by Chris Becker
Another mixed day across Asia, with Japanese stocks still leading the charge down, with the Nikkei slumping 1.2% as Yen strengthens against USD. The USDJPY fell to the 102 handle before recovering after lunch but remains on its downtrend, which is a major headwind for the Nikkei:
Chinese stocks have the day off today due to a holiday, which is probably a good thing as the Shanghai Composite diced with terminal support, ready to breakdown.
The ASX200 have been mixed and in the red mainly today, but have started to rally going into the close, up 0.2% currently. BHP Billiton is currently up 1% and just over $20 per share, a level it has been dicing with for sometime now, being support since late August and also the intersection of its bear market rally line since April this year:
Momentum has turned negative for the Big (not owned by) Australian, and it needs to hold that level or there is daylight below.
Turning to commodities I’m still watching oil closely with the mixed DOE inventory report sending WTI crude down below $44USD per barrel and as I mentioned this morning, ready to break the two week support line. A break here and we will revisit the July low at below $40:
Meanwhile in currencies, the Aussie dollar reacted on the downside to the weak jobs data this morning, finally stabilising at 74.60 against the USD and still shuffling sideways. As risk continues to flick the sell signal, the Pacific Peso proxy will find less and less support here. I’m watching the intrasession low at 74.50 to break tonight:
Another cross to watch is AUDJPY (one I do regularly for my overseas shopping – and AUDNZD for holidays!) which has retracted almost all of its previous gains and is respecting its downtrend so far this weak. It had a big drop against Yen when the data came out this morning, a sign of things to come?
The data calendar rolls on tonight with the Swiss Central Bank meeting, with the BOE thereafter – so watch out Pound Sterling! Finally we get advanced retail sales and other industrial numbers from the US tonight which may weigh on sentiment.