A slew of important economic releases overseas has been overshadowed by the local Federal Budget coverage, with the latest US PPI print coming in a little hotter than expected, helping Wall Street surge a little while European markets were broadly unchanged with German inflation coming in as expected. As a result the USD initially surged before giving up those nascent gains and then losing considerable ground against everything except Yen with the Australian dollar firming slightly above the 66 cent level.
10 year Treasury yields moved slightly lower again to almost breach the 4.4% level, while oil prices are failing to stabilise with Brent crude pushed back below the $83USD per barrel level. Meanwhile gold liked the volatility with a small push higher to finish above the $2350USD per ounce level.
Looking at markets from yesterday’s session in Asia, where mainland Chinese share markets are seeing another small pullback with the Shanghai Composite down 0.1% while the Hang Seng Index is also stalling its recent advance, finishing more than 0.2% lower to 19073 points.
The Hang Seng Index daily chart was starting to look more optimistic with price action bunching up at the 16000 point level before breaking out in the previous session as it tried to make a run for the end of 2023 highs at 17000 points with the downtrend line broken. Price action looks way overextended without any retracement to take heat out of the market, but this looks very optimistic indeed:
Meanwhile Japanese stock markets were the odd ones out, with the Nikkei 225 up 0.4% to 38356 points.
Price action had been indicating a rounding top on the daily chart with daily momentum retracing away from overbought readings with the breakout last month above the 40000 point level almost in full remission. Short term resistance has been defended with short term price action now retracing to support at the 39000 point level. Watch the 38000 support level to remain solid here:
Australian stocks opened down and stay down through the day with the ASX200 off by more than 0.3% at 7722 points.
SPI futures are up 0.5% due to the rebound on Wall Street overnight so we should see a strong start to today’s session. The daily chart was showing a potential bearish head and shoulders pattern forming with ATR daily support tentatively broken, taking price action back to the February support levels. Momentum is finally getting out of its oversold condition with this breakout setting up for potential upside:
European markets continued their wobbly start to the trading week with mixed sessions across the continent, as the Eurostoxx 50 Index closed a few points higher at 5080 points.
The daily chart shows price action off trend after breaching the early December 4600 point highs with daily momentum retracing well into an oversold phase. This is still looking to turn into a larger breakout with support at the 4900 point level quite firm:
Wall Street finally found some mojo with a solid bounce as the NASDAQ advanced more than 0.7% while the S&P500 pushed nearly 0.5% higher to finish at 5246 points.
The four hourly chart was showing a fairly wide trend channel forming after bottoming out at support at 5000 points but lost significant momentum following Friday’s rebound, and thus a full retracement through trailing ATR support at the 5100 point level. Price action is getting out of its stalled position above the 5200 point area with momentum back into overbought settings:
Currency markets remain somewhat against USD with the majors gaining a little over the weekend gap against King Dollar, led by Euro as it starts the new trading week back at the previous weekly high just below the 1.08 handle.
The union currency had previously bottomed out at the 1.07 level at the start of April as medium term price action with a reprieving reversal in price action back towards the 1.09 level before last week’s inflation print. Short to medium term support at the 1.0630 level has been respected so far, with a breakout now back to the 1.08 level with momentum overbought:
The USDJPY pair is still climbing slowly, bucking the trend, moving beyond the 156 handle to nearly complete a rebound from its previous weekly lows.
This price action is much more welcoming with a slow steady rise as opposed to the wild oscillations in late April, with rising support and momentum now nicely overbought:
The Australian dollar has been finally able to extend and stabilise above the 66 cent handle after starting the week in a state of hesitation as the Budget impact is finally absorbed.
The Aussie has been under medium and long term pressure for sometime before the RBA and Fed meetings and while the previous temporary surge looked strong, it wasn’t overbought on the four hourly chart and had not surpassed support from last week’s consolidation phase. This tentatively looks good for the Pacific Peso but I’m watching the mid 66 handle next:
Oil markets are barely holding on after a lot of intrasession volatility despite the latest round of Middle East conflicts with Brent crude falling slightly back below the $83USD per barrel level after briefly touching the $81 area in the previous session.
After breaking out above the $83 level last month, price action has stalled above the $90 level awaiting new breakouts as daily momentum waned and then retraced back to neutral settings. Watch daily ATR support here at the $86 level which is still broken and will likely be resistance for sometime:
Gold finished its retracement following the too fast rally last week and rebounded from short term support at the $2330USD per ounce level to finish above the $2350 level overnight.
Watch short term momentum here to see if price action will be supported above the previous weekly highs that was broken by last week’s breakout for a potential new entry point to get things moving again before the next Fedspeak around inflation:
