Asian Open: Tech Stocks Lead, GBP/NZD Accelerates Lower
Matt Simpson October 18, 2021 11:12 PM
A slightly mixed session on Wall Street saw the S&P 500 and Nasdaq move higher whilst the Dow Jones lagged following weak industrial data.
- Australia's ASX 200 futures are down -20 points (-0.27%), the cash market is currently estimated to open at 7,361.10
- Japan's Nikkei 225 futures are up 160 points (0.55%), the cash market is currently estimated to open at 29,185.46
- Hong Kong's Hang Seng futures are up 99 points (0.39%), the cash market is currently estimated to open at 25,508.75
UK and Europe:
- UK's FTSE 100 index fell -30.2 points (-0.42%) to close at 7,203.83
- Europe's Euro STOXX 50 index fell -31.51 points (-0.75%) to close at 4,151.40
- Germany's DAX index fell -112.89 points (-0.72%) to close at 15,474.47
- France's CAC 40 index fell -54.42 points (-0.81%) to close at 6,673.10
Monday US Close:
- The Dow Jones Industrial fell -36.15 points (-0.1%) to close at 35,258.61
- The S&P 500 index rose 15.09 points (0.34%) to close at 4,486.46
- The Nasdaq 100 index rose 153.967 points (1.02%) to close at 15,300.89
Indices: Chip shortages weigh on output
Manufacturing production fell -0.7% in September due to the global shortage of semiconductors. Industrial production fell -1.3% in September its worst month in 5 and rose 4.6% y/y, down from 5.66% which was revised lower from 5.95%. The Dow Jones fell -0.1% by the close, weighed down by Walt Disney (DIS), Amgen (AMGN) and Travelers (TRV).
Tech stocks were the stronger performers with the Nasdaq 100 rising 1% and printing a bullish engulfing candle on the daily chart. This places gap support around 15,064 and the next key level for bulls to conquer is the 15,365 high.
ASX 200 Market Internals:
ASX 200: 7381.1 (0.26%), 18 October 2021
- Materials (1.04%) was the strongest sector and Information Technology (-1.24%) was the weakest
- 6 out of the 11 sectors closed higher
- 4 out of the 11 sectors outperformed the index
- 91 (45.50%) stocks advanced, 102 (51.00%) stocks declined
- 65.5% of stocks closed above their 200-day average
- 49.5% of stocks closed above their 50-day average
- 58% of stocks closed above their 20-day average
- + 5.1%-Nickel Mines Ltd(NIC.AX)
- + 4.9%-Orocobre Ltd(ORE.AX)
- + 4.8%-Lynas Rare Earths Ltd(LYC.AX)
- -4.6%-Kogan.com Ltd(KGN.AX)
- -3.8%-EML Payments Ltd(EML.AX)
- -3.7%-Domino's Pizza Enterprises Ltd(DMP.AX)
Forex: NZD maintains top spot on the leader board
NZD retained its place at the top of the leader board throughout all three sessions yesterday, after hot inflation all but confirmed another rate hike from RBNZ this year. JPY weakened for a 3rd consecutive session although volatility subsided as momentum waned.
AUD/USD closed the day with a wide legged Doji, after Friday’s bearish pinbar found resistance at the 200-day eMA and monthly R1 pivot. At the very least it suggests a pause in trend is now underway, although some metrics suggest it is time for the Aussie to retrace.
USD/CAD closed slightly higher during another choppy session although prices remain confined within a tight bearish channel on the four-hour chart. Our bias is for a move to 1.2300 once its current consolidation period is complete.
EUR/NZD fell to its lowest level since February, although is on track to close with a wide-legged Doji (volatile indecision candle) which suggests the downside move may need to pause for breath before its trend continues lower.
GBP/NZD was on our ‘shortlist’ in September after it broke trend support. Yet its tendency of grinding marginally higher meant it dropped by the wayside. Still, bearish momentum has clearly returned after it seemingly topped out where the 50% retracement level met the broken trendline.
Prices are probing the monthly S1 support level ahead of a potential break beneath the 1.9340 low. A break beneath of which brings the monthly S2 and 1.9175 lows into focus. Hopefully a break lower can materialise without it breaking above the monthly pivot point.
There is very little in the way of economic data today. However, RBA release their monetary policy minutes at 11:30 AEDT, although we doubt it will be a market mover with RBA continuing to be one of the more dovish central banks out there. BOE Governor Andrew Bailer speaks at, then FOMC members Daly, Bowman, Bostic and Waller speak in the early hours between 02:00 and 06:00 tomorrow.
Commodities: Bearish hammer on WTI
WTI printed a bearish hammer on above-average volume, having found resistance at the 83.0 handle. We suspect we could now be headed for a choppy period, although that is not to say it will trigger an outright correction. Therefore, traders may want to drop to lower timeframes and not look for oversized moves without an apparent catalyst driving its direction.
The breakout from the inverted head and shoulders pattern on silver’s daily chart is currently lacking any follow-through. It is holding above the $23 neckline (just) so bulls need to get their skates on to keep this pattern alive. A break beneath $23 invalidates the bias, and a break above Monday’s high is required to keep it alive.
Up Next (Times in AEDT)
How to trade with FOREX.com
Follow these easy steps to start trading with FOREX.com today:
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.