- Australia's ASX 200 futures are down -7 points (-0.1%), the cash market is currently estimated to open at 7,291.50
- Japan's Nikkei 225 futures are down -80 points (-0.28%), the cash market is currently estimated to open at 28,794.89
- Hong Kong's Hang Seng futures are down -19 points (-0.07%), the cash market is currently estimated to open at 28,798.07
UK and Europe:
- UK's FTSE 100 index fell -15.95 points (-0.22%) to close at 7,074.06
- Europe's Euro STOXX 50 index fell -47.19 points (-1.14%) to close at 4,075.94
- Germany's DAX index fell -179.94 points (-1.15%) to close at 15,456.39
- France's CAC 40 index fell -60.43 points (-0.91%) to close at 6,551.07
Wednesday US Close:
- The Dow Jones Industrial fell -71.34 points (-0.21%) to close at 33,874.24
- The S&P 500 index fell -4.6 points (-0.11%) to close at 4,241.84
- The Nasdaq 100 index rose 3.827 points (0.03%) to close at 14,274.24
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Indices mixed on Wall Street:
Fed members continued to hit the wires with Bostic saying he’d prefer to complete tapering before raising rates, backing up Powell’s view of prolonged low rates. Yet Bostic and Fed Governor Bowman said separately they agree that the rise in in inflation may last longer than expected.
Stronger factory data helped US stocks start the session on a form footing, with the Markit manufacturing PMI rising to 62.6, up from 62.1 prior. Although the services PMI fell to 64.8 from 70.4, ultimately providing the broader equity market with headwinds. House sales also fell to a one-year low as prices continue to rally.
The Nasdaq 100 squeezed in another record high with its 0.03% gain although it was the FAANG index which outperformed with a 1.4% and closing to its highest level since April. The S&P 500 closed -0.11% lower with only three sectors closing higher (led by consumer discretionary). Utilities and materials were the worst performing sectors. The Dow Jones fell -0.21% and formed a small bearish inside day (after Tuesday’s small Doji), both of which closed beneath the 50-day eMA.
The ASX 200 is expected to open flat today, just below 7300. Given the market is ‘bracketing’ (not making new highs or lows then there’s a chance we could be in for some sticky trading around 7300. Still, it remains above it 20-day eMA (7262) so we may find some support around this level its next support zone sitting between 7200 – 7216.0.
ASX 200 Market Internals:
ASX 200: 7298.5 (-0.60%), 22 June 2021
- Information Technology (1.1%) was the strongest sector and Healthcare (-1.36%) was the weakest
- 9 out of the 11 sectors closed lower
- 75 (37.50%) stocks advanced, 116 (58.00%) stocks declined
- 14 hit a new 52-week high, 0 hit a new 52-week low
- 74% of stocks closed above their 200-day average
- 64.5% of stocks closed above their 50-day average
- 59% of stocks closed above their 20-day average
- + 8.46% - Washington H Soul Pattinson and Company Ltd (SOL.AX)
- + 6.44% - Zip Co Ltd (Z1P.AX)
- + 4.53% - Boral Ltd (BLD.AX)
- -6.90% - Redbubble Ltd (RBL.AX)
- -5.27% - Pro Medicus Ltd (PME.AX)
- -3.52% - Flight Centre Travel Group Ltd (FLT.AX)
Forex: The dollar’s downside is waning
It was another risk-on session for currencies with carry trades NZD/JPY and AUD/JPY leading the way higher. The Japanese and Swiss franc were the weakest currencies overnight as traders offloaded their safe-haven bets.
The US dollar index (DXY) closed beneath its 200-day eMA for a second day, yet formed a small bullish Doji to suggest downside momentum is waning. We’d need to see a break above last week’s high (50-week eMA) before assuming bullish continuation, but the dollar appears to be in a corrective phase against last week’s gains, as opposed to a complete reversal of them. Moreover, the US dollar remains the strongest currency month-to-date.
EUR/USD closed below its 200-day eMA and formed a small bearish doji, so perhaps a swing high is indeed in place for the euro. USD/JPY saw an intraday break above the March high yet practically closed on it. The daily trend structure remains bullish and the divergent theme between the Fed and BOJ remains favourable for further upside overall.
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Gold is not taking advantage of the dollars pullback
The fact that gold bulls have not made better use of a weaker dollar is very telling. If dollar strength is to return (which it looks like it wants to on DXY) then gold could be set for another leg lower. So we have taken great interest in the resistance zone between 1800 – 1811 comprising of the 200-day / 100-day eMA, monthly S1 pivot and prior support level as we suspect these will be tough levels to crack, even if the dollar were to roll over tomorrow. Yesterday produced a bearish pinbar after yet (another) failed attempt to retest 1800, so we suspect the market is trying to top out. And tomorrow’s core CPI report could be key to making that occur.
Copper prices continued to climb after the Fed vowed to keep rates low. Prices broke cleanly back above trendline resistance and the weekly pivot point and rose to a four-day high, but meeting resistance at its 10-day eMA. Whilst momentum remains favourable to bulls over the near-term, there are a host of technical levels for bulls to overcome between 4.35 and 4.50 so we’ll see how prices react around such levels to see which camp hold the cards (given that gross shorts have been trending higher all year so far).
WTI printed an intraday breakout yet closed below the prior high with a bearish hammer, warning of near-term exhaustion to the trend. Prices had run higher earlier in the session as crude inventories fell more than expected, suggesting a tightening of the supply-demand balance.
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