A continued absence of catalysts saw risk markets remain rangebound overnight Wall Street putting in a wobbly return as European shares took back all their return gains. Meanwhile the USD rebounded against the majors with the Australian dollar again depressed below the 67 cent level.
10 year Treasury yields also roundtripped to remain around the 4% level while oil prices rose alongside a surge in natural gas prices with Brent crude finishing more than 2% higher to return above the $77USD per barrel level. Gold was largely unchanged following its post weekend slump to remain below the $2030USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were up initially but have fallen back in afternoon trade as the Shanghai Composite remains below the 2900 point barrier, closing some 0.2% higher at 2893 points while in Hong Kong the Hang Seng Index was down slightly to 16190 points.
The daily chart was showing a significant downtrend that had gone below the May/June lows with the 19000 point support level a distant memory as medium term price action remained stuck in the 17000 point range before this new losing streak. Daily momentum readings are retracing back to oversold settings as price action wants to return to the October lows, with little chance of stabilising here:
Japanese stock markets have reopened and played catchup with the Nikkei 225 closing some 1% higher at 33745 points.
Trailing ATR daily support was being threatened by price action after this bounce went beyond the September highs at the 33000 point level with daily momentum now returning to the overbought zone. Correlations with a stronger Yen are breaking down here with a selloff back to ATR support at 32000 points unlikely as the November highs come under threat:
Australian stocks were finally able to get moving, with the ASX200 closing 1% higher at 7520 points.
SPI futures however are down approximately 0.2% after the wobbly returns on Wall Street overnight. The daily chart is still looking very optimistic here in the medium term with short term price action however suggesting a possible reversal underway as daily momentum starts to wane and resistance at the 7600 point level builds. Watch for any dip below the low moving average:
European markets were unable to push higher after a solid session beforehand with small losses across the continent as the Eurostoxx 50 Index finished 0.4% lower at 4467 points.
The daily chart shows weekly support remaining firm at the 4480 point level but a failure to make a new high above the early December 4600 point level is starting to drag overall momentum down with a full retracement now below overbought settings. Futures are indicating a further drag down so watch daily support which should remain strong here:
Wall Street also was unable to follow through with wobbly returns across the board as the NASDAQ put on just 0.1% while the S&P500 closed some 0.2% lower at 4756 points.
Short term momentum is now retracing out of oversold territory on the four hourly chart, with a very strong breakout pushing through trailing ATR resistance. Support has been strong at the 4700 point level proper as more trading volume and an absorption of the NFP print into macro considerations give rise to a new rally here:
Currency markets remain in thrall to the USD following Friday night’s NFP print despite a small weekend gap lower. Overnight volatility was subdued with a small life in USD strength as Euro remains anchored near the 1.09 handle.
The union currency was looking weak but with the potential for a swing trade higher before the print but short term momentum remains negative with price action still well below trailing ATR resistance as it remains near the December lows:
The USDJPY pair rebounded from its post Friday night small consolidation to just above the 144 handle and trailing ATR support on the four hourly chart as Yen weakened slightly as Japanese traders returned to their desks after another long weekend.
Four hourly momentum is now slipping from overbought readings and the medium term trend (sloping black line) remains broken here but I think this move was a little too fast so watch for a possible retracement:
The Australian dollar had a wide range on Friday night but is again threatening to break below the 67 handle which is still proving too tough to climb over.
The Aussie has been under medium and long term pressure for sometime with the latest rally just a relief valve being let off with short term momentum returning to oversold territory as traders positioned for the NFP print and still have another month for the RBA to come back from holidays:
Oil markets saw a lift higher overnight due to natural gas futures gaining on supply concerns, but Brent crude is still contained well below the key $80USD per barrel level with the downtrend also entrenched.
After almost reaching $100 in mid September, price was looking to return to the August levels around the $85 area where a point of control had been established before the recent breakout failed to push above trailing resistance at the $80 level. Daily momentum failed to get out of negative settings but is having another go here despite a possible retest of the December lows nearer the $70USD per barrel level soon:
Gold is not finding much support in comparison with other undollars as it continues to flirt with a return to the $2000USD per ounce level as current price action remains anchored near the early December levels, closing just below the $2030 level again.
Profit taking may return here so watch the low moving average on the daily chart for signs of another possible dip with daily momentum still in the oversold zone:
