan shenanigans, up 1.4% and playing catch up to the mainland. ATR resistance is coming up here and momentum is just about to cross to positive, so hold on!
Stocks in Japan hit the wall as Yen appreciated strongly against USD (and is accelerating going into the London session), with the Nikkei losing 0.3% after a big move yesterday, remaining below my target of 20000 points. The USDJPY pair sold off quickly on the Tokyo open and fell striaght down to the 116 handle, which is under pressure as we speak:
S&P Futures are steady and look positive going into the London open. The trendline from yesterdays price action remains intact:
The ASX200 closed 0.3% higher, melting above 5753 points mainly pushed up by gold and oil stocks, with the former commodity price surging during the Asian session.
The Aussie dollar is also pushing higher, now through the 73 handle against USD. Note how price action on the hourly chart is climbing away from the trendline which may indicate a reversion to the mean soon:
The data calendar tonight includes European retail PMIs, UK services PMI and US initial jobless claims, with the final one of the night – ISM non-manufacturing to determine the move of USD for Friday.