Macro Morning

See the latest Australian dollar analysis here:

Macro Morning

More hopium is sending risk sentiment higher, at least on Wall Street as traders book a potential pre-Christmas stimulus package from Congress. Commodities continue to do well across the board as iron ore follows Bitcoin to the stratosphere, the latter pushing above the $23000 level although its looks very toppy here on the four hourly chart:

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite finished up nearly 1% to the close at 3404 points while in Hong Kong the Hang Seng Index has followed suit, rising 0.8% to finish at the 26678 point level. The daily chart is still tracking sideways but momentum is rising again, with this new daily high slowly helping with sentiment. I’m continuing to watch ATR daily support at the 26000 point level, but a breakout maybe brewing:

Japanese stock markets had modest rises, as the stronger Yen continues to weigh with the Nikkei 225 closing 0.3% higher at 26831 points. Futures are suggesting a flat start today with the daily chart still poised here as resistance at 27000 points still proves too tough to beat, so while I continue to watch the low moving average at the 26400 point area as a potential breakdown, risk suggests a breakout soon:

The ASX200 was again the best in the region, closing more than 1% higher to 6756 points, bursting straight through the 6700 point level.  SPI futures however are a bit downbeat despite the rise on Wall Street overnight so we could see a fallback to the 6700 level to finish the week out:

European markets were again mixed with the FTSE falling back, peripheral markets largely steady while the German DAX stood out again, pushing higher to close up 0.7%  at 13667 points. The breakout continues but is not yet overbought, still with a clear uncle point at the 13000 point level proper:

Wall Street was unified this time with all three bourses rising, the NASDAQ again leading the way, up 0.8% while the S&P500 finished 0.5% higher at 3722 points, remaining well above the 3700 points barrier. The four hourly chart shows price ready to advance to the last week’s high after beating 3700 points as momentum gets overbought and ready to over-extend:

Currency markets are seeing volatility move higher again with USD losing ground overnight as the Euro spiked to a new weekly high well above the 1.22 handle in a very over-extended move. Momentum is well overbought now on the four hourly chart, with price action suggesting some exhaustion, but no evidence yet of a pullback:

The USDJPY pair confirmed the weak USD meme overnight, as it briefly went below the 103 handle again before finding some very minor buying support above that level. This keeps it well below weekly support at the 103.60 area (solid black horizontal line below) and as I said yesterday more downside volatility would spell a new session low below the 103.20 level to match the November low, and here we are:

The Australian dollar was able to make yet another move higher, this time creating a new session high for the week, rising well above the 76 handle for almost a new high for the year! This is well overbought but nothing to stand in its way, as the commodity boom explodes higher in step with risk sentiment and more QE down the pipeline. Short term I’m watching the low moving average and ATR support at the 75.40 to hold:

Oil prices continue to find strength with Brent crude lifting again to remain bid well above the $51USD per barrel level, also getting back to its start of year position. Momentum remains nicely overbought but not overly so with the trend still moving above the low moving average since the breakout in early November – how far can it go?

Gold is finding more momentum to the upside here, finally catching up to Bitcoin (somewhat) and now well above its early December highs to well above the $1880USD per ounce level. Four hourly momentum has quickly switched to extremely overbought so I expect a small retracement before another uptick to threaten the $1900 area:

 

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. Some updates from few trades..

    Yesterday PXX released really poor assays but I was lucky people can’t read so exited on the open before they crashed.
    Today ALK released decent assays but hardly moving up. They found high grade breccia pipe that most likely will lead to the high grade porphyry pipe. Question is how far or deep do they have to chase it. But 50m true width with roughly 3.5g/t AuEq is not bad at all.
    And bought more BBUS this morning. Silly, I know.