by Chris Becker
A generally positive day on risk markets in Asia with most stock markets up as the USD continued to weaken and oil prices continued to climb. Gold rose alongside the other undollar, with other commodities like iron ore and coal also putting in weak but steady gains.
In China the Shanghai Composite rallied going into the close, 0.4% higher to 3101 points, finally cracking back above the previous critical support level at 3100 that could yet prove heady resistance. In Hong Kong the Hang Seng Index has slipped 0.2%, unable to make another new daily high with my expectations of a retracement beginning here:
Japanese stocks were looking to put in a negative session, slipping as the Yen firmed against a weak USD but have recovered with the Nikkei closing 0.2% higher, still just below the elusive 20,000 point level. The USDJPY pair is slowly retracing to ATR support at the 113 handle on the weaker USD. This is a crucial level to hold as the four hourly charts show:
S&P futures are slowly building on the higher oil price, waving aside yet more domestic political drama:
The ASX200 has put in a mild positive session, buoyed by iron ore stocks, closing 0.2% higher to 5850 points, the level that I’m closely watching for signs of a breakdown. Fortescue climbed 2% while BHP and Rio both put on 1% or so, as financials stocks really did the heavy lifting.
The Aussie dollar is remaining above the 74 handle against USD after getting a little too excited overnight. The trendline on the four hourly chart is intact for now, but for this to hold we need an overnight session that finishes above ATR resistance here:
The data calendar is fairly busy with U.K. inflation data, Germany’s ZEW confidence gauge and gross domestic product figures for the euro area. In the US, its industrial production and housing starts and for the oil traders, watch out for IEA estimates of April OPEC production.