Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

Wall Street fell for the fourth consecutive session, taking US bond yields and the USD with them with the latest ECB meeting proving no real change in stimulus direction while US initial weekly jobless claims came in as expected. Risk sentiment also remains mixed amongst commodity markets with oil dropping more than 2%, while copper lifted and gold prices stabilised.

Bitcoin is trying to find support at just above the $46K level after its recent flash crash/pump and dump from $52 to $42K with a small breakout overnight thwarted as price remains anchored. The four hourly chart shows trailing overhead ATR resistance at the $48K level the area to beat tonight going into the volatile weekend session  but there are no setup signs here for a swing play higher:

Looking at share markets in Asia from yesterday’s session, where the Shanghai Composite was able to climb slightly, finishing nearly 0.5% higher to 3693 points while the Hang Seng Index was put in sudden reversal mode, falling over 2% to close at 25716 points.  The daily chart was showing price trending higher but  struggling to decisively clear its own high moving average nor trailing ATR resistance above the 26000 point level so this sudden price move lower is not unexpected. We could see a further retracement back down to the 25000 monthly support level proper if short term support at 25500 does not hold:

Japanese stocks finally took a breather after its epic run higher with the Nikkei 225 finishing 0.6% lower at just above 30000 points. The daily chart showed how price was overextended, with the 30000 point level proving a natural resistance level which has been thwarted so far. I’m watching for a further retracement below the recent daily lows at the 29600 point level next:

Australian stocks had some of the steepest falls with the ASX200 selling off sharply to close nearly 2% lower at 7369 points. SPI futures are actually up nearly 20 points despite the falls on overnight markets with price wanting to come back after yesterday’s snap fall. Price still needs to clear its own high moving average with ATR support very solid at the 7360 point level:

European markets were all over the place with volatility spiking again, the FTSE moving the most by losing over 1% while the German DAX actually ending up slightly higher on the back of the ECB meeting, finishing 0.1% higher at 15623 poins. The daily chart is still showing a bearish mood however with a breakdown still quite possible below ATR support at the 15500 point level to make for a quick dip back to the 15000 point level reached in July:

Wall Street can’t gain any traction here with tech stocks properly selling off as well, with the S&P500 finshing 0.5% lower at 4493 points, breaking the key 4500 point level. The four hourly chart shows intrasession volatility that failed to push back above ATR support at the 4500 point level with the BTFD crowd dropping the ball. Watch for a retest below the 4490 point level as signs of a proper dip or even correction soon:

Currency markets got back to a mixed mood instead overnight in the wake of the ECB meeting with switching of USD strength and weakness throughout the session, seeing Euro lift slightly before retracing back to the lower 1.18 level this morning. Momentum is still in the negative zone but not yet oversold as price deceleration is pointing to a possible bottom here:

The USDJPY pair however fell straight out of bed and stayed there, falling right through the 110 handle on a safe haven Yen buying spree, almost making a new weekly low in the process. This was a classic swing short play that maybe over before it moves into a proper selloff, evidenced by only a slightly oversold momentum condition and not making that new weekly low:

The Australian dollar is slowly finding some support at the mid 73 level as its retracement from the Friday night over extension seems almost over. Short term momentum is oscillating in the negative zone but not yet showing a breakdown, although price has been unable to clear its own high moving average, thus negating all bullish upside potential.  This could go lower however if iron ore prices don’t pick up soon, regardless of the USD:

Oil prices can’t seem to get out of their minor retracement mode with Brent crude taking back its recent gains for another flubbing move below the $72USD per barrel level as it previously failed to make a new daily high in the last five trading sessions. This keeps price action hovering around the previous trailing ATR resistance level on the daily chart but not yet above the previous daily highs in late July/early August, so watch for daily momentum that has to maintain a positive setting here to have another go at the $75 level ahead:

Gold stabilised in its fall below the key $1800USD per ounce psychological level with a small upside result to finish at the $1794 level in a tight trading session. The rejection of overhead resistance at the $1830 level is quite telling and will likely see more selling going forward so watch for the ATR daily support level to be the target in this pullback:

 

 

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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