The October US jobs report came in higher than expected with Wall Street finishing more than 1% higher across the board while the USD finished lower against most of the major currency pairs as macro concerns outweighed risk sentiment. The Australian dollar almost pushed through the 64 cent level but remains under tremendous pressure. Stock futures however have pulled back signficantly due to the attacks in Israel.
US bond markets went to new historic highs with the 10 year Treasury yield almost up through the 4.8% level while oil prices pulled back again with Brent crude pushed below the $85USD per barrel level. Gold jumped up after decelerating all week to breach the $1830USD per ounce level.
Looking at share markets in Asia from Friday’s session with mainland Chinese share markets up slightly into the close with the Shanghai Composite finishing just 0.1% higher at 3110 points while in Hong Kong the Hang Seng Index soared some 1.5% to 17485 points.
The daily chart is still showing a significant downtrend that has gone below the May/June lows with the 19000 point support level a distant memory as price action stays well below the dominant downtrend (sloping higher black line) following the previous month long consolidation. Daily momentum readings are now out of oversold mode but have not been positive for months so I only expect another dead cat bounce here:
Japanese stock markets did well to build on their recent rebound, with the Nikkei 225 closing nearly 0.9% higher at 32619 points.
Trailing ATR daily support had been paused for sometime now as the market went sideways after a big lift recently, with a welcome consolidation above that level but that has now turned into a proper dip. Daily momentum broke into the oversold levels but has now retraced as price action bounced back from the support zone with the potential for a swing building here, as futures are indicating a modest pullback in line with Wall Street:
Australian stocks were able to claw out a positive session but finished the week down as the ASX200 closed some 0.4% higher at 6954 points.
SPI futures are looking wobbly given the attacks on Israel over the weekend so I expect a gap down on the weekend, with the 7000 point level still looming as strong short term resistance. Medium term price action continue to move sideways at best:
European markets were able to finish the week on a good note even with German stocks leading the way, pushing the Eurostoxx 50 Index some 1% higher at 4144 points.
However, the daily chart still shows an overall decline with weekly support at 4100 points barely defended, as weekly resistance continues to build, now lowering to the 4300 point resistance level. There are signs of stability returning here as daily momentum now gets out of oversold mode but I remain cautious as this looks like another short term ill fated dead cat bounce:
Wall Street lifted across the board on the NFP print with the NASDAQ putting on more than 1.6% as the S&P500 lifted nearly 1.2% higher to finish at 4308 points.
The daily chart is showing price action bunching up around the recent lows at the 4260 point area with this session proving a bullish engulfing candle giving a big lift to risk sentiment. However, this was before the attacks on Israel with futures looking worse for wear, taking most of these gains back;
Currency markets are continuing their fight back against USD with the latest NFP print giving the major currency pairs another lift higher as King Dollar stumbles. European economic weakness is not yet overshadowing Euro which has lifted off the 1.04 handle in early October to almost push through the 1.06 level on Friday night.
However, looking at the medium term its apparent on the four hourly chart that the union currency still really needs to have a strong return above trailing ATR resistance, now at the 1.06 handle. Short term momentum is well overbought but price action looks toppy at best:
The USDJPY pair was unable to stabilise after its recent decline and big whipsaw last week with another drawdown on Friday night back to the 149 level, although this did stave off a new weekly low.
Four hourly momentum shows a neutral setting for now with futures indicating a gap lower on the open due to the macro events over the weekend, so watch out below as price action looks tenuous here in the short term:
The Australian dollar had been under the pump against King Dollar for sometime with a big decline to the 62 handle in recent weeks but it found some new life on Friday night to return to the mid 63 level although this could be shortlived as the weekend gap catches up.
The Pacific Peso will remain under pressure more so due to domestic concerns with the former 65 cent high a distant memory so watch for the potential to rollover again as four hourly momentum inverts:
Oil markets are falling sharply despite the new conflict in the Middle East as demand concerns outweigh sentiment and supply cuts with Brent crude finishing the week down below the $85USD per barrel level after almost reaching $100 in mid September.
Price is looking to return to the August levels where a point of control was established before the breakout at the $87USD per barrel level with that being resistance to overcome in coming sessions. Daily momentum has nearly returned to oversold readings, so this could have further downside potential:
Gold was able to push higher on Friday night, halting its impressive decline in recent weeks to just get above the $1830USD per ounce level but momentum will continue to struggle here in the short term.
The daily chart shows a potential bottoming action given the deceleration last week before the NFP print as short term momentum reverses out of its grossly oversold condition, but I’d be cautious and wait for another daily high:
