See the latest Australian dollar analysis here:
Wall Street regained ground last night, with the S&P 500 finishing at record closing levels as better-than-expected weekly jobless claims and upbeat GDP figures reinforced the Fed’s accomodative view. A slew of post-close earnings from tech giants may upset the Apple (sic) cart to finish out the week later tonight though. Currencies were essentially unchanged as USD floated along while bond markets saw US Treasury yields up slightly. Commodities were mixed with oil spiking more than 2% while copper and iron ore pulled back from their decade highs as gold failed again to get through the critical $1800USD per ounce barrier.
Bitcoin is rolling over following its failed recovery rally that stalled out as it passed below the $53K level overnight, unable to match last week’s intrasession high as it comes up against four hourly ATR support for a proper breakdown:
There are 2343 words left in this subscriber-only article.
Start your free 14-day trial today!
Looking at share markets in Asia from yesterday’s session where Chinese markets saw a strong bid towards the close with the Shanghai Composite lifting by more than 0.5% to finish at 3474 points while the Hang Seng Index finally found some life and closed 0.8% higher to 293037, managing to escape resistance at the 29000 point level. Futures however are suggesting yet another pullback so this breakout maybe thwarted before it even started, because while positive daily momentum and the overall technical pictures continue to point to a possible bottom here, it really needs to clear the 29500 point ATR daily resistance level soon:
Japanese markets were closed yesterday but should still be riding a wave of confidence from a much lower Yen yet price action on the daily chart of the Nikkei 225 suggesting not much going on again. Futures are somewhat firm but daily momentum remains in the negative zone and a lack of new daily highs pushes away any substantive risk taking:
The ASX200 finished 0.25% higher to 7082 points but it looks like confidence is slipping as SPI futures are indicating a 20 point plus loss on the open despite the record highs on Wall Street overnight. The daily chart still shows momentum nicely overbought and ready to make a new daily high as the accomodative RBA and higher iron ore prices provide a tailwind. The 7000 point barrier should be turning into firmer support with each session but are we reaching a top here?
European markets were the odd ones out overnight as German CPI inflation surprised to the upside, which dampened stock buying across the continent. The German DAX fell back the hardest, losing 0.9% to finish at 15154 points. As I said yesterday, sentiment has been paring back from nominally bullish to basically neutral with daily ATR support still firm at the 15000 point level but I remain cautious as momentum readings continue to subside and do not yet indicate a re-entry position just yet:
Wall Street however had a very solid session with record highs across the board, although NASDAQ lagged with only a 0.2% gain, the S&P500 finished 0.7% higher to pip through the 4200 point level for a new record high. A cursory glance of the four hourly chart shows there’s still a bit of volatility intrasession but momentum is building here for yet another upleg in the US stock market boondoggle:
Currency markets reversed their volatility from the previous session despite all the economic events on the calendar overnight with Euro playing steady against USD as it remains at its new weekly high well above the 1.21 handle. Overbought momentum readings are suggesting more upside as is the longer term charts with short term support at the 1.2060 level firming as a great uncle point:
The USDJPY pair tried to breakout on the GDP print, pushing right through the 109 handle before snapping back to reality yet still looking elevated going into today’s session. Momentum remains slightly overbought but the wild swings down to the 108.40 level are indicative that this is not yet a new smooth uptrend, but I’m looking for more breakouts above the 109 level proper:
The Australian dollar sold off again overnight, now putting in a two week long triple top pattern as it continues to rebuff the 78 cent level versus USD. Again this price action is really only for swing traders with no discernible breakout on price levels or momentum readings as the Pacific Peso bounces along a relatively tight range:
Oil prices finally saw some action with a 2% plus breakout on WTI and Brent crude overnight, the latter finishing exactly at the $68USD per barrel level for another new daily high and more importantly a new weekly high as resistance overhead at the $67 level was pushed aside. The waiting period may be over here as price tries to regain the March former highs above the $70 level next – watch for support at the low moving average to firm here:
Gold is failing to gain any upside traction in the wake of a weaker USD as a wide trading session saw it again unable to finish above the $1800USD per ounce level. While daily price is still above the February lows (solid horizontal black line) longer term charts continue to signal a downside target at the 2019 pre-breakout highs around $1500, so it needs to breakout for a new daily high pretty soon or momentum will flip:
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!