Wall Street advanced once more this time the broader S&P500 officially made a new high with tech stocks pulling back as European bourses also performed well. The USD is failing to get out of its weak short term cycle against the major currency pairs with Euro lifting back above the 1.04 handle while Yen has reversed its own short term selloff. Meanwhile the Australian dollar is slowly advancing above the 62 cent level despite the increased Trump Spittle around tariffs.
10 year Treasury yields were little changed remaining at the 4.6% level while trading in oil was again weak with Brent crude retracing back below the $78USD per barrel level in a minor corrective phase. Gold also took a breather as it rests strongly above the $2750USD per ounce level.
Looking at stock markets from Asia in yesterday’s session, where mainland share markets moved higher in afternoon trade with the Shanghai Composite up 1.4% or so as it breaks above the 3200 point level while the Hang Seng Index was off slightly, down 0.4% as it continues its retracement 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 once more with the Nikkei 225 closing greater than 0.8% larger at 38585 factors.
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 however resistance is firming:
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Australian shares are down throughout the board with the ASX200 closing some 0.6% decrease at 8378 factors
SPI futures nonetheless are up 0.3% because of the strong lead from Wall Avenue in a single day so we may see a filling sample right here at this time. The day by day chart sample and brief worth motion suggests continued strikes above resistance overhead on the 8300 level degree:
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European markets have been in a position to make some minor positive factors throughout a lot of the continent because the Eurostoxx 50 Index lifted 0.2% larger to stay above the 5200 level degree, ending at 5212 factors.
This was trying to flip into a bigger breakout with assist 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 select up strongly right here with the 4900 level degree turning into sturdy assist:
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Wall Avenue was additionally in a position to proceed its uptrend in a single day though the NASDAQ stumbled on the shut for a minor loss whereas the S&P500 superior some 0.3% larger to complete at 6102 factors, a brand new report excessive.
Quick time period worth motion was wanting considerably ominous earlier than Friday night time with a triangle sample and assist 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 to be turning into the brand new assist degree:
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Forex markets had been wavering the sturdy USD temper earlier than the top of final week with King Greenback nonetheless dominating since the newest NFP print however weak point has once more attributable to extra Trump Tariff insanity. Nearly all of the undollars superior once more with Euro getting again above the 1.04 degree and staying there in morning commerce, not fairly matching the intraweek excessive.
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 unable to maintain its current small breakout in a single day above the 156 deal with on non permanent USD energy because it retraces this transfer after which some in each session in a single day.
Quick time period momentum has reverted out of extraordinarily overbought settings however is now absolutely entrenched in damaging settings as worth 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 to be a useless cat bounce at greatest:
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The Australian greenback remains to be depressed within the medium time period however is wanting higher within the brief time period albeit on USD weak point because it held properly above the 62 cent zone in a single day with a correct go on the 63 cent degree as properly.
The potential comply with via 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 stay February RBA fee assembly – look ahead to a rejection at slightly below the 63 cent degree as a substitute:
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Oil markets at the moment are in a correct retracement after failing to proceed their breakout from Friday night time with Brent crude retracing again beneath the $79USD per barrel degree in a continued pullback after being so overbought in current weeks.
The day by 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 to be significantly overdone and more likely to slip within the coming classes:
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Gold is now properly again on monitor after lately working 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 assist have been being created no matter USD energy however this pullback and rebound each had been combating an excessive amount of below the $2700 zone so I’ve been skeptical of any upside potential. Nevertheless that is wanting extra attention-grabbing:
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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 development, that if breached reveals 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 Transferring 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 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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