by Chris Becker
A bit of sabre rattling in Asia as the North Korean hermits launch a brace of missiles into the sea, prompting a run to safety to Yen and forcing Japanese stocks down.
The Shanghai Composite is starting the week a bit stronger after its poor showing last week, currently up 0.25% to 3226 points, remaining just above local support at 3200. The Hang Seng Index is doing a little better, up 0.3% to 23624, still below the 24000 points resistance level. Price must hang on here and above daily ATR support at 23500 points proper after the daily downtrend was broken last week:
Japanese traders did not like the North Korean risk and bid up the Yen on the safe haven, pushing local stocks lower. The Nikkei closed down 0.4% to finish at 19,397 points. The hourly chart for USDJPY shows the reversal early in the session to below the 114 handle with a very minute recovery as we head into the London open. Support on the four hourly and daily ATR level at 113.60 is crucial here:
S&P futures have also fallen further in Asia suggesting a slip on the open tonight:
The ASX200 brushed aside the geo-political mess and had a positive start to the week, finishing up 0.3% for the day in a later surge. Banks were somewhat mixed, it was resources stocks that rallied with Fortescue up 3% and RIO putting on nearly 2% but the market is still unable to get back to the 5800 point resistance zone.
The Aussie dollar wanted to follow through on the late Friday night session surge but had no chance, slipping back down to the 75.70 area where its sitting patiently going into the London open. Overall the Peso is slightly overdone on the sell side so a small uptick here to the 76 handle would not be out of the question:
The data calendar starts the week slowly with US factory orders the only release of note overnight. Its the RBA’s turn tomorrow!