Charts Marked with anticipated entry setups in YELLOW and ideal setup in GREEN. There will be many possible scenarios shown so it is key to work off major levels and higher lows/lower highs once the price action unfolds. All prices refer to the CFD pricing from the charts below. Opening times (AEST) are 10am SPI/N225, 11:15/30am HSI, 4/5pm DAX and UK100 and 10:30/11:30pm DOW and USTech100.
OVERNIGHT MARKET SNAPSHOT FOR WEDNESDAY 22/06/22
US Indexes were higher from the open after the the long weekend. The DOW opened strong and managed to add to the gains intraday while the SP500 and Nasdaq were largely rangebound after the open. US Bond yields were relatively contained with short term yields edging higher. The USD eased off resistance levels but is not showing clear signs of weakness and inflation fears continue to provide a bid into the currency along with selling into the YEN which in turn is supporting the USD. Japanese Bonds are a real concern as the YEN pressures lower and pressures the BOJs resolve on ultra-loose monetary policy (as major economies raise rates while Japan holds steady). The market is testing the BOJ and the bond market is reflecting concerns through the YEN. Japan is a major importer (Oil namely) and the weak YEN is hurting the already fragile economy so some expect government intervention to try to support the YEN as inflation remains high. Japan is caught with low economic growth, rising inflation and massive costs of debt so raising rates could be economically disastrous while not raising could be much the same as it will hurt the manufacturing industry through higher costs. There are concerns that if Japan defaults (with such a massive debt) being a large holder of USD, this will flow onto the global economy. Read more about Japan debt and YEN here. UK CPI at 4pm AEST and Canada CPI at 10:30pm AEST. Fed Chair Powell testifies at 11:30pm AEST.
The ASX200 is expected to open UP 45 points after the SPI200 added to the days session gains and ran up into resistance.
SPI200 (Sep) overnight futures up 48 pts to 6463
SP500 up 89.95 pts to 3764.79
NASDAQ Composite up 270.95 pts to 11069.30
Dow Jones up 641.47 pts to 30530.25
FTSE100 up 30.24 pts to 7152.05
DAX30 up 26.80 pts to 13292.40
GOLD futures US session (Aug) down $1.80 to $1838.80 an ounce
COPPER futures US session (Comex Jul) up $0.0185 to $4.0245 a pound
OIL futures US Session (Nymex Jul) up $1.09 to $110.65 a barrel
CRB Index down 0.07 pts to 309.00
AUDUSD trading at 0.6970
EURUSD trading at 1.0535
GBPUSD trading at 1.2280
USDJPY trading at 136.6700
USD Index US Session (ICE Sep) down 0.308 to 104.180
The SPI200/ASX200 added to the day sessions gains and extended into potential resistance around 6465 on the SPI200. I expect to see a rather choppy open as traders from the previous session may be happy to lock in some gains into 6465. The anchor for the move up is at 6444 which will need to hold for another push higher. Expecting a flush up through 6465 to trap some buyers and then a grind lower. It comes down to whether traders expect a bounce into the US. (Refer the the members area for updated ASX200 charts). The DOW grinded its way higher from the start of the Asian session yesterday. Price is holding minor higher lows which could continue the push higher and into 31000. Price is getting extended so will be watching for a flush lower to clear out some buyers. The US Tech 100 extended higher at the start of the US session but then faded off the opening highs into the US close. Expecting to see at least a flush into 11660 so watching for a higher low to hold. Hang Seng initially flushed lower on the open yesterday before moving up into the resistance zone around 21540. Price action was happy to go sideways during European and US trade so we may see a squeeze on buyers from the open. The underlying Index is bullish but into a potential resistance area so we may see the same as yesterday on the CFD…squeeze lower then run higher. The Nikkei was a grind higher all session through Asian trade which flowed over into overnight markets. Price is being held up around 26335 and bulls look tentative considering the issues highlighted above with economy and YEN. Still, we may see an extension higher into 26770 before some later failure. The DAX Index was all one way action lower not long after the European open. Price popped higher and then squeezed back down into 13245. The action shows that bulls are not too committed but we still may see a rally into Europe open if 13245 can hold. UK 100 Index was much the same as the DAX…showing lack of follow through from bulls. Price is being held up around 7105 and wanting to hold above 7140. Expecting the 7105 level to come under pressure as recent buyers are squeezed…but this will of course depend on the US.
Cryptos edged higher through Asian and European trade before falling in the US session to end roughly back where they started the day. There remains major concerns into crypto which is keeping buyers out of the action this time around. Bitcoin bulls continue to speak of higher levels (saying major corrections are all part of crypto trading) but major cracks have been highlighted in my opinion and the recent move lower has killed traders through margin squeezes. Watching to see if Ethereum holds below 1152 and Bitcoin below 21000 for a move down.
Spot Gold initially kicked higher but then grinded back down below 1835. The move down off 1852 is being held at 1842 so as long as this level holds then I expect the pressure from sellers to remain. If the USD has a push lower then watching for a squeeze on sellers and spike higher. Crude Oil pushed up into the 111.75 area before failing from the start of the US session. Price is now set to hold a lower high which could lead to a move back down below 108.78. USD Index initially flushed lower into the start of European trade before ramping back up ahead of Powells testimony tonight. Price action looks set to test higher but ultimately this will depend on what Powell has to say.
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US Tech 100 Index
Hang Seng Index