Risk sentiment is riding the rollercoaster again, in the absence of any economic news as Wall Street pulled back overnight, taking back half of its Friday night gains and putting traders in hesitation mode for the Asian session today. The new found weakness in USD continued however with Euro lifting above the 1.01 level while the Australian dollar also got out of its funk to cross above 68 cents in the lead up to the release of the RBA minutes. Bond markets saw a loosening of yields with 10 year Treasuries back up to 3% again as US interest rate futures still imply a near 80bps rate rise at the next Fed meeting. Commodity prices were still volatile with Brent up more than 2% to recover above the $105USD per barrel level while copper lifting slightly as gold struggled again, falling back to the $1707USD per ounce level.
Looking at share markets in Asia from yesterday’s session, where mainland Chinese share markets lifted strongly into the close with the Shanghai Composite finishing up 1.5% to 3278 points while the Hang Seng Index surged more than 2.5%, closing at 20846 points. Sentiment was really waning on the daily chart with considerable overhead resistance creating a series of lower daily lows as price retraced below the early June lows around the 20600 point area before yesterday’s move. Daily momentum readings that were oversold have now reverted but this remains a swing play only until we see a substantial close above the high moving average proper:
Japanese stock markets were of course closed for yet another holiday. The daily chart however is suggesting a continued breakout brewing above stiff resistance at the 27000 point area with daily momentum finally able to get out of its negative funk. Price had made a new weekly high, which should support further upside here although the mixed lead from Wall Street won’t help:
