by Chris Becker
It was a case of Asia sweeping aside any weekend macro troubles plus the less than cheerful Friday night NFP print as both the Japanese Yen and Korean Won slipped against the USD, buoying local shares. In China, it wasn’t so sanguine with the Shanghai Composite closing down 0.5% to 3269 points as it tries and fails again to beat overhead resistance at 3300 points. The Hong Kong based Hang Seng slipped too, but not as much, down only 0.15% yet making another another new daily low as it remains stuck in a holding pattern on the daily chart:
Japanese stocks did better today as the Yen sold off against USD as the inverse correlation held true. The Nikkei closed up 0.7% but is yet to breach back above key support at 19000 points, so its not out of the woods yet. The USDJPY pair zoomed out of the gates on the Monday morning gap hearing through the 111 handle but not ATR resistance on the four hourly chart. I’m watching this zone tonight and if it holds we could get a snap rally in Nikkei tomorrow:
S&P futures are steady and remain in a holding pattern on low volume. The area to watch is the intrasession low at 2335 points:
The ASX200 also came out of the gates strong, closing up 0.8% to be above 5900 points again, at 5912 mainly due to BHP which soared nearly 5% lifting the whole bourse! Other miners did well alongside financials as the broader market really wants to hit its straps and lift up to 6000.
The Aussie dollar continues to accelerate its fall, down through the 75 handle against USD on the four hourly chart. Its currently hovering at a new weekly low and if the 75 handle breakdown holds tonight we could see a full retracement to the previous weekly low at 71.50:
The data calendar starts the week relatively slowly until later tonight a speech by Fed Chair Janet Yellen in Michigan that is expected to reinforce the Fed’s thought on raising rates so watch the Treasury market closely.