Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

Wall Street fellback from its record highs after Congress decided to hit the tech heavies with more anti competition legislation while the USD was also effected as Euro spiked to a new weekly high above the 1.20 handle. Treasury yields lifted again as commodity prices finally found a positive mood although gold fell back unexpectedly.

Bitcoin suffered a near 20% drop on the back of the Turkish ban, falling from the $62K level to just above $54K overnight, finding a small bounce this morning. All part and parcel for this volatile “asset”:

Looking at share markets in Asia from yesterday’s session where the Shanghai Composite was up nearly 1.5% to close at 3477 points while the Hang Seng Index finished 0.5% higher to 29107 points. Futures are seeing a pullback this morning with price action still showing a desire to break out above 29000 points and return to the March highs, but watch daily momentum readings which remain negative:

Japanese markets struggled to find a strong bid, with the Nikkei 225 putting in a scratch session in the wake of a stronger Yen. The daily chart shows futures indicating a big move below the 29600 point of control that has held since the false breakout in early April so watch for a follow through on momentum readings that indicate a proper dip is underway:

The ASX200 started out strong but only managed to finish a handful of points higher, closing at 7065 points. SPI futures are down nearly 0.5% in response to the tech rout with this likely to be a consolidation period around the new 7000 support level:

European markets were in a very bullish mood to start with but bifurcated later in the session with peripheral markets edging up higher while the FTSE and German DAX both fell back, the latter losing 0.6% to finish at 15368 points. This market is still cooking since breaking out in early March above the 14000 point level with daily ATR support still very firm at the 15000 point level:

Wall Street stumbled on the tech squeeze with the NASDAQ leading the way to finish nearly 1% lower while the S&P500 lost 0.5% to still be well above the magical 4000 point level at 4163 points.  Its still a straight line on the four hourly chart albeit with support at the 4130 level holding firm so far – but watch for any further rollover through this level tonight:

Currency markets are seeing a continued pullback in USD with Euro rallying again to a new weekly high, hitting the 1.20 handle overnight in the process.   This pushes through the previous resistance high level reached in early March, so this could be the start of overturning the long running downtrend:

The USDJPY pair as a result of weak USD has seen another breakdown, hitting the 108 handle and having a headwind effect on Japanese stocks. Daily ATR support has now been properly nominally breached, with daily momentum negative and the March support levels around the low 108’s barely holding on so watch for another potential breakdown:

The Australian dollar broke out overnight but pulled back most of those gains to match its previous weekly highs, still sitting on the mid 77 level.  It still has to breach the 78 handle at the trailing daily ATR resistance level that equates to the March highs before calling this a bottom:

Oil prices are pushing slightly higher again with Brent crude pushing back above the $67USD per barrel level again overnight. The daily chart is showing more signs of a proper recovery here but daily momentum is not yet overbought so this could just be a relief rally as psychological support at $60-61 still holds:

Gold is trying to gain more upside traction with a retest of the late February/early March support level below the $1800USD per ounce level finding some resistance overnight with a mild pullback.  While the longer term charts continue to signal a downside target at the 2019 pre-breakout highs around $1500, this could have more legs on the weaker USD as it reaches the 2020 lows (solid horizontal black line to the left):

 

 

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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