Risk markets were somewhat muted due to the US Thanksgiving holiday with Wall Street and US bond markets closed, with little change in USD as well in currency land. The Australian dollar is still fluctuating around its three month high but remains above the 65 cent level while Euro managed to get back above the 1.09 handle.
US bond markets were closed but futures are implying a slight rise in 10 year Treasury yields above the 4.4% level. Oil prices however saw a minor pullback as Brent crude was pushed below the $82USD per barrel level while gold also couldn’t hold on near the $2000USD per ounce level, consolidating at the $1990 level this morning.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets surged towards the close with the Shanghai Composite up 0.6% to 3060 points while in Hong Kong the Hang Seng Index has also put in a strong session, closing up nearly 1% higher at 17896 points.
The daily chart was showing a significant downtrend that had gone below the May/June lows with the 19000 point support level a distant memory as medium term price action remains stuck in the 17000 point range. Daily momentum readings are retracing back to positive settings despite Friday’s reversal with the potential for a fill in rally here towards the ATR resistance at the 18000 point level:
Japanese stock markets are still bouncing back with the Nikkei 225 putting on almost 0.3% to 33451 points.
Trailing ATR daily support is a long way below the current bounce that has now exceeded the September highs at the 33000 point level with daily momentum still in the overbought zone but not over-extended. I’m watching correlations with Wall Street and Yen to see if there is more upside here:
Australian stocks were unable to gain any positive momentum with the ASX200 closing some 0.6% lower at 7029 points.
SPI futures are slightly higher again in line with mild lifts in Wall Street futures so we should see the 7000 point level continue to firm as daily support. The daily chart is trying to look more optimistic here in the medium term with short term price action filling a hole against the tide, but sideways at best so far:
European markets were able to find some positive momentum despite a closed Wall Street with the Eurostoxx 50 Index lifting more than 0.2% to finish at 4361 points.
The daily chart shows weekly resistance at the 4300 point resistance level nearly taken out with this large bounce setting up for further gains if that level is pushed aside proper. Support at the 4250 level should be quite firm on any pullback but I’m watching the much higher Euro possibly providing a headwind as the week progresses:
Wall Street was closed for Thanksgiving with S&P500 futures holding a little higher this morning, indicating a starting point tonight well above the 4550 point level.
Short term momentum was overextended as price action bounced strongly off the recent low at the 4100 point level for the potential for a retracement back to trailing ATR support on the four hourly chart building here. Watch the 4500 point level to hold though:
Currency markets were able to catch relief with US traders away from their desks with USD moving slightly lower as a result against most of the undollars with Euro inching back above the 1.09 handle.
The recent consolidation was after the union currency was able to fend off more Fedspeak in recent weeks and remain in a bullish, albeit neutral condition. Support at the recent weekly lows around the 1.06 level was not tested with new short term support upgraded to the 1.07 mid level at a minimum, but there could be a sharp short term reversal here to ATR support:
The USDJPY pair continued its bounce back, this time pushing well above the November lows to get back above the 149 handle overnight after decelerating prior to the release of the FOMC minutes.
Four hourly momentum has punched its way out of nearly extreme oversold settings on the lower USD with price action suggesting a swing play here that could push beyond the 149 level but I suspect we need another catalyst to get things moving:
The Australian dollar was again resilient overnight with the USD still not really pushing it around like other pairs with price action still stuck near the mid 65 cent level.
The Pacific Peso remains under medium and long term pressure but was able to test the mid 63 level following the RBA’s recent rate hike with momentum now overbought and looking very positive as we continue this new trading week, but watch for a potential pullback to the 65 handle proper:
Oil markets remain in flux with the growing conflict in the Middle East and potential OPEC cuts adding to volatility with a tight session overnight that eventually saw Brent crude finishing below the $82USD per barrel level.
After almost reaching $100 in mid September, price was looking to return to the August levels around the $85 area where a point of control had been established before the recent breakout. Daily momentum is still in oversold settings with this failed test of support at the August level setting up for further falls below:
Gold is still holding on to its recent advances as it remains on trend despite the decoupled USD correlation against other undollars, falling back below the $2000USD per ounce level briefly where it sits this morning.
Daily support is building again here as the four hourly chart shows short term resistance (upper horizontal black line) the area to truly beat again:
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!