Wall Street was closed overnight for the annual hand-mangling visit to the ER with commodity markets providing the only real upside action as OPEC+ continued to push for production cuts. The USD moved slightly higher against Euro but most major currencies remain where they started the trading week with the Australian dollar surprising after yesterday’s RBA hold as European stocks also tread water.
US bond markets were closed while oil prices lifted nearly 2% with Brent crude breaking through the $76USD per barrel level. Gold continues to make a small comeback alongside other undollars with a lift up through the $1920USD per ounce level.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets failed to translate their solid start to the trading week into anything stronger, with the Shanghai Composite putting in a scratch session to finish at 3245 points while the Hang Seng Index was able to finally find some buyers, lifting 0.5% at the close to finish at 19415 points.
The daily chart is showing hesitation again at the 19000 point level after the previous weekly retracement that bounced off the dominant downtrend (sloping higher black line). Another breakout is required soon with daily momentum positive but not yet overbought:
Japanese stock markets sold off however, with the Nikkei 225 closing 1% lower at 33423 points. Futures are indicating a further pullback given the lack of a direction on Wall Street overnight.
Trailing ATR daily support had been ratcheting higher but has paused as the market has been going sideways for over a week now with a welcome consolidation. Daily momentum has retraced nicely from overbought settings but a further retracement back down to that support zone is possible to take more heat out of this overextended trend:
Australian stocks were the best performers yesterday as trader’s loved the RBA pause with the ASX200 closing nearly 0.5% higher at 7279 points.
SPI futures however are down 0.2% or so given the lack of direction from a closed Wall Street overnight with a steep recovery required to get back to the previous weekly highs near ATR resistance at 7300 points. This level may just be too far out of reach as medium term price action from the March highs remains somewhat intact but this bounce may have more legs:
European markets remained in hesitation mode overnight without the Wall Street lead as the Eurostoxx 50 Index finished another 0.1% lower to 4390points.
The daily chart is now showing another clear breakout but the possibility of turning into a bull trap is still around even though weekly support at 4200 points has been continually defended. Weekly resistance at the 4350 points level was the true area to beat and here we are with a succession of higher weekly highs and momentum well supported for more upside potential:
Wall Street was closed for the 4th of July holiday with S&P futures indicating almost no change when traders return to their desk tonight.
The daily chart is still showing a robust market that is now coming up against the monthly downtrend from the 2021 highs with another test of the 4500 point level likely. Friday night saw a sustained breakout above the 4400 point level as short term momentum switched to overbought mode and tossed aside overhead resistance but another move higher is required to get momentum really moving:
Currency markets were mixed given the lack of trading with US banks closed as USD moved higher against Euro but met some resistance in other majors, including the Australian dollar surprisingly given the RBA paused yesterday.
The union currency was pulled below the 1.09 handle after failing to make a new four hourly session high since the start of the trading week, now reverting below the Friday night level almost. The previous attempted breakout to test the April highs above the 1.10 handle has been thwarted so watch for the start of week position just below the 1.09 level to come under threat next:
The USDJPY pair was unable to keep advancing again with a minor pullback to below the mid 144 level after last week almost making yet another record high by briefly breaching the 145 handle.
The previous consolidation back down to trailing ATR support was looking like repeating itself here mid week, 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 however has retraced back from overbought mode as short term price action rolls over in this very steady uptrend:
The Australian dollar was the one to watch yesterday as the dart throwers at Martin Place decided to try pausing rate rises for a new trick and with a mild roundtrip around the mid 65 handle eventually came back to almost breach the 66 level against USD overnight.
This short term price move higher puts the ATR resistance and 200 EMA (black line) under threat as it lurks just below the 67 handle. I still contend this is likely to be short lived as the Fed is expected to be much more aggressive:
Oil markets were able to actually advance overnight with planned production cuts finally changing sentiment as Brent crude lifted above the $76USD per barrel level in several weeks.
Price remains stubbornly anchored around the December levels and the March lows with daily momentum only now switching to positive. 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 is trying to stabilise with a surge at the start of this trading week in an attempt to forget last week’s performace as it bounces off the $1900USD per ounce level to almost back above the previous weekly high at $1924 this morning.
The daily chart had been showing a continued failure to get back above the psychological $2000USD per ounce level , with short term ATR resistance just too far away on any bounceback. All the signs were building here for a complete capitulation below $1930 but the rollover below the $1900 level has not yet eventuated with short term momentum looking to push higher:
