Macro Morning – MacroBusiness

U.S. stocks surged on Friday amid mixed employment numbers in the latest nonfarm payrolls (NFP) and the breakdown of China’s COVID zero policy, as traders discounted the Fed’s recent rate hike . The USD lost a lot of ground against the major currency pairs, with the Euro bouncing back up to the 99 level, the Australian Dollar almost back to its recent high at the 65 cent level. US bond markets saw their curve flatten further, with 10-year Treasury yields remaining above the 4.15% level, while commodities were strong on the weaker US dollar, crude Brent returning almost to the level of USD 98 per barrel, while gold soared to almost end at USD 1,700 per barrel. ounce level.

Turning to equity markets in Asia since Friday’s session, mainland Chinese equity markets jumped out the door and continued to surge towards the close, with the Shanghai Composite ending up 2.3% higher at 3070 points. Meanwhile, the Hang Seng index surged again, up more than 5% to finally break out of its sell funk, breaking through the 16,000 level to close at 16,161. The daily chart showed potential action on the bottom last week, although I was suspicious if this was long-lasting action or just short cover. Just below this level are the 2008 lows, as the 15,000 point level was the key area to watch for signs of breaking support, but here is a bullish engulfing candle that has almost cleared the trailing ATR resistance, so we could see a continuation of a meltdown rally as the new trading week begins:

Japanese stock markets were the oddest, with the Nikkei 225 falling sharply to close down 1.6% at 27,199 points. The daily price chart showed a possible breakout brewing here under overhead resistance at the 27500 level, but Wall Street’s previous mixed lead and lack of internal confidence kept things at bay. Futures are pointing to a better start to the trading week, with momentum still quite positive if not overbought levels, but watch the price action which appears to be stuck below resistance at the 27,600 point level:

Australian stocks had a subdued weekend with the ASX200 closing up 0.5%, returning almost above the 6900 point level to end at 6892 points. SPI futures are up over 1.3% on Friday night’s surge on Wall Street, so we may see the 7,000 point level finally cleared, bringing price action back to the high. of August. The daily chart looked a lot like Japanese equities, with the big breakout after the RBA meeting, but yet another wild rebound underway as the uptrend from the October lows is still fairly intact. Daily momentum has held above the positive zone and is solidly overbought again, but watch for support below at the lower moving average as an uncle point:

European markets also surged higher after the recent BOE rate hike, with the Eurostoxx 50 index gaining 2.6% to 3,688 points in one of its best sessions in weeks. The daily chart also showed price action similar to the Asian markets, but with much more momentum as it cleared resistance at the 3550 level and based here in the 3600 point area. Daily momentum is back to overbought levels and ready to push even higher with recent lows in the 3550 point area providing an easy uncle point to further test this rally:

Wall Street had a yo-yo session to say the least and while the finish was good – the NASDAQ and S&P500 both up 1.3% – in relative terms it may not be enough. good compared to other markets. In fact, the NASDAQ daily chart still looks quite weak, as does the S&P daily below with price action above the 3700 point barrier but far from its recent highs and still below the trendline. bullish from October lows. I still maintain that the aggressive actions of the Fed cannot change a return to the 3600 point level here by the end of the year, with the upcoming midterm elections perhaps providing a catalyst for more selling:

Currency markets, however, saw the biggest moves after the rise in NFP printing, with the USD crushed by currency majors in a one-way move, unlike the yo-yo on Wall Street. The Euro had a big reversal, lifting almost 200 pips to almost return to parity and making up for all the dips in the trading week. The Union currency is likely to take a break here below the magical 1.00 level as momentum plays on near-term catch-up, so watch for a possible return to the 99 low tonight:

USDJPY saw a slight dip to end the week just above the 146 level after its recent wild run after the FOMC meeting, with volatility easing down here to the mid support level of 146. This brings the pair back on the short-term downtrend line with an inability to breach the previous intrasession high at the 148.80 level and no positive critical overbought momentum:

The Aussie dollar also climbed in line with the other majors, heading straight for the 65 level to hit a new weekly high, ending just below previous highs at the 65 handle proper. I still maintain that resistance is still too strong at all previous levels with the 65 handle still the area to beat in the medium term as traders will now position themselves lower as the Fed is much more hawkish than the boffins at Martin Place . The short-term momentum is in a similar position to the Euro with potential for a retracement at the open here this morning:

Oil markets are trying to regain some of their recent loss of confidence as the Saudi and Iranian turmoil continues, with Brent crude rising Friday evening, hitting former October highs at $98 a barrel. The daily momentum is really building here with stronger overbought readings with price action wanting to get back to the magic $100 level with shorter term resistance at the $98 level, the area that will likely clear next:

Gold was under more pressure than any other sub-Dollar, so it’s no surprise that it climbed higher than most, with a quick return to previous October highs near the $1700 level per ounce (upper horizontal black line). This signifies a re-examination of the prevailing downtrend, putting at least short-term doubt as overhead resistance at the $1675 level has been cleared, negating a return to October lows at $1600. The price action has gotten ahead of itself somewhat, so I expect a small retracement, but then a lot of new buyers will step in shortly:

Glossary of technical analysis acronyms and terms:

ATR: Average True Range – measures the degree of price volatility averaged over a period of time

ATR Support/Resistance: a ratchet mechanism that follows the price below/above a trend, which when exceeded shows above-average volatility

CCI: Commodity Channel Index: a dynamic reading that calculates the current price away from the statistical average or “typical” price to indicate overbought (well above the average) or oversold (well below the average)

Moving Average Low/High: price moving average in this case the low and high for the day/hour which creates a band around the actual price movement

FOMC: Federal Open Market Committee, monthly meeting of the Federal Reserve concerning monetary policy (setting of interest rates)

DOE: US Department of Energy

Uncle Point: or stop loss point, a level at which you have clearly mistaken your position, so shout uncle and get out!badly about your position, then shout uncle and get out!

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