Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

Tech stocks were crunched on Wall Street overnight despite the lack of catalysts, although Treasury Secretary, former Fed boss did spook some by suggesting the Fed needs to raise rates soon. European markets also fell alongside but commodities continued to scream higher – alongside Dogecoin! – with oil up nearly 2% as Treasury yields fell back again on the risk aversion trade.

Bitcoin  pulled back from its Monday breakout, hovering just above the $56K level yesterday before slumping overnight as it tries to fill its two week correction. Momentum has gone negative on the four hourly chart with support at last week’s intrasession low at $52K coming up soon:

Looking at share markets in Asia from yesterday’s session, with the Shanghai Composite and Nikkei 225 still closed it was all eyes again on the Hang Seng Index which made a good bounceback after the previous drubbing, gaining just over 0.7% to close at 28557 points. Notably, futures show it still on the ropes here as daily momentum remains in the oversold zone as we could see a retest of the March low at the mid 27000. The key level to break on the upside remains ATR daily resistance way above (solid red line) and that’s not happening anytime soon:

The ASX200 also had a modest session as traders continually bid to keep the bourse above the 7000 point level, closing 0.5% higher at 7067 points. The daily chart still shows momentum retracing from the previous overbought levels and the low moving average coming under threat which could stall this rally above the previous breakout levels (solid horizontal black line). SPI futures are down nearly 30 points as the Wall Street wobbles overflow locally but price support is still quite firm:

European markets were hit hard on the Wall Street shenanigans with the German DAX losing the most, whalloped over 2% lower after a good start to the week and actually closing below the key 15000 point level. Sentiment has now shifted considerably after holding up for the last couple of weeks, and as I warned yesterday caution has been the order of the day as momentum readings continue to subside and suggested a breakdown below ATR trailing support. Watch for a confirming selloff tonight:

Wall Street was seemingly ready to breakout again after a normal consolidation period but was spooked with the NASDAQ losing nearly 2% while the S&P500 finished 0.7% lower at 4164 points after again failing to break back above the 4200 point level. The four hourly chart was a little unsure of itself before this breakdown with medium term support at the 4100 point level still quite strong, so let’s see if it bounces off this level tonight:

Currency markets remain at high volatility levels again with yet another reversal in USD fortunes as Euro was pushed back down to the 1.20 handle. Despite it firming as stronger medium term support, the four hourly chart has put in a top here a momentum goes back to its oversold level as price action bears down on the previous weekly lows:

The USDJPY pair was more sanguine, hovering above the 109 handle without much movement despite another USD reverse gear change as it remains well above four hourly ATR support. Momentum is still nominally positive but the return of Japanese traders soon might cause a stall here before anymore upside:

The Australian dollar was pushed well below its recent tight trend channel, breaking through the 77 handle before a late fill this morning which has it on the ropes. Finally some indication of where traders are positioning here despite record high commodity prices as the dovish RBA outweighs a hawkish Fed and Treasury:

Oil prices continue their rebound despite the osciallations in USD with Brent lifting nearly 2% to get back above the $69USD per barrel level once more. This almost takes out resistance overhead at the former highs which I’ve been saying is the real level to watch out for, with daily momentum about to get busy:

Gold was unable to break above the psychologically important $1800USD per ounce level but didn’t put in a lower session despite the stronger USD which still firms up my indication of more support as daily momentum goes into nicely overbought mode – watch for any daily close above the current level:

 

 

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

  1. PalimpsestMEMBER

    If BTC fails to recover and does a tulip dive then that would be a lot of capital disappearing. It would have a serious flow on to other crypto, high Tech stocks, and arguably even the real world. I’m keeping a wary eye on it. Just observing.

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