Asian Open: ASX set to rally from 7200?

It is still early days in the month, but we are now pondering whether the low for December is already in place for the ASX 200.

Australia

Asian Futures:

  • Australia's ASX 200 futures are up 52 points (0.72%), the cash market is currently estimated to open at 7,277.20
  • Japan's Nikkei 225 futures are up 140 points (0.5%), the cash market is currently estimated to open at 27,893.37
  • Hong Kong's Hang Seng futures are down -165 points (-0.7%), the cash market is currently estimated to open at 23,623.93
  • China's A50 Index futures are down -2 points (-0.01%), the cash market is currently estimated to open at 15,455.37

UK and Europe:

  • UK's FTSE 100 index fell -39.47 points (-0.55%) to close at 7,129.21
  • Europe's Euro STOXX 50 index fell -71.13 points (-1.7%) to close at 4,108.02
  • Germany's DAX index fell -209.56 points (-1.35%) to close at 15,263.11
  • France's CAC 40 index fell -86.12 points (-1.25%) to close at 6,795.75

Wednesday US Close:

  • The Dow Jones Industrial rose 617.75 points (1.82%) to close at 34,639.79
  • The S&P 500 index rose 64.06 points (1.42%) to close at 4,577.10
  • The Nasdaq 100 index rose 113.045 points (0.71%) to close at 15,990.76
20211203moversFX

Equity markets shook off news of a second Omicron case in the US

US Employment claims were lower than expected whilst layoffs were at their lowest level in over 28-years. News that a second Omicron case had hit US shores failed to dent sentiment any further on Wall Street, with S&P 500 and Dow Jones both rising over 1.5%.

The Nasdaq recouped around 0.8% of Wednesday’s losses yet remained beneath the neckline of its head and shoulders top pattern on the daily chart. Support was found at the weekly S1 pivot and a decent break above yesterday’s high would invalidate the pattern, whilst a break of yesterday’s low keeps the pattern in play and targets 15,200.

Safe havens offered as risk-off tone recedes

Safe havens currencies JPY and CHF were the weakest majors overnight whilst GBP and NZD were the strongest during the relatively upbeat session. But perhaps a clearer indication that appetite for risk is improving is if we see CHF/JPY rally. Its move from the November high appears corrective and the retracement is hovering around the June highs, so we’re looking out for bullish momentum to return and signal a bout of risk-on.

The dollar is torn between hawkish Fed and Omicron

Cast your mind back to last Friday, where two cases of the new Covid variant were confirmed in Hong Kong. The US dollar index fell over 2% during its worst session since March 2020. Yet since then, we have had surprisingly hawkish comments from Jerome Powel. So, if Omicron can be contained it opens up the doors for another round of dollar buying.

113 remains a key battleground on USD/JPY. It held above this key level on renewed Covid fears, so if those fears subside 113 makes a likely springboard for bulls. But it also keeps AUD under pressure as it flirts with 71c. On one hand the Aussie appears stretched to the downside and in need of a pullback but yield differentials don’t care for such logic – so look prepare for 70c on the Aussie if the dollar finally gets to enjoy that hawkish-Fed bid.

ASX 200 solidifies support at 7200

20211202asx200FX It is still early days in the month, but we are now pondering whether the low for December is already in place. We know that December is usually favourable for bulls looking at seasonal analysis, although it is usually the second half of December before Santa’s rally truly kicks in. And as Omicron is still touch and go, we are prepared for some choppy price action over the near-term. But technically a case is building for gains. A third bullish hammer formed over the past four days at the 200-day eMA, Wall Street closed higher and ASX futures point to a gap higher today. From here we would want to see prices hold above yesterday’s low and to rally above 7337. But if prices hold above yesterday’s high before they rally then its hints at a stronger up leg. A break above the 100-dy eMA assumes trend continuation.  

ASX 200: 7225.2 (-0.15%), 02 December 2021

20211203moversASXfx
  • Utilities (1.5%) was the strongest sector and Information Technology (-3.19%) was the weakest
  • 4 out of the 11 sectors closed higher
  • 7 out of the 11 sectors closed lower
  • 4 out of the 11 sectors outperformed the index
  • 62 (31.00%) stocks advanced, 123 (61.50%) stocks declined
  • 53% of stocks closed above their 200-day average
  • 27.5% of stocks closed above their 50-day average
  • 20% of stocks closed above their 20-day average

Outperformers:

  • + 6.11%-Worley Ltd (WOR.AX)
  • + 3.99%-AGL Energy Ltd (AGL.AX)
  • + 3.13%-Fletcher Building Ltd (FBU.AX)

Underperformers:

  • -6.47%-Netwealth Group Ltd (NWL.AX)
  • -6.08%-Afterpay Ltd (APT.AX)
  • -5.87%-Orocobre Ltd (ORE.AX)

Up Next (Times in AEDT)

20211203calendarAEDT

 

 

 

How to trade with FOREX.com

Follow these easy steps to start trading with FOREX.com today:

  1. Open a Forex.com account, or log in if you’re already a customer.
  2. Search for the pair you want to trade in our award-winning platform.
  3. Choose your position and size, and your stop and limit levels.
  4. Place the trade.

Disclaimer: The information on this web site is not targeted at the general public of any particular country. It is not intended for distribution to residents in any country where such distribution or use would contravene any local law or regulatory requirement. The information and opinions in this report are for general information use only and are not intended as an offer or solicitation with respect to the purchase or sale of any currency or CFD contract. All opinions and information contained in this report are subject to change without notice. This report has been prepared without regard to the specific investment objectives, financial situation and needs of any particular recipient. Any references to historical price movements or levels is informational based on our analysis and we do not represent or warranty that any such movements or levels are likely to reoccur in the future. While the information contained herein was obtained from sources believed to be reliable, author does not guarantee its accuracy or completeness, nor does author assume any liability for any direct, indirect or consequential loss that may result from the reliance by any person upon any such information or opinions.

Futures, Options on Futures, Foreign Exchange and other leveraged products involves significant risk of loss and is not suitable for all investors. Losses can exceed your deposits. Increasing leverage increases risk. Spot Gold and Silver contracts are not subject to regulation under the U.S. Commodity Exchange Act. Contracts for Difference (CFDs) are not available for US residents. Before deciding to trade forex and commodity futures, you should carefully consider your financial objectives, level of experience and risk appetite. Any opinions, news, research, analyses, prices or other information contained herein is intended as general information about the subject matter covered and is provided with the understanding that we do not provide any investment, legal, or tax advice. You should consult with appropriate counsel or other advisors on all investment, legal, or tax matters. References to Forex.com or GAIN Capital refer to GAIN Capital Holdings Inc. and its subsidiaries. Please read Characteristics and Risks of Standardized Options.

Open an Account