Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

By Chris Becker 

US markets were closed for thanksgiving overnight, leaving other risk markets to their own devices as the Chinese reaction to continued pressure on their oppression in Hong Kong made a small impression. A lack of further economic releases of any import keep risk aversion contained to a slight dip in European stocks while only Pound Sterling moved higher against USD.

Looking at the action on Asian markets yesterday, where the Shanghai Composite slumped after putting in a series of scratch sessions previously, retracing over 0.5% to be below the  former 2900 points resistance level at 2889 points. The Hang Seng Index also fell back, but only by 0.2% or so to remain below its own resistance zone at 27000 points. The daily chart was tentatively bullish but no firm technical signs of a sustainable trend or breakout here as price remains stuck between the moving average band:

Japanese share markets had a weak session as well despite a weaker Yen previously with the Nikkei 225 closing 0.2% lower to 23409 points, as it remains above daily support at the 23000 level. The medium term trend is very firm as trailing ATR support has been respected, but futures are indicating a flat open this morning in line with other directionless risk assets:

The ASX200 was the only positive mover in the region, closing 0.2% higher after previously cracking right through the 6800 points barrier, helped along by a weaker Aussie dollar. SPI futures are up nearly 30 points again suggesting more upside to finish the week and month on a very high note:

European markets are still struggling to gain traction, as the lack of US trading as well as Chinese fury over the latest anti-HK oppression didn’t help move volume along. The German DAX finished 0.3% lower to 13245 points but remains firm on the daily chart as it maintains itself above multi-month resistance at 12700 points and not yet threatening trailing ATR support:

Wall Street was closed due to Thanksgiving and should see a boost given the Black Friday/Cyber Monday retail orgy is at hand. The S&P500 previously made another new record high and is lookin to do so again on return tonight as price continues to respect the 3100 point support area:

On currency markets, the USD remains strong against the majors, although Pound Sterling saw a slight blip higher with Euro remaining weak right on the 1.10 handle overnight. Price is still above the previous weekly low at the 1.0980 level so there is the potential for a bottoming action here in the short term:

The USDJPY pair was unable to break out higher yesterday and remains stalled right on the mid 109 level, but still looking positive. Maybe a bit too positive and ahead of itself with the potential for a swing lower from the extremely overbought position, but for now price is respecting both the low moving average and lower ATR support:

The Australian dollar was looking like finding some sort of a bottom but has been unable to make any new session highs here on the four hourly chart, sitting just above the previous weekly low at the 67.60 level. Turn this chart upside down and you’d be bullish – so watch the low moving average today for signs of a breakdown:

Oil prices are stable without much trading going on, as the WTI contract remains just slightly over the $58USD per barrel level. The daily chart is still looking bullish with momentum in overbought readings and suggesting a trend back up to the $60 level:

Finally to gold, which is wilting here against USD strength, still on the floor at the $1455USD per ounce level and back to recent lows. There was hope here of price bottoming out but don’t get too excited unless that high moving average is breached very soon – at least $1470 or so is required or its yet another retest of the lows below $1450:

 

Glossary of Acronyms and Technical Analysis Terms:

ATR: Average True Range – measures the degree of price volatility averaged over a time period

ATR Support/Resistance: a ratcheting mechanism that follows price below/above a trend, that if breached shows above average volatility

CCI:  Commodity Channel Index: a momentum reading that calculates current price away from the statistical mean or “typical” price to indicate overbought (far above the mean) or oversold (far below the mean)

Low/High Moving Average: rolling mean of prices in this case, the low and high for the day/hour which creates a band around the actual price movement

FOMC: Federal Open Market Committee, monthly meeting of Federal Reserve regarding monetary policy (setting interest rates)

BOJ/Abenomics: Bank of Japan, economic policy/direction enacted by PM Shinzo Abe

DOE: US Department of Energy 

Uncle Point: or stop loss point, a level at which you’ve clearly been wrong on your position, so cry uncle and get out!

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