Breaking News
Investing Pro 0
NEW! Get Actionable Insights with InvestingPro+ Try 7 Days Free

11.07.22 Macro Morning

By Chris BeckerMarket OverviewJul 11, 2022 09:12
au.investing.com/analysis/110722-macro-morning-200515193
11.07.22 Macro Morning
By Chris Becker   |  Jul 11, 2022 09:12
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
 
Gold
+0.05%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
DXY
+0.07%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
SSEC
-0.55%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
US10Y...
-0.20%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
IXIC
-1.51%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 
HK50
+0.41%
Add to/Remove from a Portfolio
Add to Watchlist
Add Position

Position added successfully to:

Please name your holdings portfolio
 

Stocks stalled on Friday night with the suprisingly good US non farm payroll aka unemployment print on Friday night with mixed reactions in other risk markets. The USD fell back a little against most of the undollars, although Euro almost approached parity before bouncing back. Meanwhile the Australian dollar pushed a little higher above the 68 handle but still managed a new weekly low. Bond markets jump in yields on the NFP print with 10 Year Treasuries pushed up to the 3.1% level, with interest rate futures continuing to firm up at least a 75bps rise at the next Fed meeting. Commodity prices remain volatile with oil prices bouncing back more than 2%, but copper and gold pulled back again, the latter on the ropes at the $1740USD per ounce level.

Looking at share markets in Asia from Friday’s session, where Chinese share markets surged at the open but retraced going into the close with the Shanghai Composite losing 0.2% to close at 3356 points while the Hang Seng Index was able to find some buyers later, finishing 0.4% higher at 21725 points.The daily chart was showing a potential rollover building here as price action rejected the previous highs at the 22000 point level as considerable resistance still keeps this market in check. Futures are suggesting a flat start to the trading week, but watch out for any attempt to break through the recent daily highs at the 22200 area:

Japanese stock markets were looking to be the best in the region, but stumbled at the close with the Nikkei 225 index barely finishing 0.1% higher at 26517 points. Risk sentiment on the daily futures chart is slowly reversing here with another solid session likely to start the trading week with a second close above the high moving average. While daily momentum is still on the negative side, the key area to watch is previous short term resistance at the 27000 point area that once breached could spell another short term rally:

Australian stocks had another solid session to finish the week, with the ASX200 finishing 0.5% higher at 6678 points. SPI futures are up 20 points or 0.3% despite the flat result Friday night on Wall Street. The daily chart remains an ugly picture in the medium term, with my contention of price needing to recover well above the 6600 point level before calling any bottoming action still holding, although price action and daily momentum are building here for a potential break out in the short term:

European stocks continued their recovery on better sentiment with the Eurostoxx 50 index eventually closing 0.5% higher at 3506 points. While the daily chart picture remains in a very bearish state here with price action hanging around the March dip lows there is the possibility of a bottom forming. Daily momentum is still quite negative, but not yet oversold, so a growing chance of price getting back to above the 3570 point area is for the time being staving off another rollover as a cheaper Euro continues to help:

Wall Street had scratch sessions throughout NASDAQ lifting just 0 .1% while the S&P500 lost a handful of points to slip under the 3900 point level, failing to get back to the previous weekly high. The four hourly chart had been showing more buying support building, pushing off nascent support at a lower 3700 point level, with price now wanting to get back above the previous resistance zone from the last false rally after breaking out above short term ATR resistance. I still contend a proper recovery out of this correction requires a rally back through the psychologically important 4000 point zone, or at the very least near the previous weekly high (top black horizontal line):

Currency markets continue to see no change in USD strength despite some oscillation on Friday night with Euro pushed into the parity handle before recovering smartly to finish the wee at the 1.018 level, still making a new weekly low in the process. The union currency remains under stress as it continues its falls as support at the 1.035 mid zone (horizontal black line) was wiped out previously. Parity remains the target below, with the potential for a swing trade on the oversold price action not yet appearing here:

The USDJPY pair is still trying to push higher, but keeps getting stuck below the 136 handle after failing to push above last weeks intrasession high. Support remains firm at the 134 mid level as short term momentum gets out of the oversold zone while price itself bounces back above the previous Friday lows, but it all looks illusory. I remain cautious here, watching for a potential break back to the mid 134 area and then a potential breakdown if not supported:

The Australian dollar is trying to bounceback after falling below the 68 handle post the FOMC minutes after it recently bottomed out at the lower edge of its monthly downtrend channel (lower sloping black line). This bounce may eventually have legs as commodity prices start to comeback, with Friday night’s action seeing price action clear the weekly downtrend line (upper sloping black line) with trailing ATR resistance at the 69 handle proper the target here:

Oil markets tried to continue their comeback on Friday night with Brent crude pushing another 2% higher to bounce well above the $100USD per barrel level, finishing at $107 but still shy of the previous daily support level. This is an expected bounce after overshooting the $100 psychological support level, but watch for a retracement as daily momentum is still technically oversold and price has not cleared former support, now resistance:

Gold continues to have a tough time alongside other undollars and commodities with no real signs of a bottom forming on Friday night, unless you call matching the previous low with near zero volatility a bottoming action. Instead its maintaining its lows at the $1740USD per ounce level with momentum still extremely oversold. Medium term resistance had been far too strong at the $1830USD per ounce level and that will be the key level going forward if any bounceback comes out of this action:

11.07.22 Macro Morning
 

Related Articles

Alla Makeyeva
Can The Pound Sterling Recover? By Alla Makeyeva - Sep 24, 2022

The Bank of England (BoE) has defied market expectations by raising interest rates by 50bps at its September meeting. Implied pricing showed that market participants were skewed...

11.07.22 Macro Morning

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind: 

  • Enrich the conversation
  • Stay focused and on track. Only post material that’s relevant to the topic being discussed.
  • Be respectful. Even negative opinions can be framed positively and diplomatically.
  •  Use standard writing style. Include punctuation and upper and lower cases.
  • NOTE: Spam and/or promotional messages and links within a comment will be removed
  • Avoid profanity, slander or personal attacks directed at an author or another user.
  • Don’t Monopolize the Conversation. We appreciate passion and conviction, but we also believe strongly in giving everyone a chance to air their thoughts. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email