Asian Open: ASX 200 Cautiously Rises to Resistance

The ASX 200 has printed two small bullish candles since Thursday’s sell-off. Now at a pivotal resistance zone, we’re waiting for momentum to reveal its next directional move.

Australia

Asian Futures:

  • Australia's ASX 200 futures are down 14 points (0.19%), the cash market is currently estimated to open at 7,425.20
  • Japan's Nikkei 225 futures are up 100 points (0.33%), the cash market is currently estimated to open at 30,547.37
  • Hong Kong's Hang Seng futures are up 42 points (0.16%), the cash market is currently estimated to open at 25,855.81

UK and Europe:

  • UK's FTSE 100 index rose 39.23 points (0.56%) to close at 7,068.43
  • Europe's  Euro STOXX 50 index rose 19.18 points (0.46%) to close at 4,189.53
  • Germany's DAX index rose 91.61 points (0.59%) to close at 15,701.42
  • France's CAC 40 index rose 13.16 points (0.2%) to close at 6,676.93

Monday US Close:

  • The Dow Jones Industrial fell -269.09 points (-0.0076%) to close at 35,100.00
  • The S&P 500 index rose 10.15 points (0.23%) to close at 4,468.73
  • The Nasdaq 100 index fell -6.245 points (-0.04%) to close at 15,434.50


Indices:

It was a mixed picture on Wall Street with large cap indices initially falling for a fifth day, before recovering in the final hours of the session to post indecision candles (Doji’s). The Nasdaq 100 was down slightly at -0.04% whilst the S&P 500 rose 0.23%. Weighing on sentiment are expectations that the US corporate tax rate will be increased to 26.5% from 21%, although energy stocks led the way higher to throw support under the broader market.

The ASX 200 has gently retraced back to an important resistance zone around 7430-7440, where the 50-day eMA and swing lows reside. Given the strong momentum which broke trend support last week, it remains possible the final corrective low from the August high is not yet complete so we’re waiting to see if bearish momentum returns. The four-hour chart shows a bear-flag forming on the four-hour chart, although futures markets are suggesting the index will open higher around 7425. A break below 7389 assumes bearish resumption whilst a direct break above 7440 brings 7476 and / or the broken trendline into focus for bulls.


ASX 200 Market Internals:


ASX 200: 7425.2 (0.25%), 13 September 2021

  • Materials (1%) was the strongest sector and Real Estate (-0.41%) was the weakest
  • 7 out of the 11 sectors closed higher
  • 4 out of the 11 sectors outperformed the index
  • 96 (48.00%) stocks advanced, 91 (45.50%) stocks declined
  • 64.5% of stocks closed above their 200-day average
  • 79.5% of stocks closed above their 50-day average
  • 43% of stocks closed above their 20-day average

Outperformers:

  • + 7.3%   -  Pilbara Minerals Ltd  (PLS.AX) 
  • + 5.4%   -  Silver Lake Resources Ltd  (SLR.AX) 
  • + 5.4%   -  Lynas Rare Earths Ltd  (LYC.AX) 

Underperformers:

  • -4.5%   -  Omni Bridgeway Ltd  (OBL.AX) 
  • -3.1%   -  Unibail-Rodamco-Westfield SE  (URW.AX) 
  • -2.7%   -  Redbubble Ltd  (RBL.AX) 


Forex:

The US dollar index (DXY) failed to hold on to earlier gains and printed a bearish pinbar and potential double top at 92.86. This coincided with EUR/USD seeing a false break below 1.1800 before closing with a bullish pinbar just above the key level.

There’s plenty of data this week ahead of next week’s FOMC meeting, so we expect the dollar to remain sensitive to incoming data as traders try to decipher whether they will begin to scale back QE. The biggest data point in tonight’s US session is inflation data at 22:30 AEST.

Australian business sentiment is scheduled for 11:30 AEST today. Confidence has fallen for three consecutive months after reaching a peak in April, contracted in July and there’s a decent chance it will fall further today given extended lockdowns and rising COVID-19 cases in the two largest states (New South Wales and Victoria). RBA’s Assistant Governor Ellis speaks at 10:00 AEST and then Governor Lowe speaks at 12:45 AEST.


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Commodities:

Oil prices broke to a 6-week high and WTI closed above $70 as hurricane Ida continued to weigh on supply. Whilst it is a step in the right direction for our bullish bias, volume was below average and it only just closed above last week’s high. So bulls need to firmly gain control sooner than later to avoid prices retreating back into range.  

Silver fell to a 2-week low and found support at the 23.50 low before erasing earlier losses. A bullish pinbar on the daily chart warns of a minor rebound, although our bias remains bearish beneath 24.40 and its target just above 23.0.


Up Next (Times in AEST)

You can view all the scheduled events for today using our economic calendar, and keep up to date with the latest market news and analysis here.


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