Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

A surge at the end of Wall Street’s session last night has brought more risk appetite to Asia after yesterday’s mixed start to the week. The appointment of former Fed chairwoman Janet Yellen as the new Treasury head in Biden’s possible administration sent stocks and the USD higher, pushing down all the undollars especially gold. More vaccine news helped as well, with oil prices breaking out while as the flash PMIs in the US surprised to the upside while European measures disappointed.

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite pushed ahead with a very positive session, up 1.1% to 3414 points while in Hong Kong the Hang Seng Index it was a case of treading water with a scratch session, up only 0.1% to 26486 points. The daily chart remains in stall mode here as momentum reverts from its overbought mode as daily price action continues to slide sideways, unable to punch through resistance at the 26800 point level:

Japanese stock markets had yet another holiday with the daily chart of the Nikkei 225 futures suggesting a big lift on the open this morning however, but I’m still watching the 25300 point zone to firm as support in this very overextended market:

The ASX200 pushed higher, this time closing up 0.3% to the 6561 point level. SPI futures are very ebullient – up at least 50 points or 0.5% – with another firm open this morning as the session highs above 6500 points suggest a continued breakout although a deceleration pattern is emerging:

European markets once again disappotined with modest falls across the continent, with the German DAX dropping 0.1% to close at 13126 points. This market remains completely stalled with no new session highs in a couple weeks, so I don’t expect much upside unless more positive COVID news comes down very quickly:

Wall Street was looking dicey before the end of the session as the S&P500 finished 0.5% higher at 3575 points. The four hourly chart is not broadcasting all guns blazing here as it still shows a market unable to break higher with short term support at the 3545 point level firm but no significant breakout:

Tech stocks were not as convinced, with the NASDAQ only rising 0.2% to 11880 points. The pattern on the daily chart remains nominally bearish as price action is still unable to clear the downtrend from the August bubble like highs (upper black sloping line). The key is daily support to hold on at the 11500 point level but momentum is really waning here:

Bitcoin’s bubble may be faltering a little with no new daily high and a small sign of retracement, but still well above the $18000 level. Predictions are hard to make – especially about the future – but I’m starting to think a downleg on profit taking/fixing/manipulating is imminent here:

Currency markets had all the action overnight with some violent whipsaws as the USD weakened and then firmed against most of the majors due to the Yellen appointment. Euro snuck a look at the 1.19 handle before moving 100 pips the other way as the PMIs disappointed, taking out ATR support at the 1.18 handle proper before coming back slightly. This is the precursor to another step lower as the medium term pattern turns slightly bearish:

It seems the bottom is in on the USDJPY pair which threw off overhead resistance and smashed its way to the mid 104 level overnight. There could be more upside here on the return of Japanese traders wishing to sell Yen into the positive risk sentiment, so watch for more session highs on the four hourly chart:

The Australian dollar was unable to hold on, its feint move on the Monday morning open completely squashed back below the 73 handle with the failure to make a new weekly high the key signal here.  Four hourly ATR support at the 72.50 level must here or this two week long sideways move will capitulate:

Oil prices are moving to blowoff stage after recently getting out of their funk and pushing through resistance at the September/October points of control, with Brent up more than 2% to finish ajust below the $46USD per barrel level:

Gold is finished. The shiny metal broke through key daily and weekly support overnight well below my target at terminal support at the $1860USD per ounce level. The previous large breakout level at $1750 is still the next target below:

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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