Macro Morning

See the latest Australian dollar analysis here:

Macro Morning

Steady as she goes across most risk markets overnight, although Wall Street wobbled after European bourses stalled out due to the higher Euro.  The USD remained weak against most of the majors although gold and silver were largely unchanged while US Treasury yields pulled back slightly after recently almost making a new yearly high as commodities remained strongly bid, especially oil which made a new 12 month post COVID high.

Bitcoin remain strongly bought by everyone, putting in another new historic high past the Tesla news, adding a few more thousand dollars to finish just below the $47K level this morning. The four hourly chart looks norminal but don’t zoom out – its an obvious bubble!

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite closed 2% higher to get just over the 3600 point barrier while in Hong Kong the Hang Seng Index is up 0.5% to finish at 29476 points. This rebound is trying to regain lost momentum after a temporary stall with price finally getting back above the high moving average on the daily chart, so watch for a rejoinder back up to the 30000 point level:

Japanese markets were in stall mode after the big surge previously before a flourish at the finish saw the Nikkei 225 rise by 0.4% to close at 29505 points. Daily ATR support continues to firm higher as medium term support builds at the 28000 point level as this bull market accelerates:

The ASX200 took back its solid start to the week, with a pullback of nearly 0.9% as confidence evaporated, closing at 6821 points. SPI futures are up a handful of points but we could be in for more downside today as resistance continues to build overhead and the ng around these levels so I still contend we could see a rejection here and a trading range through the week:

Mixed sessions throughout Europe and the UK with the German DAX pulling back 0.3% after its previous scratch session, closing right on the 14000 point level. Price needs to remain above that level as it still has not exceeded the former highs in early January which will be natural resistance going forward:

Wall Street stumbled with only the NASDAQ putting in very modest gains while the S&P500 finished with a scratch session, down 0.1% to remain just above the 3900 point level at 3911. The four hourly chart shows the clearance of the former January highs in this reflation trade but its slowly reaching an apogee here even though it wants to get to the 4000 point level, watch momentum and the low moving average for signs of a stall:

Currency markets continued their merry way, still fully aligned with a weaker USD meme with Euro pushing through the 1.21 handle after making good on its post NFP surge from Friday night. Momentum is now nicely overbought and price is almost back to a two week high so there is still potential for more upside as price gravitates to the high moving average, but watch for a potential pullback on tonight’s German inflation numbers:

The rollover USDJPY has finally stopped at the mid 104’s without any new session lows overnight, but this could change swiftly if risk markets don’t get back on track in today’s or tomorrows trade. Yen buying could pick up here and take the pair back to the previous weekly low at the 103’s, so watch for a new session low below the 104.50 level:

The Australian dollar continues its uptick and remained well above the 77 handle overnight. The four hourly chart is showing continued strength in the Pacific Peso in the short term at least with momentum still quite overbought, and ripe for a small pullback as exhaustion could be settling it as it closes in on the previous weekly highs above the 77.40 level:

Oil prices continued their breakout with Brent moving higher yet again, this time pushing through the $61USD per barrel level, to make another new daily high and climbing well above the pre-COVID level trading range. I maintain the upside target here could be as high as $70USD per barrel at the 2019 highs:

Gold is slowly coming back in line with other alternative currencies but is still in technical breakdown mode despite a move higher overnight through the $1838USD per ounce level. Momentum remains very oversold and while this could turn into a swing long play, watch for a failed break of the high moving average on the daily chart for signs of a capitulation:


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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