22.02.24 Macro Morning

Wall Street remains listless while bond markets saw more selling as yields rose across the complex in the wake of the release of the latest FOMC Minutes, which found most Fed members concerned about “too fast” rate cuts. The USD was largely unchanged against most of the majors with the Australian dollar again stuck at the mid 65 cent level.

10 year Treasury yields pushed up towards the 4.3% level while oil prices remain in stall mode as Brent crude hovered above the $83USD per barrel level. Meanwhile gold slipped initially to fall below the $2020USD per ounce level but has since rebounded in early trade before the Asian open.

Mainland and offshore Chinese share markets are no longer being hesitant after their long break with the Shanghai Composite up nearly 1% while the Hang Seng finished more than 2% higher at 16503 points.

The daily chart is starting to look a bit more optimistic with price action bunching up and now exceeding the 16000 point level, ready to possibly burst out here and make a run for the end of 2023 highs at 17000:

Japanese stock markets were still pulling back with the Nikkei 225 closing 0.6% lower at 38113 points.

Trailing ATR daily support was never threatened by price action after this bounce went beyond the September highs at the 33000 point level with daily momentum getting back to overbought readings with a significant breakout. A selloff back to ATR support at 32000 points remains unlikely as the November highs are wiped out in this breakout but I’m cautious of a strong pullback here on any volatility:

Australian stocks fell back sharply due to a big drop in Colesworth with the ASX200 closing 1% lower at 7601 points.

SPI futures are indicating a further drop on the open of around 0.3% although this could be wider given the volatility on Wall Street overnight. The daily chart was looking firmer with the medium term uptrend and short term price action coming together to take out the previous December highs. As I said previously, watching for any continued dip below the low moving average could see a significant pullback but watch ATR support which has been defended so far:

European markets finally managed some decent rises on the continent, although the FTSE fell sharply in contrast with the Eurostoxx 50 Index eventually finishing some 0.3% higher at 4775 points.

The daily chart shows price action still on trend after breaching the early December 4600 point highs but daily momentum has now retraced from being well overbought with futures a pullback this evening. There were are hopeful signs this could turn into a larger breakout but markets were overextended but watch for any falls below the low moving average or ATR support proper:

Wall Street however still can’t find any confidence following the long weekend with the NASDAQ again leading the selling, off by over 0.3% while the S&P500 finished just 0.1% higher in a bumpy session, closing below the magical 5000 point level at 4981 points.

The four hourly chart shows short term momentum trying to get out of oversold territory with a nascent bearish double head pattern plus a break below the daily trend line from the January lows broken. The previous fill above the 5000 point level may have been short lived:

Currency markets are still somewhat anti USD given the calm reaction to the latest FOMC mintuesy overnight with some retracement later in the session but still keeping the likes of Euro on track which managed to extend its gains above the 1.08 handle proper.

The union currency had already been at a new weekly low almost below the 1.07 level but this was taken out and then some for a new monthly low, hovering over that level this morning. Short term momentum has reversed into overbought mode, with price action now above trailing ATR resistance:

The USDJPY pair remains somewhat stable with a very small lift above the 150 handle that keeps it unchanged since the minor late bounce last week, finishing this morning just above short term support.

This was looking very optimistic as Yen sells off due to BOJ meanderings with momentum now retracing to slightly negative settings in the short term, so I’m watching for any major pullback to the 150 level proper as part of a mid trend consolidation:

The Australian dollar is no longer experiencing its recent pressure cooker following the US inflation prints and some possible direction from the RBA, with some deflation overnight from its recent two week high above the mid 65 cent level as it again fails to breach the 66 handle.

The Aussie has been under medium and long term pressure for sometime with the short term moves above the 65 level setting up for another breakout the mid 65 cent area:

Oil markets tried to lift higher but Brent crude stayed stubbornly at the $83USD per barrel level as it continues to reject the previous weekly high overnight.

After retracing down to trailing ATR daily support at the $77 level, price is still above the weekly resistance levels that so far have held from the January false breakout with the short term target the late January highs above $84 still the next target:

Gold is still trying to get out of its formerly depressed state following the US CPI print last week with this rebound slipping slightly in the later session overnight after almost breaching the $2030USD per ounce level.

Daily momentum is no longer oversold with short term support at the $2000 level the critical area to watch with a further session highs and a bounce above short term ATR resistance required to stay on trend: