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27.02.24 Macro Morning

Published 27/02/2024, 10:06 am
Updated 09/07/2023, 08:32 pm

Wall Street stalled again overnight as the new trading week got underway with European markets pulling back. The USD slipped a little while bond yields rose in the absence of any significant economic events although these will start to ramp up as the week goes on. The Australian dollar was again stuck at the mid 65 cent level and fell in early trade this morning.

10 year Treasury yields lifted back to the 4.3% level, with rises across the yield curve while oil prices spiked back after dropping over the weekend gap as Brent crude returning above the $81USD per barrel level. Meanwhile gold stayed above the $2030USD per ounce level.

Looking at markets from yesterday’s session here in Asia, where Chinese share markets are reversing their post Chinese New Year rally with the Shanghai Composite down nearly 1% while the Hang Seng is off by more than 0.5% to 16626 points.

The daily chart is starting to look 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 but watch for any retracement down to the low moving average:

Japanese stock markets have reopened from the long weekend with the Nikkei 225 up 0.3% to 39233 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:

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Australian stocks have had a flat start to the trading week with the ASX200 up just 0.1% to remain above the 7600 point level, closing at 7652 points.

SPI futures are down only slightly, reflecting the flat result 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 had poor sessions across the continent, with the Eurostoxx 50 Index eventually finishing nearly 0.2% lower at 4864 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 indicating a further pullback this evening. This is looking to turn into a larger breakout but watch for any falls below the low moving average or ATR support proper:

Wall Street failed to put in a new record high, with minor losses across the whole complex with the NASDAQ down 0.3% while the S&P500 finished 0.2% lower closing at 5076 points.

The four hourly chart previously showed 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. This is all put aside as price soars back above the 5000 point level with a new breakout above the previous weekly highs but I’m wary of short term momentum again floundering:

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Currency markets are still somewhat anti USD but may change their tune as the economic calendar ramps up this week with Euro still on track higher as it passed last week’s intrasession highs well above the 1.08 handle proper.

The union currency is now at a new monthly high with a view to getting back to the 1.09 handle with momentum overbought in the short term and price action breaking out as well. Watch for any pullback to the 1.0820 level and any test of the 1.08 handle itself however:

The USDJPY pair remains stable with a small breakout above the descending triangle pattern on the four hourly chart that takes it above the mid 150 handle and back to the spike highs from several weeks ago.

This is looking very optimistic as Yen sells off due to BOJ meanderings with momentum now back to slightly overbought 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, however unlikely:

The Australian dollar is going against the other major undollar trend with a retracement below its recent uptrend and deflating back to trailing short term support to almost get back below the 65 cent level overnight.

The Aussie has been under medium and long term pressure for sometime with the short term moves above the 65 level unable to set up for another breakout with short term momentum really painting the picture of internal weakness here. Watch for ATR trailing support to come under threat next:

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Oil markets are still trying to lift much higher to match their December highs but Brent crude gapped lower over the weekend before rallying back to the Friday night lows just below the $82USD 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 another attempt at breaking out above the $2030USD per ounce level on Friday night not yet filled, but not yet failed!

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:

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