Last night saw hesitation on Wall Street due to lower energy prices and a shorter trading week where the Federal Reserve will release its latest minutes. European shares also fell behind while in currency land, the USD was able to continue its recent lift higher against the major currencies with Euro pushed below the 1.03 level as the Australian dollar retraced down to the 66 cent level. US bond markets slipped with 10 year Treasury yields heading back above the 3.8% level while commodities were under pressure on all sides with crude oil dropping nearly 5% as Brent fell below the $81USD per barrel level while gold slipped slightly, drifting down to the $1740USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were struggling with the Shanghai Composite down nearly 0.7% at 3074 points while the Hang Seng Index also lost ground, closing 1.8% lower to 17655 points. The daily chart is showing a significant slowdown after having gained nearly 4000 points since testing the 2008 lows. Its pretty obvious that daily momentum was getting ahead of itself before reaching the magical 20000 point level so watch this retracement to continue to test the recent daily lows below the 18000 point level:
Japanese stock markets also put in scratch sessions again with the Nikkei 225 closing slightly higher, up 0.2% at 27944 points. The daily price chart was showing a breakout brewing as overhead resistance at the 27500 level is cleared but more wobbles are appearing here as the too strong Yen and lack of upside action on Wall Street hampers buying confidence. A potential pullback is building here below the trend line as price action stalls amid although daily momentum remains overbought. Support needs to hold at the 27500 point level:
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