Asian Open: USD, Wall Street and yields lower, AU Employment next

With yields resisting a break to new highs, the US dollar slipped to a one-month low allowing antipodeans to take top spot on the leader board, ahead of today’s Australian employment report.

Australia

Asian Futures:

  • Australia's ASX 200 futures are down -23 points (-0.33%), the cash market is currently estimated to open at 7,000.10
  • Japan's Nikkei 225 futures are down -20 points (-0.07%), the cash market is currently estimated to open at 29,600.99
  • Hong Kong's Hang Seng futures are down -153 points (-0.53%), the cash market is currently estimated to open at 28,747.83

UK and Europe:

  • The UK's FTSE 100 futures are up 36.5 points (0.53%)
  • Euro STOXX 50 futures are down -1 points (-0.03%)
  • Germany's DAX futures are down -69 points (-0.45%)

Wednesday US Close:

  • The Dow Jones Industrial rose 53.62 points (0.16%) to close at 33,730.89
  • The S&P 500 index fell -16.93 points (-0.41%) to close at 4,124.66
  • The Nasdaq 100 index fell -182.58 points (-1.31%) to close at 13,803.91


ASX 200 Market Internals


ASX 200: 7023.1 (0.66%), 14th April 2021

  • Information Technology (2.05%) was the strongest sector and Consumer Staples (0.05%) was the weakest
  • 4 out of the 11 sectors outperformed the index
  • 126 (63.00%) stocks advanced and 58 (29.00%) declined
  • 0 hit a new 52-week high, 0 hit a new 52-week low
  • 77% of stocks closed above their 200-day average
  • 76% of stocks closed above their 50-day average
  • 80.5% of stocks closed above their 20-day average

Outperformers

  • + 14.9%   -  Resolute Mining Ltd  (RSG.AX) 
  • + 6.72%   -  Perseus Mining Ltd  (PRU.AX) 
  • + 6.54%   -  Mineral Resources Ltd  (MIN.AX) 

Underperformers:

  • -3.70%   -  Credit Corp Group Ltd  (CCP.AX) 
  • -2.93%   -  Monadelphous Group Ltd  (MND.AX)  
  • -2.64%   -  Webjet Ltd  (WEB.AX) 

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Forex: Dollar down, antipodeans up

AUD and NZD were hands down the strongest currencies, with both majors rising over 1%, whilst CHF and USD were the weakest. The New Zealand dollar dominated the leader board, taking top spot against JPY, CAD, USD, CHF, EUR and GBP. The US dollar index (DXY) fell to a one-month low and our initial target around the 91.30 lows remains intact. EUR/USD is just 20 pips below the 1.2000 barrier after closing to a one-month high.

The Australian dollar was mostly higher against its peers (barring NZD) and is in a firm position ahead of today’s employment data.

  • AUD/USD broke above 0.7677 resistance and the neckline to invalidate the head and shoulders top pattern although, as previously mentioned, it had already spent too long near the neckline to be construed as a breakout from a reversal pattern.
  • AUD/CAD closed to a three-week high with a firm close above 0.9644 resistance.
  • GBP/AUD finally saw a downside break of its bullish channel and is now targeting the 1.7700 low, whilst prices remain beneath yesterday’s high. Although the trendline break on the daily chart ultimately targets the 1.7420 low, where the trendline began.


AUD/JPY rose to a six-day high during risk-on trade. It remains in a strong uptrend overall and has been supported by the 50-day eMA, and yesterday closed above its 20-day eMA and at the top trendline resistance of a potential triangle. The pattern projects a target just below 87.00.

Interestingly, its recent pullback respected the 50% Marabuzo line (50% of open to close on 26th March) by failing to close beneath it on several occasions. We suspect momentum has now realigned with its longer-term bullish trend.

  • A break above yesterday’s high confirms the breakout of the triangle.
  • The bias remains bullish above yesterday’s low. If a strong breakout is to be assumed then traders could use the 50% retracement of yesterday’s ranger to aid with risk management.
  • The initial target is the March high, follows by the triangle target just below 87.00.

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Commodities: Oil prices rally on higher demand forecasts

The International Energy Agency (IEA) said fundamentals for oil “look decidedly stronger”, that vaccine rollouts have improved the outlook for oil demand and oil inventories built up during last year are depleting. Furthermore, crude inventories fell nearly 6 million barrels last week which shows there is some hard data coming through to support the outlook.

Oil prices finally broke out of range with WTI future (+4.3%) closing above 62.27 resistance and brent futures (+4.1%) closing above 65.50 resistance. In a weaker dollar environment with supporting fundamentals, it appears increasingly likely that prices have reverted to their bullish trends.

Gold and silver failed to take advantage of the weaker dollar. XAG/USD needs to break above 25.50 before we can assume bullish continuation on the daily chart, whilst gold remains stuck below several key levels of resistance between 1750 – 1765.


Up Next (Times in AEST)


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