See the latest Australian dollar analysis here:
Asian share markets are again mixed despite a positive mood on Wall Street overnight with only local stocks on the ASX200 lifting today. Concern over the US/Mexico trade spat and more Federal Reserve cuts is keeping currency markets on their toes with tonight’s ECB meeting the key focus on the calendar.
The Shanghai Composite is now almost in free fall with another 1% decline, remaining well below the critical 2900 point support level, to close at 2827 points. The Hang Seng Index has closed with a scratch session, with the daily chart still 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 down 0.1% going into the European session with the four hourly chart of the S&P500 chart showing a stall after the previous 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 also put in a scratch session as the Yen advanced throughout the day, with the Nikkei 225 finishing at 20774 points, remaining above the key terminal and psychological support level at 20000. I thought there might yet be a bottom in the USJDPY pair but a new series of session lows as it remains just above the 108 handle but below key resistance at the 108.50 level:
Australian stocks were the best performer in the region with a small blip higher with bank stocks helping the ASX200 closing 0.4% higher to 6383 points, still below previous support at 6400 points. The Australian dollar didn’t move much around the trade balance release but remains below the 70 handle, stalling here going into the London session:
The economic calendar will be dominated tonight by the latest ECB meeting with a press conference by Mario Draghi. There’s also US initial jobless claims that will be closely watched after last nights ADP print.