Wall Street lifted slightly on a better than expected weekly initial jobless claim print in the US (led by the fact that you can’t be jobless if you’re in an ICE concentration camp or on a plane exiting the country) while oil prices dived 5% on news the Iranian strikes by the Trump regime were curtailed by the Israelis. The USD lifted solidly against most of the majors, particularly Euro while precious metal prices stabilised as the Australian dollar remains below the 67 cent level but is finding some support.
Looking at stock markets from Asia from yesterday’s session, where mainland Chinese share markets fell back with a poor afternoon session with the Shanghai Composite down more than 0.3% while the Hang Seng Index was off nearly 0.3% to close at 26923 points.
The daily chart of the Hang Seng Index showed a lot of wish washy action around the 26000 point level in the last couple of months with some recent weakness now turning into strength. The latest small bounce off support does have more momentum brewing but is facing resistance overhead:
Japanese stock markets finally pulled back after being bid strongly all week with the Nikkei 225 down nearly 0.5% to almost retreat below the 54000 point level.
Daily price action wavered a little during the BOJ hike in the previous weeks but has firmed up strongly with the 50000 point level forming key support although it has gotten ahead of itself. This looks like a launch point through longer term overhead resistance:
Australian stocks were the best performers in the region with the ASX200 lifting more than 0.4% to 8861 points. SPI futures however are off only slightly despite a small session higher on Wall Street overnight.
The daily chart pattern shows that short term support has been reinforced after a period of hesitation before Christmas with a bounceback above resistance at the 8800 point area now building:
European markets came back again with mild gains across the continent as the Eurostoxx 50 Index closed 0.6% higher to 6041 points, still keeping the recent rally intact but indicating some resistance building.
The market had been failing to make headway in recent months due to the too high valuations but short term support was very solid and has pushed well above recent highs to start 2026 with some gusto, helped by a much lower Euro:
Wall Street was able to eke out a slightly higher return, although gave it up in post close futures, with both the NASDAQ and the S&P500 gaining just 0.2% with the latter closing at 6944 points.
The daily chart showed a belated Santa rally that took back some of the gains to match the November highs but it still looking somewhat supported on the four hourly chart below with the potential to lift up towards the 7000 point level still being thwarted by geopolitical and other risk factors:
Currency markets continue to fail to reverse their pre-Xmas move against King Dollar as macro concerns over Iran/Venezuela/Greenland etc turn into a full safe haven play. The USD immediately strengthened on the better than expected initial jobless claims overnight with Euro pushed down to the 1.16 level with other majors also weakening across the board.
The union currency had already been pushed down to the 1.17 handle during the Xmas period and after a small bounceback put on a dead cat bounce here as the end of NATO looms on the horizon. Watch for a sustained break below the recent lows at the 1.16 level next:
The USDJPY pair pushed well above the 157 handle on the new year sessions, despite stronger inflation in Japan with a move above the 159 level at the start of the week held in check overnight as the pair steadied above the mid 158 level.
The previous price action was sending the pair beyond the March highs and had the potential to extend those gains through to start of year position at the 158 handle. A little heat has been taken out after being overbought but has more upside potential:
The Australian dollar was pushed down to the 67 handle on the NFP print on Friday night before a small bounce like all the other undollars on the Powell putdown but has since reversed although it is definitely respecting support (big black horizontal line below) with another attempt to get back above the 67 level overnight.
Price action was not looking good for the Pacific Peso in the medium term as the interest rate differential squeeze sent it back to the doldrums, but short term support is barely shoring up again so I don’t see a lot of upside here:
Oil markets have been on a multi week/monthly downtrend prior to the Venezuelan invasion but shot out of the gate last week with some big gains, which were then arrested swiftly overnight as the Israelis stepped in. Brent crude fell nearly 5% to below the $64USD per barrel with the potential for more falls if the Trump regime doesn’t start shooting soon.
The daily chart pattern shows an extended downtrend that is now well under threat and broken in the short term so watch for this to potentially turn into a proper reversal although it is well over extended in the short term:
Gold is in a holding pattern, albeit with a very bullish bias above the $4600USD per ounce level after some heat was taken out of silver prices in the last couple of sessions. But its pretty clear that gold is becoming a Minsky Metal yet again…
As I previously mentioned that after some stability, another large upside potential move was looming again for the shiny metal as the desire for USD dwindles and here we are, albeit very overbought as short term resistance forms slightly:
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!