Wall Street advanced once more although the broader S&P500 just missed out on making a new high with tech stocks again leading the way. European bourses were somewhat mixed on the periphery but also performed well. The USD is now trying to get out of its weak short term cycle against the major currency pairs with Euro stumbling a little while Yen unexpectedly sold off in the middle of the session. Meanwhile the Australian dollar is just holding on above the 62 cent level as the rate differential dynamic starts to make a play.
10 year Treasury yields lifted nearly 3 points to almost return above the 4.6% level while trading in oil was again somewhat subdued with Brent crude retracing back below the $79USD per barrel level. Gold also took a breather as it rests strongly above the $2700USD per ounce level.
Looking at stock markets from Asia in yesterday’s session, where mainland Chinese share markets are moving sharply lower in afternoon trade with the Shanghai Composite down 0.8% or so as it almost breaks below the 3200 point level while the Hang Seng Index is also off, down more than 1.6% as it retraces well below the 20000 point level.
The Hang Seng Index daily chart shows how resistance formed around the 21000 point level with only one false breakout in late November squashed back to the 20000 point level where price action has stayed since. This was setting up for another potential breakdown here as price oscillated downward but has turned into an impressive bounce – can it be maintained?
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Japanese inventory markets are the standouts nonetheless regardless of the upper Yen with the Nikkei 225 closing 1.5% increased at 38585 factors.
Value motion had been indicating a rounding high on the each day chart with each 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 probably on the playing cards however resistance is firming:
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Australian shares are lifting barely throughout the board with the ASX200 closing some 0.3% increased at 8429 factors.
SPI futures nonetheless are down some 0.4% regardless of the stable lead from Wall Avenue in a single day so we might see a continuation breakout sample right here immediately. The each day chart sample and brief value motion suggests continued strikes above resistance overhead on the 8300 level degree:
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European markets have been capable of make some critical good points throughout a lot of the continent because the Eurostoxx 50 Index lifted practically 0.8% increased to get again above the 5200 level degree, ending at 5204 factors.
This was seeking to flip into a bigger breakout with help on the 4900 level degree fairly agency with resistance unable to breach the 5000 level barrier in current months. Value had beforehand cleared the 4700 native resistance degree because it seeks to return to the earlier highs as momentum tries to choose up strongly right here with the 4900 level degree turning into sturdy help:
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Wall Avenue was capable of proceed its uptrend in a single day with the NASDAQ up practically 1.3% whereas the S&P500 superior some 0.8% increased to complete at 6086 factors.
Quick time period value motion was trying considerably ominous earlier than Friday evening with a triangle sample and help on the 5900 level collapsing as the underside pickers stood apart to make a brand new low however brief time period resistance has now been cleared with this one off transfer. The New 12 months excessive seems to be the brand new help degree doubtlessly?
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Forex markets had been wavering the sturdy USD temper earlier than the tip of final week with King Greenback nonetheless dominating since the latest NFP print however weak spot has once more returned regardless of strolling again of tariff discuss. Nearly all of the undollars superior once more with Euro leaping neatly above the 1.04 degree and staying there in morning commerce.
The union forex is simply holding on to this uptrend however is discovering some staunch overhead resistance on the 1.04 deal with correct with overbought momentum now in retracement mode. Look ahead to a possible reversal right here:
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The USDJPY pair was capable of break a small breakout in a single day above the 156 deal with on non permanent USD power however will probably be attention-grabbing to see if this holds on the Asian open this morning with brief time period resistance looming overhead.
Quick time period momentum has reverted out of extraordinarily overbought settings however is now totally entrenched in unfavorable settings as value seeks the to interrupt beneath the 155 degree however as I warned final week, the potential for a rebound was constructing right here, though it seems to be a lifeless cat bounce at finest:
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The Australian greenback continues to be depressed within the medium time period however is trying higher within the brief time period albeit on USD weak spot because it held nicely above the 62 cent zone in a single day with some slippage within the early hours this morning.
The potential comply with by to the excessive 62’s because it nearly hits the 200 day transferring common (higher black sloping line) signifies some likelihood of a medium time period reversal, however that is excessive threat going into the dwell February RBA fee assembly – look ahead to a rejection at just under the 63 cent degree as an alternative:
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Oil markets couldn’t proceed their breakout from Friday evening with Brent crude retracing again beneath the $79USD per barrel degree in a continued welcome pullback after being so overbought in current weeks.
The each day chart sample has damaged out of its spring formation with brief time period momentum bursting into overbought territory with a run as much as the $80 degree now full, however wants one other breather first as this seems significantly overdone and more likely to slip within the coming classes:
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Gold is now nicely again on observe after lately operating out of steam because it made additional inroads above the $2700USD per ounce degree lately however had a light pause in a single day after closing above the $2750 degree.
Value motion had been accelerating in confidence in early December as new ranges of help have been being created no matter USD power however this pullback and rebound each had been preventing an excessive amount of below the $2700 zone so I’ve been skeptical of any upside potential. Nevertheless that is trying extra attention-grabbing:
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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 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 value away from the statistical imply or “typical” value to point overbought (far above the imply) or oversold (far beneath the imply)
Low/Excessive Transferring 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 concerning financial coverage (setting rates of interest)
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DOE: US Division of Vitality
Uncle Level: or cease loss level, a degree at which you’ve clearly been flawed in your place, so cry uncle and get out/flawed in your place, so cry uncle and get out!
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