Risk markets are again cautious as another Middle East conflict combined with mixed global PMI readings gave some pause to any further upside momentum on both sides of the Atlantic. While Wall Street nominally put in another record high, it was marginal at best with tech stocks retreating. The USD was mixed against the majors as Euro pulled back sharply below the 1.11 handle before a late recovery while the Australian dollar is still holding well above the 68 cent level but finding some resistance going into today’s RBA meeting.
10 year Treasury yields moved higher again to well above the 3.7% level while oil prices were relatively stable as Brent crude stayed just above the $75USD per barrel level. Gold finally broke through the $2600USD per ounce level for a new high.
Looking at markets from yesterday’s session in Asia, where mainland Chinese share markets have held on to some modest gains with the Shanghai Composite up 0.4% while the Hang Seng Index was slightly flat, falling 0.1% to finish at 18244 points.
The Hang Seng Index daily chart was starting to look more optimistic a few months back but price action has slid down from the 19000 point level and continues to deflate in a series of steps as the Chinese economy slows. Short term resistance is finally being pushed away here, as this break above the 18000 point level sets up for a run at the 20000 level:
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Japanese inventory markets had been closed for an extended weekend with Nikkei 225 futures suggesting a sluggish begin this morning.
Value motion had been indicating a rounding prime on the day by day chart with day by day momentum retracing away from overbought readings with the breakout final month above the 40000 level degree nearly in full remission. Yen volatility stays an issue right here, with a sustained return above the 38000 level degree from Could/June presumably on the playing cards as constructive momentum is lastly beginning to construct:
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Australian shares didn’t just like the native PMI prints with the ASX200 closing some 0.7% decrease at 8152 factors.
SPI futures are down barely reflecting the dearth of constructive temper on Wall Road in a single day. Brief time period momentum and the day by day chart sample was doubtlessly signalling a prime right here however value motion nonetheless exhibits a transparent breakout to new highs with momentum properly overbought and able to lengthen additional:
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European markets are nonetheless fighting a transparent shopping for sign however did managed a bit of upside later within the session because the Eurostoxx 50 Index closed 0.3% greater to 4885 factors.
The day by day chart exhibits value motion off pattern after breaching the early December 4600 level highs with day by day momentum retracing properly into an oversold part. This was seeking to flip into a bigger breakout with assist on the 4900 level degree fairly agency with resistance simply unable to breach the 5000 level barrier. Value had beforehand cleared the 4700 native resistance degree because it seeks to return to the earlier highs however momentum has retraced from being overbought to only barely constructive:
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Wall Road is once more struggling to seek out constructive momentum because the NASDAQ barely placed on any features whereas the S&P500 lifted simply 0.2% greater to shut at 5718 factors.
The 4 hourly chart illustrates the collection of breakouts because the early September lows as Fed signalling is doing its factor. Value motion had a small pause earlier than the Fed assembly however its now all methods go however look ahead to a doubtlessly small pullback on an excessive amount of exuberance too quickly, as overbought momentum signifies:
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Foreign money markets decreased considerably in volatility following the Fed assembly final week and stay of their anti-USD temper however King Greenback had one thing to say in a single day because the PMIs got here by with Euro taking a big hit again to the pre-Fed degree simply above the 1.11 deal with.
The union foreign money had been structurally supportive earlier than the Fed assembly however this double plunge since does point out some weak point within the quick time period as momentum pushes again into the detrimental zone. It appears overhead resistance on the 1.11 deal with will not be but defeated:
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The USDJPY wasn’t capable of push farther from its publish Friday night time restoration because it retraced again under the 144 degree because it discovered extra upside resistance.
Long term momentum was suggesting a doable backside was brewing because the BOJ needs to get this volatility beneath management, so this bounceback might have legs to the 144 degree or greater however might be dominated by shorter time period positioning:
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The Australian greenback is not only holding on however attempting arduous to increase its climb above the 68 degree as merchants await at present’s RBA assembly.
Throughout June the Pacific Peso hadn’t been capable of make the most of any USD weak point with momentum barely within the constructive zone however that has modified in latest weeks with value motion lastly getting out of the mid 66 cent degree that acted as some extent of management. The potential for a pullback right here has nearly disappeared as resistance overhead is seemingly swept apart:
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Oil markets stay depressed amid OPEC’s warning and ought to be constructing in volatility because the Israelis shoot something that strikes within the Center East, with Brent crude holding simply above the $74USD per barrel degree, as this little bounceback continues to look convincing.
After breaking out above the $83 degree final month, value motion had stalled above the $90 degree awaiting new breakouts as day by day momentum waned after which retraced again to impartial settings. Every day ATR assist had been damaged with quick time period momentum remaining in detrimental territory, organising for this sharp retracement and continued selloff:
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Gold is having a stunning time of it because it continues to beat out the remainder of the undollars because it holds on properly above the $2600USD per ounce degree after a convincing transfer on Friday night time, slowing down barely within the quick time period on the $2630 degree..
The long term assist on the $2300 degree remained agency whereas quick time period resistance on the $2470 degree was the goal to get by final week and has been the anchor level for this week’s value motion. Momentum is wanting so much higher now within the quick time period, barely overbought in fact:
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Glossary of Acronyms and Technical Evaluation Phrases:
ATR: Common True Vary – measures the diploma of value volatility averaged over a time interval
ATR Assist/Resistance: a ratcheting mechanism that follows value under/above a pattern, that if breached exhibits above common volatility
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CCI: Commodity Channel Index: a momentum studying that calculates present value away from the statistical imply or “typical” value to point overbought (far above the imply) or oversold (far under 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 value motion
FOMC: Federal Open Market Committee, month-to-month assembly of Federal Reserve relating to financial coverage (setting rates of interest)
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DOE: US Division of Power
Uncle Level: or cease loss level, a degree at which you’ve clearly been mistaken in your place, so cry uncle and get out/mistaken in your place, so cry uncle and get out!
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