Macro Morning

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Wall Street put in new record highs as the wobbly nature of risk markets for the past few weeks finally relented with an ebb to the upside. The latest Bank of England meeting was a bit of a fizzer with sovereign bond yields rising slightly alongside unimpressed currencies as Old Blighty remains steady as she goes, rip goes the printers… Commodity markets saw a little comeback in oil and copper prices, but gold is almost snapping under pressure to barely close above the $1800USD per ounce level.

Bitcoin surged above the $40K level overnight, almost matching the previous week’s intrasession high and is poised there this morning after the mid week breakout presaged on the four hourly chart. The question is can it hold on here and push higher:

Looking at share markets in Asia from yesterday’s session, where the Shanghai Composite faded going into the close, finishing down 0.4% to 3465 points while the Hang Seng Index also returned to its previous sell-phase, closing 0.8% lower to 26204 points.  The daily chart remains poised here as a potential bottom continues to form with a series of higher lows not yet confirmed by a substantial breakout above the 26700 point level, so we must be cautious:

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Meanwhile Japanese stocks rebounded on the weaker Yen, with the Nikkei 225 closing 0.5% higher at 27728 points. Futures are suggesting a breakout is possible here to finish the trading week above the descending triangle pattern which continues to offer clear enter/exit positions on the next move:

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Australian stocks put in a scratch session absorbing the latest trade balance and new Victorian lockdown news with the ASX200 lifting only 0.1% to close at 7511 points. SPI futures are essentially flat but that could change sharply due to the new highs on Wall Street as this bullish mood continues, with daily momentum remaining nicely overbought and the daily chart still good in the medium term:

European markets looked through the steady as she goes BOE meeting with the FTSE treading water while most other markets lifted slightly. The German DAX gained nearly 0.4% to close at 15744 points as price action continues to build well above previous daily ATR support at the 15300 point level. Momentum is now swinging into the overbought mode which suggests with another close above the high moving average more upside and a potential break of the previous weekly highs:

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Wall Street had broad gains across the three major markets with the NASDAQ up 0.8% while the S&P500 put in a new record high to close 0.6% higher at 4429 points. The four hourly chart is slowly getting out of its tight band of support and resistance at the 4360 and 4420 point levels respectively so maybe third time is a charm as late buyers step in on the nominal new record high:

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Currency market largely returned to low volatility overnight following the staid BOE meeting with Euro calming down and remaining quite depressed here just above ATR trailing support at the 1.1830 level. This is poised to breakdown quite soon as momentum slumps into the negative zone and price action intrasession suggests no buying support is evident:

The USDJPY pair has extended its gains following the previous wobble as it pushes through the mid 109 level and risk taking in Japanese stocks sees a continued breakout that could hit the 110 handle again soon. Four hourly momentum is getting almost overbought and price has cleared ATR trailing resistance as this barrels over the start of week point:

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The Australian dollar just can’t seem to breakout above the 74 handle with another aborted attempt overnight following the post Fed smackdown. The medium term price pattern is still bearish and this may have been confirmed with the inability to really stick it above that 74 cent resistance level but momentum remains positive in the short term and commodity prices are picking up yet again:

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Oil prices are trying to get out of their slump and avoid returning to the mid July lows as Brent bounced back about 1% higher overnight, getting back above the $71USD per barrel level. The retest of the previous lows at the $68 level is still in play here as momentum remains nicely oversold but watch for any action above the low moving average:

Gold continues to deflate with another wild ranging session overnight, briefly glancing below the $1800USD per ounce level before meekly returning just above this morning. Short term ATR trailing support has been breached and daily and four hourly momentum has switched from positive to negative so the failure to breach the $1830 level is having a deleterious effect here that could see it return to $1790 or below swiftly:

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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

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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)

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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!