ASX Shares Daily – October 2nd

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By Chris Becker

It was the RBA’s turn in the currency wars today, with an unexpected rate cut sending Aussie stocks higher, with the ASX200 up 45 points or 1% to 4433 points, I’ll take a closer look at the bottom of the post including technical analysis of the bourse.

The rest of Asia was a bit muted with most Chinese markets closed. The Nikkei 225 had a poor day again, down another 1% and down to its lower trendline:

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No surprise then that Aussie bonds fell with yields at 2.97% but the action was in the Aussie currency – the battler (AUD/USD) wasn’t the strongest fall in the crosses (the table above is incorrect – its actually at 1.03 even). Its just on the 200 day moving average as seen on the daily chart below:

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The Euro/USD isn’t moving much – up slightly but still around 1.29 again. The bounce in the US Dollar (DXY Index) continues but slowing down as it hits the strong resistance at the 80 point key level, now at 79.1 points.

The undollar currency gold (USD)  is still doing well, but in AUD terms its accelerating again:

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Australian Stocks

As you can see in the table above, the gains were across the board with materials leading the charge. Amongst the ASX8 (the top four miners and banks), BHP-Billiton was the biggest mover, up 1.5%, but even the banks are all up 1% – here’s Westpac (WBC) looking like breaking out higher:

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Here’s the daily chart of the ASX200 where the retracement I to the uptrend looks like finishing and the ASX200 is just below 4440 – we are now in the “Jaws of Doom!” for a bull trap…but don’t fight the tape!

These daily updates need to be placed in context with the longer trends and drivers amidst the overall technical picture, where Former “Trading Week” readers will find it reborn as “Technicals“, published 8.30am each Monday morning.

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Chris Becker is an investment strategist at Macro Investor, Australia’s leading independent investment newsletter covering stocks, trades, property and fixed interest. Each week Macro Investor publishes tables on the top ten most undervalued and overvalued stocks on the ASX. A free 21-day trial is available at the site.

You can follow Chris on Twitter.

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