by Chris Becker
Asian stock markets set aside the pessimism overnight with green across the board as mainland Chinese stocks traded after a holiday yesterday. In currency land, all eyes were on the Australian dollar as the RBA held its monthly meeting, but it was a waste of time and energy as the mandarins at Martin Place twiddled their fingers.
First to stocks, where the Shanghai Composite is trading higher going into the close, up 0.2% and remaining just above terminal support at 3000 points. The Hong Kong Hang Seng is treading water while in Japan, the Nikkei closed up 0.7% to just over 16,700 points remaining just above support as the Yen weakened appreciably against USD:
USDJPY broke out above its downtrend line, hitting the 102 handle for the first time in two weeks in a move that could have legs up to local resistance at the 103 area.
As for the ASX200, it wobbled at the open, down half a percent, then recovered in anticipation of an easing bias from the RBA, but none eventuated, so it settled for a scratch session. Again, its the financials index – the XXJ – to watch , up slightly for the day and still heading to a possible breakout here, which will lift the entire bourse up and over 5500 points very quickly (the green line is the German DAX):
In other currencies, the Aussie dollar swallowed the RBA swill in its stride, as sell orders above the 77 handle continue to keep the lid on its meltup:
In commodities I’m watching for a potential bounce in gold tonight, as the cycle of bearishness reaches a new high. There’s a bullish falling wedge pattern forming on the hourly chart, and combined with oversold momentum could presage a rally in the precious metal – I’m watching trailing ATR resistance at the $1315USD ounce level here:
Meanwhile, the opposite can be said for oil, with a bearish rising wedge pattern on the four hourly as momentum wanes and resistance is strong at the $49USD per barrel level – watch for a swift reversal here:
The data calendar tonight is bare, nothing of real note to watch in both sessions, so stay tuned for catalysts tomorrow during the Asian session.