Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

Wall Street zoomed higher on sentiment yet again, with the Dow Jones putting in a record high while European markets were more modest in their rises as the Bank of England kept its composure and interest rates steady, indicating some tapering ahead. The latest initial jobless claims numbers before tonights all-important NFP print was much lower than expected, sending the USD lower against most of the major currencies. Meanwhile, commodities saw another record high in copper, iron ore and lumber while oil prices fell back on the latest inventory report as gold finally burst through the $1800USD per ounce level.

Bitcoin tried to breakout again overnight through the $57K level but was rebuffed again before getting near its Monday night highs as it tries in vain to get back to the $60K level, suggesting a breakdown here below $56K instead:

Looking at share markets in Asia from yesterday’s session, the Shanghai Composite returned but with a mild session so far, falling slightly at the close to finish 0.1% lower at 3444 points while the Hang Seng Index made much more headway, up 0.7% to close at 28637 points. Daily momentum is no longer stuck in the oversold zone but still negative, so a likely retest of the March low at the mid 27000s is still possible if it doesn’t find some confidence soon:

Japanese traders returned and bid up stocks strongly with the Nikkei 225 closing 1.8% higher at 29331 points. This finally takes the market out of its funk although daily momentum is not yet positive, price action has made a significant new weekly high if it can keep hold of it today to finish out the trading week, which is likely given the strong performance overnight on Wall Street:

The ASX200 took back all of its previous gains on the NSW COVID breakout and Chinese issues with a loss of 0.4%, mainly tech stocks, closing at 7061 points. The daily chart still shows momentum slightly below the previous overbought levels but price remains in an obvious floaty mood higher higher.  SPI futures are up 20 points so we should see a solid finish to the week here:

European markets had modest sessions with only the FTSE putting on real gains – up 0.5% – with the German DAX only lifting 0.1% although it rose after the close due to the rally on Wall Street, as it pushes back above the key 15000 point level. Sentiment and momentum is trying to get back into the groove after breaking down below daily ATR trailing support, and requires a solid close above the high moving average here soon:

Wall Street loved the economic news and saw some strong gains across the board with the Dow up nearly 1%, and the embittered  NASDAQ finally able to put in a positive session with a 0.3% gain as the S&P500 finished 0.8% higher to be just above the 4200 point level. The four hourly chart is no longer looking bearish here with a great breakout above trailing ATR resistance but a hair shy of the previous highs from last week so it needs a good follow through here tonight on the NFP:

Currency markets saw yet another reversal of sentiment with USD selling off as Euro swung back after hitting a bottom at the 1.20 handle. The four hourly chart shows trailing ATR resistance at the 1.2060 has not yet been cleared despite this move with momentum barely positive, so this remains only a swing trade until tonights US jobs report which should act as the major catalyst going forward:

The USDJPY pair was pushed lower but still hovering just above the 109 handle as it struggles without much buying support despite being well above four hourly ATR support. This remains a bullish chart picture but again, requires a catalyst to get moving as Yen traders remain in wait and see mode:

The Australian dollar broke out more violently, helped by commodity prices as well, almost getting through the 78 handle as it tries to finish yet another wildly oscillating trading week.  As I said yesterday, a big swing above trailing ATR resistance at the 77.60 level was on the cards and here we are but momentum is now overbought as price has been unable to get back to the previous weekly highs as the 78 handle proper:

Oil prices failed to continue their rebound with yet another minor reversion overnight with Brent falling back to just above the $68USD per barrel level. The previous price move almost took out resistance overhead at the former highs which I’ve been saying is the real level to watch out for, with daily momentum requiring another kick into the properly overbought stage before engaging again – possibly a good buy low point here:

Gold was finally able to break above the psychologically important $1800USD per ounce level and it did so in style, finishing at the $1814 level this morning. The signs were all there with daily momentum in a nominal overbought mode and price bunched up at the previous resistance level with no new lows, now watch for everyone to rush in and start a new trend here – but be wary of tonight’s jobs report which could be USD hawkish:



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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  1. SpunkyMEMBER

    Dow Jones, Jones
    Calling Dow Jones
    Dow Jones, Dow Jones
    Wake up now
    Wake up now