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25.06.24 Macro Morning

Published 25/06/2024, 09:44 am
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Wall Street started the new trading week with a plunge from tech stocks, lead by Nvidia, with the lack of any economic news also sending a high USD down slightly against the majors as Euro fought back after weeks of depression. European stocks surged back however, making for a mixed lead for Asian shares today. Yen remains at multi decade lows while the Australian dollar can’t get back above the 67 cent level.

10 year Treasury yields drifted lower, almost below the 4.25% level while oil prices were also muted with both WTI and Brent crude largely unchanged, the latter still above the $85USD per barrel level. Gold is trying to get back on track after its recent sharp reversal, heading back up to the $2330USD per ounce level.

Looking at markets from yesterday’s session in Asia, where Chinese share markets are falling again with the Shanghai Composite down some 0.7% to stay well below the 3000 point barrier while the Hang Seng Index managed to break even to finish at 18027 points.

The Hang Seng Index daily chart was starting to look more optimistic with price action bunching up at the 16000 point level before breaking out in the previous session as it tried to make a run for the end of 2023 highs at 17000 points with the downtrend line broken. Price action was looking way overextended but this retracement is now taking some heat out of the market but needs to stop soon before moving into corrective mode:

Meanwhile Japanese stock markets are liking the lower Yen with the Nikkei 225 up 0.6% to 38804 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 resistance had been defended with short term price action now rebounding off former support at the 39000 point level with short term momentum still positive although futures are indicating a small lift on the open:

Australian stocks are playing catchup with the risk off mood, giving back their Friday gains as the ASX200 heads nearly 0.9% lower to 7733 points.

SPI futures are up 0.5% despite the pullback on Wall Street overnight. The daily chart was showing a potential bearish head and shoulders pattern forming with ATR daily support tentatively broken, taking price action back to the February support levels in mid April. Momentum is finally getting out of its oversold condition but has been unable to get back into positive territory with a return to the 7900 point level not yet on the cards:

European markets remain volatile with lifts across the continent to start the new trading week with the Eurostoxx 50 Index closing 0.9% higher at 4950 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 still looming at the 5000 point barrier. Former ATR support at the 4900 point level looks like the anchor point here:

While the headline Dow Jones advanced, Wall Street was pulled down by tech stocks as the NASDAQ lost over 1% while the S&P500 fell back some 0.3% to finish at 5441 points.

The four hourly chart showed the Friday night rebound coming up against a lot of hesitation at the 5300 point level with short term momentum ready to launch higher. The consolidation phase with a small breakout no longer has much legs as hesitation builds as momentum flips into the negative zone:

Currency markets are still feeling the effects of a dominant USD but King Dollar failed to make larger in roads as Euro pushed back overnight after a week of downside volatility, lifting back above the 1.07 level to bounce off the previous weekly lows.

The union currency had previously bottomed out at the 1.07 level at the start of April as medium term price action with a reprieving reversal in price action back towards the 1.09 level before its own inflation print. Upside pressure is starting to build here but the 1.07 mid level must be breached first:

The USDJPY pair was unable to make a new session high but did not retreat either, as it stays well above the 159 handle and almost pushing through the 160 level as it takes a pause here amid consistent strong momentum.

Short term momentum had gotten out of oversold condition but was not yet positive with price action suggesting a further pause or rollover here before the print with this move taking the pair back to last week’s finishing point. This volatility speaks volumes as it pushes aside the 158 level as longer term resistance – is the 160 level next?

The Australian dollar is still failing to get back to its post US CPI one off high at the 67 cent level as price action stalls at short term resistance even below that level, setting at the mid 66 cent level as of this morning.

So far the Pacific Peso hadn’t been able to take advantage of any USD weakness with momentum barely in the positive zone in recent weeks with price action whipsawing around the mid 66 cent level as a point of control. Watch the 66 handle to come under threat again however as this remains unconvincing:

Oil markets are almost out of correction mode with a small pullback on Friday night on more Ruzzian refinery attacks as Brent crude holds here around the $85USD per barrel level.

After breaking out above the $83 level last month, price action has stalled above the $90 level awaiting new breakouts as daily momentum waned and then retraced back to neutral settings. Watch daily ATR support here at the $86 level which is still broken and will likely be resistance for sometime with short term momentum now well out of negative mode:

Gold was breaking out nicely after tracking sideways for weeks with price firming around the $2360USD per ounce level before sharply rolling over below resistance on Friday night but was able to clawback some gains to get back to the $2330 level.

Still the biggest casualty of the US jobs report last week, the shiny metal has bounced off its weekly low with short term momentum now heavily overbought and price yet clearing short term ATR resistance to almost get back to the early June highs:

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