A lack of a weaker fix on the Chinese Yuan by the PBOC is possibly behind the decline in USD today, helping equities across the board – save for the ASX200 – as Chinese stocks rally. The USD is facing pressure against the Aussie and Yen while the oversold Euro has bounced back in anticipation of tonight’s trading session.
The Shanghai Composite has finally reversed after being in near freefall recently, surging over 2% going into the close, currently at 2772 points. The Hang Seng Index is looking better too, lifting 1.4% higher to 287221 points, coming back above previous terminal support at 28000 points. Last week’s ominous breakdown on the daily chart still remains in play so this is could be just a false breakdown:
S&P futures are up alongside Eurostoxx which are upbeat going into London open, up about 0.2% or so. There’s daylight above to the 2880 level here:
Japanese stocks moved higher even with a stronger Yen as a headwing with the Nikkei 225 closing 0.6% higher at 22662 points, still vainly trying to get out of its sideways move on the daily chart. The USDJPY pair remains stuck within the bounds of a descending triangle on the four hourly chart, bordered by trailing ATR support at just above the 111 handle. A failure to make a new high is telling and bears watching tonight:
The ASX200 was the odd one out, not helped by the RBA non-decision, falling 0.3% to close at 6253 points, unable to breach overhead resistance at 6300. The Aussie dollar was looking equally depressed going into the meeting and for at least a half hour later failed to go anywhere, pushed below the 74 handle. But in line with Chinese stocks its taken off in the latter half of the session, breaking through trailing ATR resistance and making a new high. Interesting – but does it have legs back to last week’s high at 74.50?
The economic calendar remains relatively quiet, with German industrial production figures for July the only highlight.