by Chris Becker
Asia has a wet lettuce finish to the week with most stock markets finishing in the red as the USD continued its decline from overnight, except against Euro as the ECB meeting failed to ignite animal spirits. Going into the Christmas break there is tension amid risk markets that have had a stellar year so far but the apple cart is being upset by monetary policy action as usual.
In mainland China the Shanghai Composite has fallen nearly 1% to be at 3280 points going into the close, building on yesterday’s losses. The Hang Seng Index is off even more, down 1.1%, retreating below 29000 points and confirming the previous false daily breakout:
S&P futures are relatively stable here, coming back slightly from last night’s slump, but the focus will again be political surrounding the possibility of the GOP tax cut bill getting passed:
Japanese stocks sold off sharply intrasession, but have recovered somewhat with the Nikkei 225 putting in a scratch session with a minor loss, continuing to reject overhead resistance at 23000 points. The USDJPY pair was relatively stable, unable to make new lows after the previous breakdown below the 113 handle. Price is sticking to the lower bound of the weekly uptrend line (thin black line) at the 112 handle, but USD is looking weak here:
AS expected, the ASX200 has been unable to stay above 6000 points for the week, closing down 14 points or 0.2% to 5997 points. Again, the market is exposed to overseas risk moves so I would not expect another move higher soon until US stocks regain momentum.
The Aussie dollar remains high and stable here at the 76.70 level against USD, showing a lot of internal strength and an obvious breakout point to engage. Momentum is way overdone on the lower timeframes, but the daily chart is firming:
The data calendar finishes the week with the Russian central bank meeting, US industrial production for November and a private oil rig count.
Have a good weekend, safe trading, I’m off to watch The Last Jedi with a few friends…
