Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

A very quite night on risk markets with most US markets closed due to Thanksgiving with an expected slow and quiet end to the trading week here in Asia. European markets followed the trend and did almost nothing, with all eyes on Bitcoin which dropped over 10% in a single session, as bond markets also escaped any action with a lack of economic events.

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite floated along not doing much, closing 0.2% higher at 3369 points while in Hong Kong the Hang Seng Index had a minor lift of 0.5% to close at 26819 points. The daily chart shows price still pushing ever so slightly higher as it still battles resistance at the 26800 point level, which could stop here due to a lack of further risk sentiment:

Japanese stock markets continued to surge higher however with the Nikkei 225 up 0.9% to 26537 points. Futures are suggesting a flat open this morning however on the lack of direction, as this very overextended market surely must have a breather soon. Watch daily momentum readings and price action around the high moving average for signs of an inversion:

The ASX200 was the odd one out, falling over 0.7% to close at the 6636 point level. SPI futures are also in pullback mode as hesitation builds going into the truncated end to the week. There is a growing possibility of a deceleration pattern and then a small pullback to the 6500 point level:

European markets were relatively quiet with minor moves higher or scratch sessions, the German DAX basically unchanged at 13286 points. This market remains stalled at the September highs nearer 13300 points although short term price action is building for a potential breakout, the continued rise in Euro may thwart further upside moves:

Wall Street was closed last night with S&P500 futures suggesting a small retracement on resumption tonight at around the 3600 point level. The four hourly chart is showing an invesrion of momentum that is not yet confirmed due to the broken up sessions as it resists going above the previous weekly highs:

Yesterday I mentioned that Bitcoin’s bubble above the $19000 level had a potential double top pattern forming on the four hourly chart, but required a proper breach of the low moving average – and here we are, with a deep follow through below trailing ATR support way below at the $17900 level. The $16000 handle was briefly touched and now with momentum oversold in the short-term there is potential for a swing trade to get back to where it stopped the music:

Currency markets are pausing in their firming against USD with Euro having a little shake overnight around the 1.19 handle for not much eventual direction. Its still at a new weekly high and remains nicely overbought, although the medium term pattern is still slightly bearish:

The USDJPY pair deflated into nothing overnight with the lack of trading and pushed slightly below the mid 104 level. Nominally there is a bullish falling wedge pattern on the four hourly chart but this maybe just the thanksgiving lack of volume telling a different story – but be on guard for a possibly surge above the 104.50 level tonight:

The Australian dollar is trying in vain to push higher, still holding above the 73 handle and keeping on to its new weekly high but going precisely nowhere in the effort.  Four hourly ATR support and price action at the low moving average is holding here with the latter a good uncle point going into the weekend:

Oil prices were in a blowoff stage after pushing aside resistance at the September/October points of control, and pulled back slightly overnight as Brent finished below the $48USD per barrel level. As I said yesterday, this is obviously an unsustainable move on technicals alone, and we could get a violent reversal here soon:

Gold remains in a precarious state with the shiny metal still well below key daily and weekly support levels as it stabilises just above the $1800USD per ounce level . The previous large breakout level at $1750 from mid-year 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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Comments

  1. Chris, yesterday’s gold action was telling me that if US markets were more active, it would have rally higher. Gold broke clearly through $1810 and was testing $1817/18 waters.
    I may be totally wrong but I start to be bit bullish on gold again.