09.11.23 Macro Morning
Chris Becker | Nov 09, 2023 10:01
Another very mixed overnight session with Wall Street eventually putting in scratch sessions despite a positive European session as bond markets outweighed risk sentiment with pricing for further Fed rate rises almost back to neutral settings. The USD was largely unchanged with the Australian dollar pulling back to the 64 cent level after pricing in the RBA rate rise already.
US bond markets saw another slight drop across the yield curve with 10 year Treasuries falling back to the 4.5% level while oil prices dropped sharply again with Brent crude now back to a monthly low at the $79USD per barrel level. Gold continues to lose momentum as it fails to get back above the $2000USD per ounce level, dropping through the $1950 level this morning.
Looking at share markets in Asia from yesterday’s session where mainland Chinese share markets were again largely unchanged with the Shanghai Composite losing 0.1% to close at 3052 points while in Hong Kong the Hang Seng Index continued its retreat to fall back 0.6% and close at 17568 points.
The daily chart is still showing a significant downtrend that has gone below the May/June lows with the 19000 point support level a distant memory as medium term price action stays well below the dominant downtrend (sloping higher black line) following the previous month long consolidation. Daily momentum readings however are now well out of oversold mode with the small potential for a fill in rally here above ATR resistance at the 18000 point level:
Japanese stock markets remained in a downcast mood with the Nikkei 225 losing more than 0.3% to finish at 32166 points.
Trailing ATR daily resistance was coming under threat in a very fast bounceback with daily momentum retracing back from oversold settings to make a new weekly high here. Futures are indicating another slight pullback on the open with the September highs at the 33000 point level remaining the upside target to beat:
Australian stocks were the only highlight with a positive finish for the ASX200, closing some 0.3% higher to 6995 points, again just shy of former support at 7000 points.
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SPI futures are up 0.4% despite the wobbles on Wall Street so we could see the 7000 point resistance level come under pressure. The daily chart is still not looking optimistic here in the medium term but short term price action is trying to fill a hole here:
European markets were able to finally find some positive momentum with the Eurostoxx 50 Index gaining some 0.6% to close at 4178 points.
The daily chart still shows an overall decline with weekly support at 4100 points no longer defended, as weekly resistance firms at the 4300 point resistance level. There were signs the previous little bounce was running out of steam as daily momentum remained neutral at best, with a rebound out of oversold settings now encroaching on trailing ATR resistance above but possibly turning into a dead cat bounce:
Wall Street however had the wobbles after a positive session that regained momentum as the NASDAQ finished flat while the S&P500 gained only 0.1% to finish at 4382 points.
Short term momentum remains only slightly overextended after last week’s rally as price action bounced strongly off the recent low at the 4100 point level. There is the potential for a retracement back to trailing ATR support on the four hourly chart back down to the 4330 point level to take some heat out of this:
Currency markets are reducing somewhat in volatility but keep bouncing around on central bank speak with USD basically unchanged overnight although Euro did bounce back later in the session to just pip through the 1.07 handle.
The current consolidation was after the union currency was unable to extend its Friday night gains and is now in a neutral condition, if slightly bullish. Support at the recent weekly lows around the 1.05 level was tested before the Fed meeting last week and now it seems the recent tow week high at the 1.0670 level has become the new short term support which is likely to hold here:
The USDJPY pair held on and then continued its weekend gap rebound with another attempt at getting back above the 151 handle overnight.
Four hourly momentum is now pushing back into overbought settings with price action now returning back above the previous ATR support level. Watch for a potential consolidation here with increased volatility:
The Australian dollar however remains on a downward track after retracing all of its post NFP bounce, following the RBA meeting and rate rise which has seen it fall back to the 64 cent level proper.
The Pacific Peso remains under medium and long term pressure but if it can hold above this price point there is potential to slowly build higher again as the RBA goes against most of the other central banks interest rate agenda, but watch short term momentum closely:
Oil markets have been building in volatility in the wake of growing conflict in the Middle East with a series of retracements leading to a proper breakdown with Brent crude following through and slumping down to the $79USD per barrel level.
After almost reaching $100 in mid September, price was looking to return to the August levels around the $85 area where a point of control had been established before the recent breakout. Daily momentum is now well oversold settings with this failed test of support at the August level setting up for further falls below:
Gold is slowly losing its grip as the best undollar as its former strong position following its breakthrough the $2000USD per ounce level as it breaks daily support at the $1970 area and fell back to the $1950 level overnight.
While this new breakout put in a new monthly high, daily momentum was looking overbought and ripe for a pullback back to retest the $1900 level, as ATR support on the four hourly chart becomes the next target so watch below:
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