While there was more hawkish signals from central banks overnight, namely the ECB, risk sentiment finally stabilised as Wall Street made a few gains after a week of selling. The USD rose slightly against most of the major currency pairs again, continuing to push the USD Index higher although the Australian dollar stabilised somewhat following the post RBA slump. Interest rate and bond markets are still confirming many more rate rises on the way, with the 10 year Treasury lifting again past the 2.6% yield level. Commodities sold off slightly across the board with WTI below $100USD per barrel while Brent crude lost nearly 1%, to remain just above that psychologically important level. Gold firmed to lift slightly just above the $1930USD per ounce level.
Bitcoin continued its selloff, with price pushing down to daily ATR support at just above the $43K level, which takes it back to former resistance, now support at the January and February highs:
Looking at share markets in Asia from yesterday’s session, where mainland Chinese share markets sold off sharply into the close, the Shanghai Composite eventually falling 1.4% to 3236 points while the Hang Seng Index lost nearly 1.3% to 21808 points. The daily chart of the Hang Seng Index was indicating a potential breakout having been supported at the 21200 level but the attempt to clear very strong resistance at the 22600 point level next continues to falter here as momentum wanes. Watch the low moving average to break like in other markets with similar structures:
Japanese stock markets continued their own selloff with the Nikkei 225 falling over 1.5% to 26888 points. Futures are indicating some stability on the open despite a weaker Yen as daily momentum reverts sharply from its slightly overbought status. Price has definitively rolled over back to weekly resistance at the 27500 point level and may begin to fall below the previous February highs, with that low moving average now broken through with all the signs of a breakdown:
Australian stocks were not able to stave off the selling with the ASX200 closing 0.6% lower, remaining well below the 7500 point level to finish at 7441 points. SPI futures are up nearly 50 points however as Wall Street found some strength and the lower Australian dollar provides a short term buffer. The daily chart was showing a lot of potential with daily momentum still quite strong but price is finding stiff resistance at the former highs from December last year:
European shares continued their own selloffs but eased back with the Eurostoxx 50 index only losing 0.6% lower to 3802 points. Price was firming here at the 3800 point zone with building indications of breakout potential but as I said previously, momentum is key and required a proper overbought reading . This could be capitulation as price breaks below the trendline and the low moving average, but watch for potential support to build at the 3700 point level:
Wall Street at first fell back but then managed to put some gains although the NASDAQ put in a scratch session, while the S&P500 put on 0.4% to close at exactly at 4500 points. Price action on the four hourly chart is quite volatile with wide ranging sessions that definitely create a picture of a battle between bulls and bears. The break below previous support at the 4500 point level maybe shortlived as the BTFD crowd step in but this is messy:
Currency markets continued to see a slightly stronger USD although only small gains were made with Euro still slowly deflating, absorbing the recent ECB minutes. The union currency is still below the 1.09 handle proper, with the now two week long reversal keeping it line with its longer term downtrend – watch for another potential breakdown if no new four hour session highs are made shortly:
The USDJPY pair continued its firm consolidation above the 123 handle overnight, almost breaching the 124 level as this weekly uptrend remains intact. This sees price action clearing trailing ATR overhead resistance with the slight possibility of heading back to the previous high from late March. This is now setting up another upside potential move here given the total lack of Yen buying thats now evident interally:
The Australian dollar has possibly finished its pullback from its post RBA euphoria, still maintaining below the 75 handle as the last few sessions hover at the 74.80 level. This drop could be shortlived with more upside potential building as commodity prices are likely to rebound in the wake of more Russian sanctions, but price will always lead the way so watch for another potential break below weekly support:
Oil markets continue to sell off with WTI now cracking below the $100USD per barrel level while Brent is closely following, finishing at $101 level overnight after breaking support at the $103 level. As I’ve contended for a while now, the charts of oil leading up to and through this conflict are classic technical bubbles with the second peak lower than the first. This provide a potential continuation move here to flop down to the $100 level as daily momentum reverts back into negative readings:
Gold was solid overnight, not making a new session low but not moving that much higher, finishing at the $1931USD per ounce level. Price is maintaining itself above the psychologically important $1900USD per ounce level with momentum still basically neutral, but this still requires a close above the high moving average at the $1930 area required soon or this will rollover swiftly:
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!