Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

Action on risk markets overnight was relatively mild as Trump’s dumping of the Congress stimulus package was absorbed with aplomb by stocks, with rumors that the Brexit deal is almost sealed helping lift European stocks. Commodities found a solid bid with oil rising 2% or more while gold and silver stabilised alongside Bitcoin, as it continued to hold above the $23000 level,

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite finished up nearly 1% to just below the 3400 point level, while in Hong Kong the Hang Seng Index was up over 0.8% to 26343. The daily chart has arrested the slidedown from the recent sideways shuffle as support comes into play at the 26000 point level, which really needs to hold here as daily momentum heads into negative territory:

Japanese stock markets put in mild sessions, with the Nikkei 225 still stuck in a sideways trend and closing 0.3% higher to 26259 points. Futures are suggesting better buying support on the open, but this sideways market really needs to get out of this funk soon with resistance at 27000 points an obvious sticking point. I’m continuing to watch the low moving average at the 26400 point area as a potential breakdown looms:

The ASX200 was able to flip back into the positive zone, up nearly 0.5% to 6649 points, still below the previous 6700 point level but looking a bit steadier.  SPI futures are also offering a bit more support for today’s truncated trading day (closing at 2pm) but the daily chart still looks a bit mixed here as strong daily support at or just below the 6500 level needs to hold going into year end:

European markets continued their bounce back on the back of the backed into a corner Brexit deal, with the German DAX again closing 1.3% higher at 135878 points, getting square again after its  its previous slump. Last week’s breakout looks set to repeat here if price can clear the previous highs above 14000 points, but the increase in volatility during a low volume period is not yet convincing:

Wall Street diverged again but this time it was the NASDAQ losing ground, down 0.3% while the S&P500 eventually closed with a scratch session after a late selloff brought it back to where it started.  The four hourly chart still shows volatility within a very wide band of low and high prices with a point of control still near the 3680 point level as evidenced by that late pullback. I still contend if the market cannot clear 3700-3710 before Xmas we are in for more downside:

Currency markets are dwindling in volatility with Euro flopping again overnight, almost making a new low for the week and still below the 1.22 handle despite an attempted breakout. As I said previously, the inability to beat last week’s session high suggests more downside ahead, so watch former ATR support on the four hourly chart at the 1.2170 to come under pressure:

The USDJPY pair was quiet again overnight, with not much movement around its current point of control, still unable to make a new session high for the week. Resistance remains strong at the previous weekly support at the 103.60 area (solid black horizontal line below) but momentum readings have switched to positive in a sign that it may have another go at a breakout here. I remain unconvinced as the medium term trend remains down:

The Australian dollar however enjoyed the risk bid alongside commodities overnight and lifted up towards but not through the 76 handle as it tries to square up for the week. This looks like a weak move but could be misconstrued given we are going into a trading break soon:

Oil prices came back, with Brent crude finished 2% higher to just above the $51USD per barrel level, almost taking back all of the previous mild dip. Short term support is holdin ghere at the $50 level, as the potential for a swing play below trailing ATR support at the $48.50 level fades:

Gold had another interesting night, with a lift up towards former ATR support at the $1876USD per ounce level before fading into the close. The four hourly chart is not that exciting for gold bulls just yet, with momentum still flatlining, but buying opportunities are there as support at the previous weekly support key level at $1850 remains intact:


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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  1. Stewie GriffinMEMBER

    Is Ripple’s XRP token a digital currency unit, or a security?

    We may soon find out after the SEC revealed plans to file a billion dollar law suit against the company, its CEO Brad Garlinghouse and founder Chris Larsen.

    A number of exchanges that are directly regulated by the SEC have already delisted it:

    Causing its price to fall 50% (80% from recent ATH)…. albeit back to the price it was at the start of Oct.

    After XRP comes the big one, ETH 2.0. While the SEC earlier opined that ETH was not a security, that was based around its previous POW basis. With ETH 2.0 being based around a POS consensus that may no longer hold true, the fact that ETH holders have to actually exchange their ETH tokens for ETH 2.0 tokens may also trigger CGT tax events.