Friday night saw big moves in currency markets following a boisterous share market session in Asia that was not repeated across both sides of the Atlantic, although Wall Street still advanced. The latest US consumer sentiment figures came in better than expected but the USD remained very weak against all the majors except Yen, with Euro punching to a new high while the Australian dollar again broke out above the 66 cent level.
10 year Treasury yields pulled back again, down 4 points to the 3.8% level while oil prices remain somewhat volatile but Brent crude stabilised at the $80USD per barrel level. Gold had a great finish to the week with a big move up across the $2500USD per ounce level.
Looking at markets from Friday’s session in Asia, where mainland Chinese share markets are still struggling to find any traction as economic concerns continue to weigh down sentiment as the Shanghai Composite closed steady at 2873 points while the Hang Seng Index zoomed higher, closing up 1.9% to 17430 points.
The Hang Seng Index daily chart was starting to look more optimistic a few months back but price action has slid down from the 19000 point level and continues to deflate in a series of steps as the Chinese economy slows. A few false breakouts have all reversed course and another downside move was looming here but this breakout has some potential as it clears short term resistance:
![](https://d70-invdn-com.investing.com/content/e74cb29f248234b524d704c3e8971c06.png)
Meanwhile Japanese stock markets also jumped on the bandwagon with the Nikkei 225 closing 3.6% higher to 30862 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 support subsequently broke on that retracement, and then the front fell off. We are now seeing a big fill here as Yen volatility is dissipating with a return to the 38000 point level from May/June the likely result and not higher:
![](https://d70-invdn-com.investing.com/content/5e9451c4965f1101f4888ccc830a42fb.png)
Australian stocks had a strong final session of the week with the ASX200 closing 1.2% higher at 7971 points.
SPI futures are down 0.2% or so despite the solid response on Wall Street Friday night. Former medium term support at the 7700 point level will remain under pressure here as trader’s absorb the RBA’s signalling of no punchbowl for the rest of 2024, but short term momentum looks more positive:
![](https://d70-invdn-com.investing.com/content/061dbf21f209fb41032aad2ec3ccffa8.png)
European markets stabilised and then were able to put in some solid gains across the continent, as the Eurostoxx 50 Index managed to finish 0.7% higher at 4727 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 just unable to breach the 5000 point barrier. Instead, former ATR support at the 4900 point level was only a temporary anchor point as we remain deep down into correction territory. Price must clear the 4700 local resistance level smartly to get out of trouble:
![](https://d70-invdn-com.investing.com/content/51980b69969e3a104bd7cadedf27a92c.png)
Wall Street initially was up across the board but the NASDAQ pulled back to a scratch session while the S&P500 closed just 0.4% higher at 5455 points.
The four hourly chart illustrates how this bounceback has now cleared short term resistance at the mid 5300 point level with momentum retracing fully from oversold to very positive. The potential for a positive breakout was building here but the question is can it return to the early August highs:
![](https://d70-invdn-com.investing.com/content/7a5b6afba6e6dcad13c67b8d7cd4f964.png)
Currency markets continued to move further against USD in the wake of the US CPI print but it was relatively subdued as it was mainly baked in prior to the release. Euro however did spike up through the 1.10 handle overnight before almost retracing below that level this morning.
The union currency had previously bottomed out at the 1.07 level before gapping higher earlier in the week with more momentum building to the upside with the 1.0750 mid level as support but there was still too much pressure from King Dollar. This looks much more encouraging but very overbought in the short term:
![](https://d70-invdn-com.investing.com/content/89327156ca3230582fd3d5e0dc2c16b5.png)
The USDJPY is trying to get out of its downwards medium term pattern as the carry trade unwinds and failed to make its intraweek high stick on Friday night as it settled just above the mid 147 level as short term momentum slows.
The overall volatility speaks volumes as it pushed aside the 158 level as longer term resistance in the weeks leading up to the BOJ rate hike. Momentum is suggesting a possible bottom is brewing as the BOJ wants to get this under control:
![](https://d70-invdn-com.investing.com/content/fc8e685131071ab9f9433f8751452891.png)
The Australian dollar is pushing higher on the weaker USD and the recent soft unemployment print with a solid breakout on Friday night that has now kept it above the 66 handle as it failed to do previously.
During June the Pacific Peso hadn’t been able to take advantage of any USD weakness with momentum barely in the positive zone but that has changed in recent weeks with price action finally getting out of the mid 66 cent level that acted as a point of control. This level will now switch to support so watch for any retracements as buying opportunities:
![](https://d70-invdn-com.investing.com/content/03b1b7d72d7629a529c43b0f183f2876.png)
Oil markets are still trying to move out of their previously weak position as the looming Iran/Israel war provides more volatility but Friday night saw some stability around the $80USD per barrel level again for Brent crude.
After breaking out above the $83 level last month, price action had stalled above the $90 level awaiting new breakouts as daily momentum waned and then retraced back to neutral settings. Daily ATR support had been broken with short term momentum still in oversold mode but watch for a potential follow through on this reversal as this swings into higher volatility:
![](https://d70-invdn-com.investing.com/content/c2715e02f0cc4b52d057ad639b2545d9.png)
Gold has finally broken through the $2500USD per ounce level after various attempts at overcoming the previous volatile periods and last week managed to clear short term resistance and then keep pushing through on Friday night.
The longer term support at the $2300 level remains firm while short term resistance at the $2470 level was the target to get through last week as I indicated. This is looking very overextended so I expect a minor pullback over the weekend gap:
![](https://d70-invdn-com.investing.com/content/f508413b123ce93b861bfe2ab68889b9.png)