Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

Initial weekly jobless claims in the US spiked a little higher than expected, with continuing claims also climbing higher but that didn’t dampen all risk spirits with Wall Street edging slightly higher. The USD was effectively unchanged as were Treasury yields while commodities saw mixed returns as oil pulled back slightly while gold fell back nearly 1%.

Bitcoin is still having an interesting week to say the least, rebounding again overnight to make a new high for the week, really trying to burst through resistance at the $48K level and hit that magical $50K number. Note those large open tails above recent price action – too much of a stretch?

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite closed 1.4% higher, moving further above the 3600 point barrier to 3655 points while in Hong Kong the Hang Seng Index is up 0.4% to 30173 points, also staying above its own key 30000 point level.  This rebound is really gaining momentum after a temporary stall with price well above the high moving average on the daily chart, and retesting the mid January highs proper:

Japanese markets were closed for yet another holiday. Daily ATR support continues to firm higher as medium term support builds at the 28000 point level but there is considerable resistance building at the 30000 point level that needs to be overcome:

The ASX200 is still stuck in a trading range with a small fall of 0.1% to close at 6850 points with the Australian dollar. SPI futures are down a handful of points as this trading range through the week continues into what is likely to be a dull Friday session:

European markets were mixed with peripheral markets and the FTSE pulling back or putting in scratch sessions while the German DAX was the odd one out, surging 0.7% higher to close back above the 14000 point level at 14040 points. Price is trying to stabilise back above that level as it still has not exceeded the former highs in early January which is firming as strong natural resistance and could provide a bearish double top setup:

Wall Street was equally mixed with the headline Dow retracing while the NASDAQ and S&P500 finished with mild upticks, the latter up only 0.1% to remain just above the 3900 point level at 3916 points. The four hourly chart shows price seemingly rolling over from its reinflation apogee here even though everyone wants to get to the 4000 point level, watch ATR support at 3900 points and the low moving average for signs of a stall:

Currency markets are exhibiting a similar trajectory with Euro unable to advance clearly overnight after its previous very minor stumble overnight that could be presaging an imminent reversal. While momentum remains nicely overbought, price is anchored at the 1.21 handle with resistance at 1.2150 quite clear:

The USDJPY pair remains fixed at the 104.50 level with some intrasession volatility around the US initial jobless numbers but really its all a lack of volume given the Japanese holiday yesterday.  I’m still watching for any Yen buying that could pick up here on risk aversion and take the pair back to the previous weekly low at the 103’s, with any new session low below the 104.50 level:

The Australian dollar is the only standout with a clearing of upside resistance at the 77.50 level overnight with the four hourly chart showing a new step in this reflation rally. While the Pacific Peso is ripe for a small pullback, clearing the previous weekly highs above the 77.40 level and maintaining these levels of momentum do indicate a new trend higher:

Oil prices have stalled after their big breakout with Brent pulling back slightly, falling below the $61USD per barrel level, and not making another new daily high. This still keeps it well above the pre-COVID level trading range and we don’t get a breach of the high moving average on the daily chart the upside target here at $70USD per barrel at the 2019 highs remains intact:

Gold failed in its own reflation trade, heading straight back to a new low for the week at the $1825USD per ounce level. Momentum was slowly picking back up but short term resistance was too hard with the high moving average on the daily chart never closed above since early January – more downside ahead:

 

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

    • Yay …. buying stocks directly obviously puts wages in people’s pockets and food in people’s mouths. The market = the economy according to all dictionaries.

      Smile and wave boys … smile and wave

      • Best I understand Japan has been transferring wealth to their minions via markets for quite some time.

        Maybe the infamous Mrs Wattannabee’s aren’t as gifted as legend contends?

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