Weekends and holidays are getting in the way of smooth trading with mainland Chinese markets returning while Japanese traders take the day off, to be further exacerbated by a US long weekend tonight. Both the Aussie and Kiwi dollar recovered slightly throughout the session after breaking down on Friday, while trading in offshore Yuan gapped higher on the PBOC’s first fix in a week.
The Shanghai Composite finally reopened after a week long holiday and caught up with the risk game by gapping nearly 3% lower, staying there throughout the session to close at 2739 points. The Hang Seng Index is also down, off by only 0.6% however to 26400 points, still looking quite depressed here on the daily chart. This keeps it near the previous low, so there maybe more downside potential here if the low breaks:
US markets are closed tonight with Eurostoxx futures down slightly going into tonight’s quiet-ish session. The four hourly S&P 500 chart shows the break late last week, still down at a two weekly low and somewhat oversold:
Japanese stocks were closed today with muted trading on the USDJPY pair, which floated above its trailing ATR support level at 113.50 level. The area to watch is the high moving average at the 114 handle for an upside breakout if USD firms:
The ASX200 is no longer being supported by a lower Aussie dollar, starting the week abruptly lower, falling nearly 1.4% lower to 6100 points exactly, still unable to get back above former support now resistance at the 6200 point level. The Aussie dollar has lifted only marginally here, still well below the 71 handle and slowly forming a tentatively bullish falling wedge pattern on the four hourly chart, but any upside here would be a risky and limited swing trade:
The economic calendar starts the week slowly with some lower tier German industrial production numbers tonight but that’s about it.