Macro Morning

See the latest Australian dollar analysis here:

Australian dollar climbs with global stock surge

Last night saw a pause in rising risk sentiment due to an absence of economic or other catalysts, although the freeing of the Ever Given ship in the Suez Canal should bode well for global trade.  The USD made a five month high, pushing Euro down again while the Aussie dollar failed to gain traction. Treasury yields rose again, breaching through the 1.7% barrier while commodity prices where mixed with iron ore surging, oil lifting slightly as gold slumped to a new weekly low.

Bitcoin shot out of the gates on the weekend gap, hitting the $58K level overnight before pulling back in line with its two week downtrend from the record highs above $60K. Momentum is now nicely overbought on the four hourly chart so watch for another attempt higher to get back to the previous weekly high:

Looking at share markets in Asia from Friday’s session where after a turgid week, the Shanghai Composite closed exactly 0.5% higher at 3435 points while the Hang Seng Index put in a scratch session after being down most of the day, closing at 28338 points. Future are looking a bit better this morning with price action showing a desire to get back to the previous support level at 28700 or so but momentum remains heavily oversold so this could be a short term reprieve only:

Japanese markets were looking to put in scratch gains but surged at the close, with the Nikkei 225 eventually closing nearly 0.8% higher at the 29384 point level with price crossing above the 29000 point level that has been a point of control since late February. Futures are showing a flat start for this morning despite another surge in the USDJPY pair overnight as traders mimic action on Wall Street again:

The ASX200 was the worst off, down by 0.4% to be just below the 6800 point level. SPI futures are showing a much better start this morning to recover that loss and more on the open but there is still a lot of congestion to get through here on the daily chart above the 6800 point level as daily momentum go into a nicely overbought pattern:

European markets moved back into mixed mode again with peripheral stocks and the FTSE largely unchanged while the German DAX kept pushing higher, up by 0.4% to 14817 points. This puts on even more gains with yet another new monthly high with more upside potentially on the way as short term support at the 14400 point level firms once again:

Only the DOW advanced on Wall Street overnight with a 0.3% return while the NASDAQ fell back 0.6% and the S&P500 finished a few points lower at 3971 points, unable to break through the magical 4000 point level. The four hourly candles are showing hesitation here with resistance building just below that level and momentum starting to rollover from the nicely overbought status so watch for any movement in price back down to the low moving average around the 3940 level:

Currency markets were again somewhat subdued due to the lack of economic releases with USD still dominating against the majors. Euro rolled over as expected following a very weak bounce on  Friday night to retreat well below the 1.18 handle. This takes price back to last week’s intrasession low so watch for a break below the 1.1750 level for signs of a sustained selloff:

The USDJPY pair continues to standout however, continuing its surge and this time almost getting through the 110 handle after a minor weekend gap hiccup. This has all the signs of another retest but I am concerned that is maybe a bridge too far so watch for signs of momentum rolling over on the four hourly chart:

The Australian dollar continues to deflate into a mild area of buying support, staying just above the 76.30 overnight in response to the lack of real momentum in commodity prices. With price unable to yet get through trailing ATR resistance above, I’m watching for another rollover here to takeout key support levels at then return to the mid 75’s:

Oil prices remain volatile in the wake of the continued Suez canal blockage with Brent crude bouncing back overnight to get back above the $65USD per barrel level but only just. The daily chart is starting to firm to the upside with a nearly clear breakout but I’m waiting for a proper move above that high moving average with ATR daily and psychological support at $60-61 a great uncle point going forward:

Gold has been struggling for awhile now and last night it caved yet again, starting the week by losing over $20 to be at $171USD per ounce level. The previous short term bounce was nothing more than a small short covering move that can’t even get back up to previous strong resistance at the $1770 level with the longer term chart signalling the next downside target at the 2019 pre-breakout highs around $1500:



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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