Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

Wall Street stalled out again with only tech stocks gaining while the USD fell back against most of the majors despite better than expected initial jobless claims in the US in a fairly tepid session that only really saw the FTSE and Pound Sterling gain on continued Brexit talks. Commodities kept pushing higher in the wake of the weaker USD while Bitcoin is relatively stable above the $19000 level as it builds again to try to breach its record high.

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite was the only stock market really struggling, down 0.2% to 3442 points while a much brighter day in  Hong Kong saw the Hang Seng Index advancing 0.7% to 26728 points.  The daily chart has moved passed the failed rising bearish wedge pattern as price support firms here at the 26500 point level and daily ATR support at the psychologically important 26000 point level remains untouched, so watch for a breakout above the high moving average next:

Japanese stock markets went nowhere with the Nikkei 225 barely moving at 26809 points. Futures are suggesting another flat open this morning in line with stalled risk on Wall Street overnight. While the daily chart remains caught in a stonking rally, momentum is slowing down and ready to invert as resistance at 27000 points is building:

The ASX200 has broken above the 6600 point level, up 0.4% to 6615 points.  SPI futures are flat lining again going into the open this morning, and although traders want to push the market back above the 6700 point level there is a growing chance of a retracement here if the stall continues:

European markets were again all over the place with the FTSE the only one to gain, up some 0.4% while the German DAX dropped over 0.4% to close at 13252 points. Yet another market in stall mode, but the last two days of price action are spelling out some concern for bulls here as exhaustion sets in. Watch the low moving average for a possible breakdown as the DAX remains unable to push above 13300 points:

Wall Street was nominally bullish overnight with the NASDAQ gaining a handful of points while the S&P500 was positive but then closed in negative territory by a point or two. This is not quite a stall but they better get some air flowing over the wings (cue picture of the Fed puffing air by the printing presses) as this market remains nicely bought above the key psychological 3600 point level:

King Dollar is still having mixed results across currency markets with Euro pushing higher yet again on the US initial jobless claims print as it remained above the 1.21 handle in what looks like exhaustion. This overstretched breakout is way overdone and should come under pressure again in the short term in a mean reversion trade, so watch the low moving average at the 1.2120 level for signs of a breakdown going into tonight’s NFP print:

The USDJPY pair has collapsed, heading straight down to previous weekly lows below the 104 handle in the wake of the jobless claims print. This puts up big expectations for tonight’s NFP number although this unexpected swing down is oversold already:

The Australian dollar continued its own breakout,  as it remains stuck well above the last weekly high at just above the 74 handle despite being considerably overbought.  Four hourly ATR support is lifting and may even switch to the 74 level proper soon:

Oil prices are still finding strength in the wake of the anticipated OPEC+ meeting with Brent crude up 1% to almost cross above the $49USD per barrel level overnight. As I said previously, if it can continue this mild deflation it has the potential to stabilise here although there always remains the chance of a violent reversal so watch the low moving average at the $46 level very closely:

Gold is continuing its fightback, extending its bounce well above the $1800USD per ounce level overnight to the $1840 level as the pre-breakdown lows at $1860 firm in trader’s sights. I still contend that the previous large breakout level at $1750 from mid-year is still the next target below if this swing move higher can’t be sustained:

 

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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