Wall Street made another record high as the latest ISM services print came in much weaker than expected with the USD finishing much lower as private jobs data and factory orders also came in lower than expected. Euro spiked higher with the Australian dollar finally breaking through the 67 cent level.
10 year Treasury yields retraced relatively sharply in a truncated session due to the 4th July holiday coming up, pulling back 8 points to the 4.3% level while oil prices made new highs again with Brent crude pushing above the $87USD per barrel level to extend its new weekly high. Gold broke out alongside other undollars after being relatively weak after recently breaking down below the $2300USD per ounce level as it finished just above the $2350 level overnight.
Looking at markets from yesterday’s session in Asia, where mainland Chinese share markets are failing to make a strong with the Shanghai Composite unable to break above the 3000 point barrier, currently down 0.5% while the Hang Seng Index has pushed nearly 1.2% higher at 17978 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 was looking way overextended but this retracement is still taking some heat out of the market although there are signs it may be over as the falling wedge pattern is starting to complete:
Meanwhile Japanese stock markets are soaring higher with the Nikkei 225 up more than 1.2% to 40580 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 had been defended with short term price action now rebounding off former support at the 39000 point level with short term momentum still positive as futures are indicating a further breakout on the open:
Australian stocks were again the worst performers with the ASX200 gaining just 0.2% to 7739 points.
SPI futures however are up nearly 1% in line with the rally on Wall Street overnight. 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 in mid April. Momentum is finally getting out of its oversold condition but has been unable to get back into positive territory with a return to the 7900 point level not yet on the cards:
European markets this time returned to upside volatility with another reversal saw big lifts across the continent with the Eurostoxx 50 Index closing 1.2% higher at 4965 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 was looking to turn into a larger breakout with support at the 4900 point level quite firm with resistance still looming at the 5000 point barrier. Former ATR support at the 4900 point level looks like the anchor point here:
Wall Street rallied across the board again with more record highs with the NASDAQ up 0.8% while the S&P500 lifted over 0.5% to finish at 5537 points.
The four hourly chart showed resistance overhead that had been tested last Friday before an early week slump that has now been tested and broken through overnight, helped alongside a soaring NASDAQ. Momentum is nicely overbought now with the potential for more upside here:
Currency markets are coming back against a dominant USD but the slew of weaker than expected economic releases has seen most undollars fight back strongly with some pretty big ranges overnight. Euro was the first to really get moving, pushing through the 1.08 handle and making a new weekly high in the process.
The union currency had previously bottomed out at the 1.07 level before gapping higher earlier this week post the US Presidential debate with more momentum now building to the upside with the 1.0750 mid level to act as support going forward:
The USDJPY pair had some large intrasession volatility but was able to almost stay on trend, staying well above the 161 handle amid consistent strong momentum.
Short term momentum had gotten out of oversold condition but was not yet positive with price action suggesting a further pause or rollover here before the print with this move taking the pair back to last week’s finishing point. This volatility speaks volumes as it pushes aside the 158 level as longer term resistance:
The Australian dollar is finally out of its holding pattern as the USD fell back, breaking out above the 67 cent handle in a strong move.
So far the Pacific Peso hadn’t been able to take advantage of any USD weakness with momentum barely in the positive zone in recent weeks with price action whipsawing around the mid 66 cent level as a point of control. This move looks much more convincing with the potential to go higher as speculation of a rate hike in August building:
Oil markets are now well out of correction mode with Brent crude breaking out again with a new daily high above the $87USD per barrel level.
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 with short term momentum now into overbought mode:
Gold finally got out of its funk overnight after being unable to make a new high after dropping below the key $2300USD per ounce support level recently, breaking out to finish just above the $2350 level.
Still the biggest casualty of the reaction to the US jobs report last week, the shiny metal had consistent negative short term momentum with ATR resistance still ratcheting down without any potential upside. I thought this could break even lower but shows that the $2300 level is key support going forward:
