The ebullience from overnight markets has not translated into meaningful gains here in Asia with most bourses struggling with scratch results late in the session. The potential for a US China trade deal before Xmas is pushing risk appetites higher – but too high and too fast – so a retracement is inevitable. Gold is just holding on after breaking multi-week support overnight while the Aussie dollar can’t maintain above 69 cents against USD.
In mainland China, the Shanghai Composite gapped higher on the open but is struggling to hold on to those gains in the post lunch session, currently up only 0.2% or so at 2989 points and looking to close the week out just below the key 3000 point resistance level. Meanwhile the Hang Seng Index is falling after getting ahead of itself, currently down 0.4% to 27726 points as the daily chart clearly shows an overextended rally after recently clearing the 27000 point level:
Japanese share markets are treading water but remain positive going into the close, with the Nikkei 225 up only 0.1% or so to 23366 points. The retracement in the well overbought USDJPY pair is abating as it reaches the 109 handle as momentum wanes going into the London session:
The ASX200 has been unable to translate its recent gains into a sustainable breakout, falling 0.2% and looking to head the week just above 6700 points. The lower Aussie dollar hasn’t helped as usual, with the Pacific Peso about to make a new weekly low and remaining under the 69 handle where it could threaten weekly support at the 68.75 level:
Both S&P and Eurostoxx futures are falling slightly with the S&P500 four hourly chart showing price at the lower band of the trend channel from last week’s breakout, with ATR support at 3060 points the uncle point to watch tonight:
The economic calendar finishes the week with the latest German trade balance and Canadian unemployment figures, but also a reweighing of UK sovereign debt by Moody’s. Have a good weekend and safe trading!