Last night saw USD surge against all the major currency pairs on the back of a very positive US retail sales print, with Wall Street almost returning to its previous record highs, as a much lower Euro buoyed European stocks. Treasury yields continued to lift above the 1.6% level again while gold pulled back slightly after floating along above the $1850USD per ounce level. Other commodity markets were mixed with oil futures lifting nearly 1%, copper falling another 1% while iron ore had a small uplift to get back to the $90 level.

Bitcoin and other crypto nonsense were hit hard overnight with the former losing more than 10% at one stage as the short term price picture following a recent record high starting to look like a bearish double top pattern. The daily chart shows that ATR support is not that far away and if price cannot get back above the previous high at the $62K level it could start another large rout:

Looking at share markets in Asia from yesterday’s session, where mainland Chinese shares were quite mixed with the Shanghai Composite down 0.3% to close at 3521 points while the Hang Seng Index went the other way with a surging breakout, closing over 1.2% higher at 25713 points. Price action has now followed through on the one-day breakout reversal, with hesitation over the medium term downtrend starting to be pushed aside. This is nicely solid close above the high moving average with the potential to get back to the 26300 point previous high:

Japanese markets were stuck lacking any direction, with the Nikkei 225 barely closing 0.1% higher at 29808 points. Futures are indicating a slightly positive start to the session as Yen sold off appreciably (sic) overnight, with daily momentum positive and indeed, slightly overbought but its all about resistance overhead at 30000 points looks way to strong here to get things moving back to the September highs:

Australian stocks were the odd ones out after the reaction to the latest RBA minutes with the ASX200 closing 0.7% lower at 7420 points. SPI futures are up about 20 points so some of this loss will be taken back but there’s a lot of short term resistance building here, despite a lower Aussie dollar and mixed commodity prices. I’m watching for any falls below the 7400 point level here:

European markets were somewhat mixed at the periphery with the FTSE still falling despite a lower Pound Sterling, but it was all about the German DAX which built on its previous proper finish, lifting more than 0.6% to close at 16248 points. Momentum is nicely overbought and pushing the market well above the 16000 point level with the daily chart looking extremely bullish now as a much lower Euro provides a steady tailwind:

Wall Street finally lifted out of its start of week funk with a clear win across all three bourses, with the NASDAQ up 0.8% to almost return to its previous high while the S&P500 lifted 0.4% to match its high, closing right on the 4700 point level. The four hourly chart had shown price still hovering below last week’s intrasession and record high before last nights retail sales print giving it the catalyst to get back on track and send PE to the moon:

Currency market volatility continues to weigh on the side of the USD, with the DXY (index) up more than 0.5% and at a 16 month high, mainly due to the battering that Euro has suffered recently. The union currency was swamped overnight, taking it down to a new monthly low right on the 1.13 handle. Momentum is now back to nicely oversold levels as no buyers are evident whatsoever – again this overdone price action is likely going to resolve into a pause or a minor relief rally before another leg down:

The USDJPY pair has turned its minor breakout through the 114 handle into a surge that almost took it to the 115 level overnight, after previously bouncing off the Friday session lows and now more than exceeding last weeks highs. Short term momentum is nearly off the charts, so expect a minor retracement to develop here but the 114 level is likely to prove steady support going forward now:

The Australian dollar flopped in the wake of the strong USD, pushed straight through the 73 level overnight after rejecting overhead resistance from its little start of week relief rally. The continued pressure on iron ore and other commodities prices continues to weigh heavily against the USD pressure as well for the Pacific Peso, so watch for a return to the previous weekly low at the 72.70 level and then possible a new breakdown below:

Oil crude futures rose marginally across the complex, finding some buying support with Brent lifting 0.8% to finish back above the $82USD per barrel level. Price action had been deflating following the previous false breakout move but its obvious that support remains firm at the $80 level or thereabouts, with a clear uncle point at ATR support. Daily momentum is still only barely positive however, so only positioning for a pre-breakout move makes sense here for risk swing traders:

Gold couldn’t hold back the strong USD overnight with a small fall back to the $1850USD per ounce level that was not as severe as the routs in other undollars. This comes after price action that was clearly well overbought and the completion of a bearish rising wedge pattern on the four hourly chart, but short term support remains firm here, at least at the $1800 to allow a proper retracement:

 

 

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!