Risk markets remain on edge as the Ukrainian war rolls on and the impact on global finance to the locking out of Russia continues to unfold. European stocks remained volatile, particularly on the periphery while Wall Street couldn’t advance on its Friday night bounce after some very big moves in futures beforehand. Currency markets are seeing an inversion in USD strength as safe haven buying in Yen picks up, while commodity currencies including the Aussie and Loonie are soaring higher as oil again pushes more than 3% higher alongside iron ore while gold remains tentatively above the $1900USD per ounce level.
After stabilising a bit, Bitcoin has shot out of the gates to launch itself past the $41K level, taking out the previous weekly high. The four hourly chart had shown price poised here just below the previous ATR resistance level as it looks like a lot of Russians are buying up crypto as the Ruble collapses:
Looking at share markets in Asia from yesterday’s session, where mainland Chinese shares wavered at first before a late rally saw the Shanghai Composite lift 0.3% to 3456 points while the Hang Seng Index was off more than 1%, closing at 22452 points. Price action on the daily chart shows price at the 2020 lows with the possibility of more downside, although daily candles are suggesting intrasession buying to help support it at monthly support at the 22600 point level:
Japanese stock markets were in retreat as well, with the Nikkei 225 down 0.2% to 26418 points as Yen safe haven buying was offset by overall bifurcation of risk. Futures are suggesting a small rise on the open to remain well above the 26000 point level, but the daily chart is still not looking good but in the short term, as a higher Yen overnight could prove a tough headwind as price remains anchored here at or below the January lows:
Australian stocks finished higher but only just as the surprise retail sales figure helped jump things along, with the ASX200 managing to clawback above the 7000 point level, up 0.4% to 7028 points. SPI futures are up 0.3% and combined with daily price action we could see some stability creep in here, although the rocketing Australian dollar is not helping at all. There is still considerable resistance overhead at the previous weekly/monthly support levels so watch daily momentum that needs to get back into the positive zone soon:
European shares had another volatile session session, this time mainly to the downside with the Eurostoxx 50 index eventually finishing 1.2% lower at 3924 points, with the daily futures chart showing not much upside potential here despite that big bounceback previously. Price remains well below the former weekly ATR support at the 4000 point level and momentum is still cooked on the downside, so watch for volatile moves here on macro news:
Wall Street was all over the place again with tech stocks the only ones advancing as the NASDAQ gained 0.4% while the S&P500 faltered, finishing 0.2% lower at 4372 points. The four hourly chart looks more promising with a V-shaped bottom pattern quite evident with a neckline at the 4400 point zone which must be cleared soon, so watch the low moving average here as the uncle poin going ahead:
Currency markets remained volatile with the USD index gaining but only on gapping adventures in some undollars, with Euro getting back on track after a big gap on the Monday open seeing it almost match its Friday lows. Price almost rallied back up to the four hourly ATR resistance level at the mid 1.12’s but there’s a long way to go here for normalisation with momentum still not yet positive:
The USDJPY pair however had a more subtle selloff overnight as Yen safe haven buying accelerated again, sending the pair below the 115 level. Four hourly momentum had been extremely overbought but as I warned yesterday, there were signs at the low moving average on the four hourly chart for another reversal and here we are with the potential to retrace to last weeks low:
The Australian dollar also suffered a big gap, but then shook it off and rallied fast and hard back to last week’s intrasession high above the mid 72 level. Volatility is reigning here as commodity prices go haywire, particularly iron ore, so watch for a try again at the 73 handle as part of a multi week breakout pattern:
Oil markets tried to breakout again following the big pullbacks on Friday night on profit taking with Brent crude getting back above the $100USD per barrel level briefly but then retraced later in the session to finish at just above $98USD per barrel. I’m still wary of a lot of volatility here with profit taking to follow, so watch daily low moving average line or trailing ATR support that has held since breaking out post Xmas:
Gold continues to have a wild ride with its massive surge towards the $2000USD per ounce level seemingly ready to try again with another breakout overnight that was thwarted but still looking impressive here, finishing just above the $1908 level. It seem support is firming at the $1870 level, but I’m wary of momentum readings and intrasession selling that could be pointing to more consolidation ahead:
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!wrong on your position, so cry uncle and get out!