Macro Morning

See the latest Australian dollar analysis here:

Macro Afternoon

A quite night of thin trading overnight as Western markets exit the Easter break with Wall Street pulling back slightly although European shares were more bullish. All eyes remain on the Fed, with the 10 year US Treasury yield making a new nearly four year high above the 2.8% level. The USD rose again to a two year plus high, with Yen and Euro shooting to drastic new lows, with both the Kiwi and Australian dollar also under the pump despite a lift in commodity prices. Oil prices rose more than 1% higher on the Russian tensions with Brent jumping back above the $110USD per barrel while gold touched the $2000USD per ounce level but failed to hold there, likely to have another crack today.

Bitcoin remains in a depressed state, having sold off last week to be anchored around the $40K level after breaching daily ATR support at the $42K level in late March. The lack of confidence in the crypto world could see a further retracement down to the February lows at the $37K level next if the daily high moving average is not breached soon:

Looking at share markets in Asia from yesterday’s session, where mainland  Chinese share markets remain unsettled with the Shanghai Composite finishing 0.5% lower to breach the 3200 ponit level while the Hang Seng Index will reopen today after the easter break.  The daily chart remains stuck below very strong resistance at the 22600 point level with momentum pushing the market lower with continued moves below the low moving average likely if momentum remains neutral here for too long:

Japanese stock markets are looking to switch back to sell mode with the Nikkei 225 closing some 1% lower yesterday to 26799 points although futures are indicating a mild bounceback on the open as the ever weaker Yen provides a buffer. Daily momentum is still at a neutral level with price not yet retreating below daily ATR support but its still rejecting weekly resistance at the 27500 point level. This may see further falls and even a reversion back to the March low nearer the 24000 point level if the high moving average isn’t broken soon:

Australian stocks were closed over the Easter break, with the ASX200 quite steady here at the 7500 point level as SPI futures are up 10 points to begin a possibly strong new opening session. The daily chart continues to show a lot of potential with daily momentum still quite strong but price is finding stiff resistance at the former highs from December last year – watch that low moving average carefully that must hold;

European shares continue to go nearly nowhere, with a late charge seeing the Eurostoxx 50 index lift 0.5% higher to 3848 points but taking all the back in post close futures. I’ve been suggesting a capitulation maybe close here as depressed price action remains well below the trendline and the low moving average, finding substantial resistance overhead as momentum also remains negative. But so far, support has held around the 3700 point area so this could be a potential breakout point on good news:

Wall Street remains volatile with yet another breakout thwarted as both the NASDAQ and S&P500 put in scratch sessions after being up initially, the latter finishing at just below the 4400 point level again at 4391 points. Price action on the four hourly chart is continuing to show a series of steps down as the BTFD crowd fail to step in and shore up support with macro news still dominating as we head into another Fed meeting and rate rise soon. Watch the recent session lows around the 4400 point level to come under pressure again:

Currency markets continue to see a stronger USD with Euro rolling over yet again to break the point of control at the 1.09 handle and head below the 1.08 level. This keeps price action in line with its longer term downtrend, as short term momentum remains oversold and trailing ATR resistance continues to ratchet down – is parity on the radar?

The USDJPY pair has continued its own uptrend over Easter, making yet new highs to extend well above the 126 level overnight, ready to push even further. This keeps price action at new decade highs with no stopping apart from the occasional pause as Yen is dumped everywhere. Watch for momentum to potentially revert here from extremely overbought levels, but that trendline looks solid:

The Australian dollar continued to deflate over the break with a fall below the 74 handle now confirmed as we await the latest RBA minutes today. Price has broken below weekly support which does not bode well for any medium term uptrend potential if the RBA raises rates before the election (unlikely):

Oil markets steadied last week and then launched higher with Brent pushing right through the $110USD per barrel level, after finding strong support at the $98 level. This proves my contention of a possible rout wrong so far, with support at that last drawback level defended quite strongly as this bubble will just not pop. The next level to watch is the previous high at the $120 area:

Gold continues to find more support although it failed to close above the $2000USD per ounce level overnight,  finishing at the $1978 level instead as profit taking took over. Price action looks good here for more upside potential having successfully defended the psychologically important $1900USD per ounce level, but momentum is not yet overbought:

 

 

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!

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  1. Hugh PavletichMEMBER

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