Wall Street snapped back from a near week long losing streak while European markets continued their retracement to almost a new weekly low as Fed Chair Powell told Congress again that more rate rises are on the way. This sent USD higher with the Australian dollar heading towards the 67 cent level again.
US bond markets saw an uptick in yields on Powell’s comments as oil prices fell back due to an increase in inventories with Brent crude dropping some 3% to the $74USD per barrel level. Gold deflated yet again as it dropped sharply towards the $1900USD per ounce level without any bounceback as in previous routs.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were down all session again with the Shanghai Composite losing more than 1.3% to cross below the 3200 point level while the Hang Seng Index was closed for a holiday.
The daily chart was showing a series of strong sessions that took it back above the previous resistance zone as daily momentum became positive and overbought, retracing most of the May losses. However this sharp reversal takes price action back to that zone so watch for a follow through below the 19000 point level when the market reopens:
Japanese stock markets are also on a slump with the Nikkei 225 closing nearly 1% lower to 33264 points. Futures are indicating another flat start as price action on the daily chart shows a stall underway.
Trailing ATR daily support however keeps ratcheting higher as the 33000 point level remains breached with daily momentum still quite above overbought settings as this market remains very well supported by a weaker Yen. But another consolidation back to 31000 points is sorely needed to take some heat out:
Australian stocks had a shocker with the ASX200 closing nearly 1.6% lower at 7195 points.
SPI futures are down only 0.1% given the unease and bounceback on Wall Street overnight. Price action has pulled back to the recent weekly low with ATR resistance at 7300 points proving a tough barrier to push through as short term price action rolls over completely:
European markets can’t find any confidence with small to modest losses across the continent again, as the Eurostoxx 50 Index finished 0.4% lower at 4304 points.
The daily chart was previously showing a clear breakout that turned into a bull trap but support at the 4200 point level has so far been well defended. Weekly resistance at the 4350 points level is the true area to beat next with price action indicating a rollover is underway with subsequent closes below the low moving average setting up for a return to the 4200 level:
Wall Street was all over the place with the Dow putting in a scratch session while the NASDAQ rebounded from its recent flop, up nearly 1% while the S&P500 finished some 0.4% higher at 4381 points.
The four hourly chart shows a decline throughout the week that has been somewhat arrested overnight but not really enough to breakthrough the 4400 point level as short term momentum remains negative and price action anchors here:
Currency markets saw a broad gain for USD with Pound Sterling holding on while Euro briefly touched the 1.10 handle before falling back to the mid 1.09 level versus King Dollar.
Short term price action had been building quite positive before last week’s ECB meeting, having bounced off the mid 1.07 level that was resistance with short term momentum now retracing from overbought conditions. The union currency is still wanting to test the April highs above the 1.10 handle:
The USDJPY pair was finally able to push higher overnight with the breach of the 143 level in a near one way move that saw a broad selloff in Yen.
The previous consolidation back down to trailing ATR support was looking like repeating itself here, turning into a medium term consolidation but the BOJ pause and Fed Chair Powell’s comment is giving the pair new life. Four hourly momentum is now in extremely overbought mode as short term price action looks way overdone:
The Australian dollar looks like rolling over yet again with another weak session overnight that sent it back to the mid 67 level, almost making a new weekly low in the process.
ATR support is now taken out in the short term and while the Pacific Peso was looking to put previous overhead resistance at 67 cents, price action has now provided a sustained pullback that is more than just taking some steam out short term:
Oil markets had the double whammy of new inventory reports gaining while the USD lifted as well, sending Brent crude down to the $74USD per barrel level and wiping out a week’s gains in one session.
Price is contained around the December levels (lower black horizontal line) and the March lows with daily momentum now finally getting out of oversold mode but still negative. A proper reversal will require a substantive close above the high moving average here on the daily chart before threatening a return to $70 or lower:
Gold continues to fail with a proper rout overnight straight down to the $1910USD per ounce level without any late reprieve this time.
The four hourly chart had been showing this whipsaw movement in recent weeks but with a continued failure to get back above the psychological $2000USD per ounce level still holding it back, with short term ATR resistance just too far away on any bounceback. All the signs were building here for a complete capitulation below $1930 so watch for the $1900 level next:
