In response to the surge on Wall Street overnight, Asian share markets have the main echoed the returns with mainland Chinese stocks the only fly in the ointment. The local GDP print saw Aussie stocks taper off throughout the session, while the Australian dollar remains stubbornly below the 70 handle.
The Shanghai Composite remains unable to get back above the critical 2900 point support level, putting in a scratch session, while the Hang Seng Index closed only 0.3% higher to 26832 points, finally able to arrest the recent declinew. The daily chart had been showing a deceleration pattern with a target at the 27000 point level but sentiment is not yet positive enough to get back over that level:
S&P and Eurostoxx futures are flat going into the European session with the four hourly chart of the S&P500 chart showing last night’s surge that got back above previous key terminal support at 2800 points. Unless price can make further gains above this level, the market continues to signal a major correction as the completion of a very bearish head and shoulders pattern on the longer term charts:
Japanese share markets did the best again, despite a stronger Yen, with the Nikkei 225 punching nearly 2% higher to finish at 20776 points, bouncing off the key terminal and psychological support level at 20000. There might yet be a bottom in the USJDPY pair as no new session lows – but a series of lower highs – as it remains just above the 108 handle during today’s session:
Australian stocks gapped higher in response to the overnight action on Wall Street but was unable to hang on to all the gains with the ASX200 eventually only closing 0.4% higher to 6358 points, still below previous support at 6400 points. The Australian dollar wants to push through the 70 handle but has stalled again going into the London session where momentum remains overbought and the four hourly chart is forming a nice bearish rising wedge pattern:
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