Last night saw the release of the latest EU flash inflation figures which imply some building deflationary pressures while the latest US factory orders blew up to a new low, reinforcing the damage done by the Trump regime’s tariff “plan”. But reality didn’t matter to equity markets as they reacted to speculation around potential trade deals and the potential pushback against the Trump’s Terrifically Terrible Tax bill in the US Senate. The USD came back across the board due to positive comments around a potential China-US trade deal with the Australian dollar pushed back to the mid 64 cent level.
Oil prices have regained some strength with Brent crude now holding above the $65USD per barrel level while gold was unable to make further gains on its Friday fightback as it retraced back to the $3350USD per ounce level overnight.
Looking at stock markets from Asia from yesterday’s session, where mainland Chinese share markets returned from their long weekend with the Shanghai Composite lifting 0.4% while the Hang Seng Index has jumped some 1.5% to get back above the 23000 point level.
The daily chart shows a near complete fill of the March/April selloff although momentum is now picking up again and remains slightly overbought as the 90 day “relief” continues without any further positive news. Watch for any crack below the low moving average or 23000 point level:
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Japanese inventory markets have been on the backfoot as a consequence of BOJ speak with the Nikkei 225 barely making headway to shut at 37446 factors.
Each day worth motion was wanting very eager certainly though day by day momentum has slowed down considerably this week after clearing resistance on the 36000 level stage with one other fairness market that appears stretched and able to rollover once more right here. Watch ATR help intently which seems to be firming in latest classes:
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Australian shares have been in a position to placed on some regular good points towards the RBA minutes backdrop with the ASX200 closing 0.6% increased at 8466 factors
SPI futures are up almost 0.3% on the robust end result on Wall Avenue in a single day. The day by day chart sample continues to be suggesting additional upside continues to be potential because the inverted head and shoulders sample is sort of full with the RBA reduce serving to increase this however correlation with different threat markets will come into play right here – watch as day by day momentum is firming once more:
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European markets have been lastly in a position to proceed their rebounds with robust strikes throughout the continent because the Eurostoxx 50 Index completed almost 0.4% increased at 5375 factors.
Assist on the earlier month-to-month help ranges (black line) at 5100 factors is now firmly held with the bounce off the 2024 lows on the 4400 level stage indicating a large fill of this dump and pump motion with the previous February highs almost full. A rollover may very well be forming right here so look ahead to help on the 5200 level stage correct:
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Wall Avenue had one other sturdy session with good points throughout the board because the NASDAQ lifted greater than 0.8% increased whereas the S&P500 completed up almost 0.6% to shut at 5970 factors.
The 4 hourly chart was beforehand supporting a possible slowdown motion right here that may very well be translating to a prime on the day by day chart as costs attempt to get again above the pre-Trump Tariff Tax day. That is once more wanting like a TACO commerce as resistance appears weak overhead:
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Foreign money markets had been transferring towards King Greenback amid the tariff chaos however noticed some pushback throughout all of the undollars in a single day, Yen notably on overshoot however Euro additionally was pushed again beneath the 1.14 stage after lately making a brand new weekly excessive.
The union foreign money was pushed again beneath the 1.13 deal with beforehand however help bounced again on the 2023 and 2024 highs with a breakout above trailing ATR resistance on the 4 hourly chart. Medium time period momentum stays very optimistic right here regardless of final evening’s retracement:
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The USDJPY pair had a major rebound within the Asian session yesterday on BOJ feedback and was in a position to maintain on after which prolong these good points when some Fed members in a single day indicated they’re wanting by means of July earlier than making any fee cuts. The pair jumped a full deal with as much as the 144 stage consequently.
I nonetheless contend we have to look ahead to any sustained break beneath the 139 stage which completes a multi 12 months bearish head and shoulders setup that might see the 110 to 120 stage revisited. Watch the brief time period help that might come underneath strain right here first:
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The Australian greenback had been pushed down on USD resurgence after blasting by means of the 65 cent stage beforehand and has suffered an analogous destiny once more, falling again to the mid 64 cent stage in a single day.
Stepping again for an extended perspective (and looking out on the trusty AUDNZD weekly cross) worth motion has remained supported by the 200 day MA (transferring black line) after bouncing off a close to new 5 12 months low. Control short-term help on the 63 cent stage and watch right this moment’s GDP print rigorously:
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Oil markets are nonetheless attempting laborious to get again on monitor and the newest OPEC manufacturing increase ought to have seen a fall however as a substitute costs stay elevated in a single day with Brent crude staying above the $65USD per barrel stage.
The day by day chart sample exhibits the publish New Yr rally that received a little bit out of hand and now reverting again to the sideways decrease motion for the latter half of 2024. The potential for a return to the 2024 lows continues to be constructing right here as home demand within the US is prone to proceed to say no because the Trump Taxes take impact however look ahead to any breakout above the $66-67 zone:
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Gold had briefly retraced beneath the $3300USD per ounce stage after deflating all week however managed like the opposite undollars to search out some stability on Friday evening, though it too had a small setback in a single day to return to the $3350 stage with robust inner help.
Quick time period help had firmed immensely in latest classes displaying actual energy however momentum turned significantly overbought so this was inevitable as worth motion has reverted again to the uptrend line from the April lows. This line seems damaged and we may very well be seeing a extra sustained breakout constructing on USD weak point:
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Glossary of Acronyms and Technical Evaluation Phrases:
ATR: Common True Vary – measures the diploma of worth volatility averaged over a time interval
ATR Assist/Resistance: a ratcheting mechanism that follows worth beneath/above a pattern, that if breached exhibits above common volatility
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CCI: Commodity Channel Index: a momentum studying that calculates present worth away from the statistical imply or “typical” worth to point overbought (far above the imply) or oversold (far beneath the imply)
Low/Excessive Shifting Common: rolling imply of costs on this case, the high and low for the day/hour which creates a band across the precise worth motion
FOMC: Federal Open Market Committee, month-to-month assembly of Federal Reserve concerning financial coverage (setting rates of interest)
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DOE: US Division of Vitality
Uncle Level: or cease loss level, a stage at which you’ve clearly been unsuitable in your place, so cry uncle and get out/unsuitable in your place, so cry uncle and get out!
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