Big drama on Wall Street overnight as AI dragged tech stocks down heavily with the NASDAQ losing nearly 4% as Nvidia and others lost significant ground. Broader industrial shares were hit as well with European stocks also failing to advance, sending a dark signal for Asian markets on this morning’s open. The USD is getting weaker by the day as Trump’s isolationist policies continue to shake the global system with Euro almost back above the 1.05 handle while Yen is also strengthening. Meanwhile the Australian dollar is in a holding pattern just above the 62 cent level after a big weekend gap down and lack of trading volume.
10 year Treasury yields saw a big bid on the DeepSeek suck with a 10 point turnaround back down below the 4.5% level while trading in oil was again weak with Brent crude retracing back below the $76USD per barrel level as its corrective phase gathers pace. Gold also slumped back below the $2750USD per ounce level after almost hitting the $2800 level on Friday.
Looking at stock markets from Asia in yesterday’s session, where mainland share markets were largely unchanged with the Shanghai Composite closing near the 3250 point level while the Hang Seng Index was able make modest gains, up 0.6% to get back above 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 had been combined with the broader Nikkei 225 closing practically 1% decrease at 39565 factors, reversing the Friday session positive factors.
Worth 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 stage virtually in full remission. Yen volatility stays an issue right here, with a sustained return above the 38000 level stage from Might/June probably on the playing cards however resistance is firming:
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Australian shares had been closed for Straya Day lengthy weekend vacation.
SPI futures are indicating a wobbly begin to the truncated buying and selling week on the rout from Wall Avenue in a single day so we might see a reversal sample right here at the moment. The day by day chart sample and quick value motion suggests resistance overhead on the 8300 level stage is beginning to weigh available on the market:
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European markets had been unable to make any positive factors throughout many of the continent because the Eurostoxx 50 Index misplaced practically 0.6% to retrace under the 5200 level stage, ending at 5188 factors.
This was trying to flip into a bigger breakout with assist on the 4900 level stage fairly agency with resistance unable to breach the 5000 level barrier in latest months. Worth had beforehand cleared the 4700 native resistance stage because it seeks to return to the earlier highs as momentum tries to choose up strongly right here with the 4900 level stage turning into sturdy assist:
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Wall Avenue gapped down over the weekend and stored on promoting off in a single day on the Deepseek AI drama because the NASDAQ stumbled practically 4% decrease to erase its positive factors YTD whereas the S&P500 misplaced practically 2% to complete at 5999 factors.
Worth motion was trying good main as much as the Trump inauguration but it surely appears unhealthy luck is colored Orange as shares topped out on Friday evening earlier than sliding quick into the oversold zone. This has all of the emblems of a continuation under the 6000 level assist stage:
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Forex markets are really placing King Greenback as an alternative since the latest NFP print as weak spot spreads as a result of Trump Tariff and isolationist insanity towards Europe. Nearly all of the undollars superior once more with Euro practically getting again above the 1.04 stage and staying there in morning commerce, making a brand new weekly excessive.
The union forex is holding on to this uptrend and though there may be some overhead resistance momentum stays in overbought mode. Look ahead to a possible reversal right here on any shut under the 1.0430 stage within the quick time period:
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The USDJPY pair broke down from its weak Friday evening maintain over the weekend hole to get crushed again to the 153 deal with earlier than a late reprieve in a single day noticed it return to the mid 154 stage.
Brief time period momentum is now extraordinarily oversold with a probable bounce again however that is most likely a useless cat bounce at greatest because the weak USD meme is entrenched right here:
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The Australian greenback remains to be depressed within the medium time period however is trying higher within the quick time period albeit on USD weak spot alone because it held properly above the 62 cent zone in a single day with a correct go on the 63 cent stage final week nonetheless having potential.
The potential comply with via to the excessive 62’s because it virtually 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 just under the 63 cent stage as an alternative:
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Oil markets at the moment are in a correct retracement after failing to proceed their breakout with Brent crude retracing again all the way down to the $76USD per barrel stage in a continued pullback after being so overbought in latest weeks.
The day by day chart sample has damaged out of its spring formation with quick time period momentum bursting into overbought territory with a run as much as the $80 stage 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 was properly again on observe after lately working out of steam because it made additional inroads above the $2700USD per ounce stage lately however its latest gentle pause become a retracement over the weekend, ending just under the $2750 stage in a single day.
Worth motion had been accelerating in confidence in early December as new ranges of assist had been being created no matter USD power however this pullback and rebound each had been combating an excessive amount of underneath 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 Help/Resistance: a ratcheting mechanism that follows value under/above a development, 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 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 Power
Uncle Level: or cease loss level, a stage at which you’ve clearly been fallacious in your place, so cry uncle and get out/fallacious in your place, so cry uncle and get out!
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