by Chris Becker
The Alabama senatorial election is putting a little spice into a bland market with the USD falling slightly against the majors – Aussie dollar particularly – as the Fed begins its meeting tonight. Asian stocks were mixed across the region as commodity prices remained relatively stable.
In mainland China the Shanghai Composite has come back slightly after its near 1% drop yesterday, up 0.4% to be at 3293 points. The Hang Seng Index is doing a lot better, up 0.8% to be back above 29000 points, starting to push the high moving average on the daily chart and signalling a breakout:
S&P futures have retreated on the back of the Alabama election with some risk starting to creep in on the creepy GOP tax plan:
Japanese stocks sold off due to a much stronger Yen with the Nikkei 225 off more than 0.5% to close at 22707 points, continuing to reject overhead resistance at 23000 points. The USDJPY pair had a go at breaking through the 113 handle pushing below the low moving average on the four hourly chart at 113.20 before coming back a little. As I said yesterday there is the potential for a fuller retracement here down to 113 or 112.75 as momentum reverses course:
The ASX200 again had a big go of it at the open, but couldn’t make it stick, barely closing 0.1% higher at 6021 points. But it does mean a new daily high and the bulls are in charge here as momentum starts to pick up with the daily and weekly charts all positive.
The Aussie dollar surprised overnight by launching itself above the high moving average band on the four hourly chart, even breaching and reversing ATR resistance at the 75.70 level. This bullishness continued in the Asian session with all prices above that high moving average, which is indicative of a lot of buyers, with momentum also now positive:
The data calendar hits the mid week mark with several releases to worry about before the outcome of the Fed meeting itself, including UK and EU unemployment data and the US CPI print.