09.06.23 Macro Morning

Wall Street was able to advance overnight with a higher than expected initial jobless claims print pushing USD lower and helping lift risk expectations as the focus gathers on next week’s FOMC meeting.

Currency markets had been under the sway of King Dollar for sometime so a relief rally in Euro sent it back through the 1.07 handle while the Australian dollar also pushed well into the 67 cent level as it gathers pace following the recent RBA rate hike.

Meanwhile US Treasury yields retraced sharply on the jobless claims number with the 10 year up down nearly 10 pips to almost through the 3.7% level while oil prices pulled back slightly, with Brent crude again finishing just below the $75USD per barrel level. Gold was able to bounce back alongside the other undollars to finish back above the $1960USD per ounce level.

Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were dead flat until a blip at the close saw the Shanghai Composite gain nearly 0.5% to close at 3213 points, while the Hang Seng Index was able to lift 0.3% to finish at 19299 points.

The daily chart has been showing a decline through support at the 19500 point level with what looked like a terminal decline back to the start of year correction level well below 19000 points with a failure to make any new weekly highs since early April. This looked poised for another breakdown but several strong bounces is seeing the 19000 point level come under threat so watch daily ATR resistance here to break to make this bounce stick:

Japanese stock markets however had their second selloff in a row with the Nikkei 225 closing more than 0.8% lower at 31641 points. Futures are indicating some potential downside on the open that could finally arrest the current trajectory which looks unsustainable.

Trailing ATR daily support keeps ratcheting higher as the 32000 point level is now breached with daily momentum still above overbought settings as this market remains very well supported by a weaker Yen. But I do wonder how sustainable this is with the current daily candle looking very toppy indeed:

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Australian stocks were still licking their wounds with ASX200 closing nearly 0.4% lower at 7099 points.

SPI futures are up nearly 0.4% on the bounce on Wall Street overnight with that entrenched downtrend still leading to an unsettled market again. Daily momentum is switching back to the oversold zone as price action remains near its new monthly low.

Price action has been unable to break above the high moving average band with anchoring around support at the 7100 point area:

European markets were a little mixed again with the FTSE pulling back while scratch sessions and some gains across the continent saw the Eurostoxx 50 Index drifting some 0.1% higher to finish at 4293 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 or further consolidation is likely as this market slides sideways:

Wall Street was finally able to build some optimism, led by tech stocks this time with the NASDAQ lifting more than 1% while the S&P500 gained just over 0.6% to remain well above the 4200 key level, finishing at 4293 points.

The four hourly chart shows how support has been relatively strong above the 4100 point level with the post NFP bounce still holding well above the 4200 point area which had been medium term resistance (upper black line). This clears the previous lack of conviction to confirm a new uptrend, but watch the low moving average for any signs of selling:

Currency markets remains on their dominant USD trend post the NFP print with only the Loonie advancing against King Dollar due to a surprise rate hike, the Euro is again looking to go nowhere, still stuck below the 1.07 handle.

Price action was a little volatile overnight but looking through the four hourly chart shows a sideways at best condition with short term momentum still somewhat negative. The union currency is still primarily on a downtrend with the 1.08 handle proving short term resistance:

The USDJPY pair had another go at beating through resistance with another push through the 140 level overnight after previously stalling here at the mid 139 level.

The previous consolidation back down to trailing ATR support could be repeating itself here without any new daily or weekly highs for awhile now, which could become a medium term consolidation. Watch support at the 139 level proper:

The Australian dollar remains one of the more robust undollars but did suffer a pullback after a brief look through of the 67 cent level, settling at the mid 66 level instead with the post RBA rate hike bounce still intact.

There had been some hesitation building previous to the RBA meeting, but the Pacific Peso still needs to clear previous overhead resistance at 67 cents to make this bounce stick, so while short term momentum is nicely overbought, watching for building resistance here:

Oil markets are trying to get out of their recent funk with Brent crude consolidating again overnight at the $76USD per barrel level, despite a recovery in USD and wider energy problems escalating in Europe.

This still keeps price below the December levels (lower black horizontal line) after breaching trailing ATR support previously with daily momentum now trying to get out 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 had a big fail in its comeback following the BOC rate hike overnight sending USD higher, pushing it right back down to the $1940USD per ounce level.

The four hourly chart had been showing a lot of oscillation around the $1960 level in recent weeks but with a continued failure to get back above the psychological $2000USD per ounce level still holding it back, let alone short term resistance here. This rollover sends it back to the weekly lows so watch for signs of capitulation below $1930:

 

Written By: Chris Becker