Macro Morning

See the latest Australian dollar analysis here:

Macro Morning

New monthly high in stocks overnight as traders doubled down on talk from central bankers that all options are on the table in keeping equity markets afloat amid a growing pandemic across the North Atlantic. Currency markets were basically range bound while bond markets saw a slight surge with yields falling again. Oil prices pushed higher on supply concerns as Hurricane Delta looks set to stop US Gulf output while gold and silver are slowly inching higher as we head into the end of the trading week.

Looking at share markets in Asia from yesterday’s session where Chinese mainland markets remain closed but in Hong Kong, the Hang Seng Index slipped in its recent advance, down some 0.2% to 24079 points after being down further earlier in the session. The daily chart continues to show a swing play that is struggling to push aside resistance at the former 24000 point support level which could quickly turn this into a proper uptrend although momentum remains negative:

Japanese stock markets did the heavy lifting to a new high, the Nikkei 225 closing nearly 1% higher to 23647 points. Strong resistance at 23300 points remained the key level to beat this week, and with another surge on Wall Street overnight futures are suggesting another new monthly high to be broken today as price heads well above the high moving average and momentum gets nicely overbought:

The ASX200 had another solid session, gaining a further 1% to finish at 6102 points, extending its gains above the 6000 point barrier broken yesterday.  SPI futures are up about 12 points with the daily chart still clearly broadcasting further moves above the 6000 point resistance level as daily momentum reaches overbought levels. The upside target here is the former highs nearer 6170 points or so:

European markets finally moved from mixed to hope with concerns over the second wave of COVID-19 across the continent brushed aside as ECB and other central banks wonks double down of continued easiness of stimulus. The German DAX lifted nearly 1% higher to close at 13042 points with a nice breakout on the daily chart above the high moving average as price action sees a big bounce above daily ATR support at 12400 points. Daily momentum has switched above the positive zone with a probable retest at the 13300 resistance zone soon:

Wall Street was united from the start with a clear move higher overnight with the S&P500 finishing nearly 0.8% higher with the four hourly chart showing continued price action above the high moving average. Notably there is a bearish rising wedge building here but its unlikely to result in a quick breakdown as momentum is in nicely overbought levels:

The four hourly chart of the NASDAQ is still showing a push up against resistance at the 11560 point level that is almost but not yet broken:

Volatility in currency markets was relatively quiet with Euro pushed down slightly as it failed to gain traction in the previous session. Price remains slightly above off ATR support at the 1.1720 level but couldn’t get past the 1.18 handle proper. That is proving strong resistance as momentum remains positive but four hourly price action is already rolling over:

The USDJPY pair is also in a stalled phase, still above the former highs on the continued risk-on move, now just above the 106 handle as price action is at very overbought levels. Trailing ATR support is ticking up and indicating a new trend is underway but it remains to be seen if that former resistance can turn into firm support in the short term at the 105.80 level:

The Australian dollar was able to clawback some more of its recent breakdown, now back to it Monday morning starting point to be at the 71.70 level this morning. Momentum has popped into the positive zone in the short term and price action is no longer pointing to further rollovers with the potential to re-test the previous weekly highs nearer the 72 handle:

Oil volatility continued overnight with another big bounce following the Gulf of Mexico supply concerns, with Brent futures up more than 2% to be well above the $43USD level. The series of lower daily highs is no longer spelling trouble as volatility is creating upside opportunity with a big potential breakout above strong resistance at the $44 level a strong possibility:

Gold is still struggling to gain traction although it did manage to sniff above the $1900USD per ounce level briefly overnight before retracing to be just below at the $1893 level this morning. Daily momentum remains negative but price action remains firm here, but without a breakout above its own high moving average, so its wait and see mode for now:

Bitcoin has an interesting ascending triangle pattern forming on the daily chart with the potential to break above the $11000 level soon:

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)

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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Comments

    • PXX just made an announcement and I am not impressed with the assays. They are not a disaster but not as good as I expected. Especially the 3 cores that have visible gold.
      PXX are drilling the scarn mineralisation which is a satelite deposit to the porphyry intrusion/s that is/are nearby. I mainly invested for the porphyry targets so I am holding but I was hoping for better assays so SP can go higher and PXX can raise more money for more drilling by not issuing too many shares.
      For their porphyry targets they are rightfully looking for JV partner as exploring for these babies costs lot of money due to how deep one has to drill. This is reusa territory.
      More assays pending and I think they will bring some good news. Current one is not bad but nowhere near what I expected and few people will think same so there might be some selling today and over the next weeks. HotCopper id10ts are saying – great results, this is the next 10 bagger. lol

      • Cheers Niko. Good colour. The Hot Copper lot are inherently biased. They wouldn’t make good traders or fund managers. You need to keep emotion out of decision making.