by Chris Becker
A good day to go fishing for stock traders in Asia, as Japanese stocks were closed for a holiday and the ASX opening late and then shutting down early before a small amount of trading in the afternoon session. The usual Monday gap prevailed across stocks and currencies with the USD retreating from its big gains on Friday night on the back of the stronger than expected CPI print.
Chinese stocks have returned from their own holiday, with the Shanghai Composite poised on terminal support at 3000 points beforehand, now up 0.5% to 3020 points and holding on going into the close. The Hang Seng is doing even better, up 1% and almost making a new 5-day high, so things are looking up.
SPX futures are pointing to a recovery in US stocks overnight, and I’m watching the four hourly chart for signs of an upside breakout in the cash session later:
The ASX200 has stopped trading at about 3.30pm today, after delaying the open and foibles throughout the brief session. Well done ASX – this seems to be a pattern. For what it’s worth, the market closed down about 0.1% to 5295 points and traders are hoping for no stuff ups tomorrow if tonight’s European/US sessions are bullish!
Turning to commodities, gold is moving higher on the back of USD’s retreat, up nearly $8USD per ounce in Asian trade and looking like putting in a bottom after being oversold on Friday. There’s key resistance to overcome at $1317-1320 area though:
With silver showing where the real resistance (and performance) is, with ATR resistance and price at around the $19.25 level the area to watch:
Meanwhile in currencies, the Aussie dollar is going great guns rebounding over 60 pips to 75.40 before the London session and brushing aside its daily downtrend line (the black line on the hourly chart below). I think this is too much, too soon and we’ll see a retracement back to 75.25 or so before a potential restart higher, if the USD bulls retreat later:
The data calendar is very quiet in Europe and the US tonight, with some very low level releases, the only highlight being US house prices with the NAHB House Price Index.