Asian Open: USD Extends Rally on Low Jobless Claims and Taper Talk

It seems the FOMC minutes released dollar-bull genies from the bottle this week, with employment claims adding fuel to the fire.


Asian Futures:

  • Australia's ASX 200 futures are up 34 points (0.46%), the cash market is currently estimated to open at 7,498.60
  • Japan's Nikkei 225 futures are up 50 points (0.18%), the cash market is currently estimated to open at 27,331.17
  • Hong Kong's Hang Seng futures are up 95 points (0.38%), the cash market is currently estimated to open at 25,411.33

UK and Europe:

  • UK's FTSE 100 index fell -110.46 points (-1.54%) to close at 7,058.86
  • Europe's  Euro STOXX 50 index fell -64.71 points (-1.54%) to close at 4,124.71
  • Germany's DAX index fell -200.16 points (-1.25%) to close at 15,765.81
  • France's CAC 40 index fell -164.22 points (-2.43%) to close at 6,605.89

Thursday US Close:

  • The Dow Jones Industrial fell -66.57 points (-0.19%) to close at 34,894.12
  • The S&P 500 index rose 5.53 points (0.13%) to close at 4,405.80
  • The Nasdaq 100 index rose 76.011 points (0.51%) to close at 14,933.94

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US indices move cautiously higher

US employment claims fell for a fourth consecutive week to 248k, falling -29k from last week to its lowest level since March 2020. Continuing jobless claims fell got a third week to 2.82 million (-79k from prior) and also sits at a pandemic low.

Wall Street initially gapped lower but recouped losses. The S&P 500 rose 0.13% and printed its first bullish candle since Monday, although found resistance at its 20-day eMA and is on track for a bearish outside week. Energy and material stocks weighed on the broader index whilst technology consumer staples provided support. S&P 500 growth stock underperformed and rose 0.6%, whilst value fell -0.61%.

The Nasdaq 100 was the stronger performer at 0.76%, with Synopsis (SNPS) at the top of the leader board with a 7.8% gain after UBS upgraded their price target to 345. It currently trades at 315.99.

ASX 200: Correction complete?

Futures markets point to a positive open for the ASX 200 today, and we suspect a swing low may have (if not already) formed. It remains in a strong uptrend on the daily chart, although it has retraced for four consecutive days for the first time this year (which suggest mean reversion could take momentum back to the trend’s direction). RSI (2) is also very overbought. Price action found support at the 34-day eMA and top of the 7368 – 7448 support zone. Should prices falter today we’d like to see them hold above 7465, which was yesterday’s POC (point of control, the most actively traded price).

ASX 200 Market Internals:

ASX 200: 7464.6 (-0.50%), 19 August 2021

  • Healthcare (1.95%) was the strongest sector and Materials (-3.68%) was the weakest
  • 5 out of the 11 sectors closed higher
  • 7 out of the 11 sectors closed lower
  • 7 out of the 11 sectors outperformed the index
  • 93 (46.50%) stocks advanced, 97 (48.50%) stocks declined
  • 68% of stocks closed above their 200-day average
  • 60.5% of stocks closed above their 50-day average
  • 63.5% of stocks closed above their 20-day average


  • + 18.95%   -  Redbubble Ltd  (RBL.AX) 
  • + 17.42%   -  NRW Holdings Ltd  (NWH.AX) 
  • + 14.24%   -  Chorus Ltd  (CNU.AX) 


  • -8.28%   -  Codan Ltd  (CDA.AX) 
  • -7.57%   -  Sims Ltd  (SGM.AX) 
  • -6.61%   -  Mineral Resources Ltd  (MIN.AX) 

Forex: Dollar remains king

The US dollar remained at the top of the leader board. The US dollar index (DXY) closed to a 9-month high, which saw EUR/USD hold onto a break below the March 2020 low. Incidentally, the potential countertrend bounce we flagged in yesterday’s European open played out and respected the March 2020 low as resistance before moving back to its 9-month low. We remain bearish below 1.1704.

The Canadian dollar was the weakest major as falling oil prices continued to weighed on the Loonie. USD/CAD was the stronger major pair and rose to a 6-month high with its daily range hitting around 250% of its 10-day ATR.

The Japanese yen continues to receive safe-haven inflows, which saw CAD/JPY plummet -1.4% and break trend support from the October low. The next line of defence for bulls is the July low of 85.43, which prices are close to testing at the time of writing.

The Australian dollar remains very much unloved, falling lower against all but the Canadian dollar. GBP/AUD hit a 15-month high, AUD/JPY hit its lowest point this year. Bearish momentum for the Aussie overall remains strong but we have reached that phase of the move where it is difficult to enter as it risks joining the party late (FOMO), yet could still drop lower. Therefore bears may want to stick to intraday timeframes and remain nimble whilst keeping an eye on the US dollar index to see if it can hold above the March high.

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Commodities weaker on multiple fronts.

The Thomson Reuters CRB commodity basket slid for a fourth day, as commodities in general face multiple forces such as the stronger dollar, tapering (less stimulus to support prices), weak China data and of course that COVID-19 thing you may have heard of.

Copper futures continued to slide and hit our target, briefly fell below $4.00 before recovering slightly to 4.039. Platinum hit our initial target of 954 and we remain bearish below 1000. Silver is grinding lower but palladium is clearly where the action was yesterday as it slid to a 5-month low. And, not wanting to miss out, oil fell for a sixth consecutive day.

Gold remains relatively unscathed, falling just -0.4% but continues to show the potential for a bullish flag. We just need to see dollar strength take a pause, although that is currently up for debate.

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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