Charts Marked with anticipated entry setups in YELLOW and ideal setup in GREEN on market opens. 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.
PROCESS IS KEY….DEFINE LEVELS – MARK EXPECTED PRICE ACTION – TRADE THE SETUPS
All prices refer to the CFD pricing from the charts below off TD365.com. Opening times (AEDT) for underlying indexes are SPI200 at 10am, N225 at 11am, HSI at 12:30am, DAX and UK100 at 7pm and DOW and USTech100 at 1:30am .
OVERNIGHT MARKET SNAPSHOT FOR TUESDAY 7/02/23
US Indexes came under pressure from the open following on from weak Asian and European sessions. Bulls were happy to continue to provide support keeping prices up off session lows made early in the day. The FTSE100 took a hit from the open, as expected, moving down off all time highs while the DAX opened weak and held the losses into the close. The USD kept the bullish pressure on and moved up on the back of more safe haven buying as US bonds moved down with yields continuing to rally. Gold managed to fend off more selling but tentatively held support that looks set to break if the USD gains further. Oil and Copper flushed lower at the start of the US session but bounced back up off early lows although they both remain in short term downtrends. I expect that markets will remain in a risk off tone in coming days if the Bond market and USD are correct and higher interest rates for longer will be the bears concerns. Major indexes remain relatively buoyant compared to Bonds and USD but may play catchup soon. All in all, it remains a hard market to navigate so risk management must be a priority.
(All times AEDT) JPY Average Cash Earnings and Household Spending at 10:30am, AUD Trade Balance at 11:30am, USD President Biden Speaks TENTATIVE, AUD RBA Cash Rate and Rate Statement at 2:30pm, EUR German Industrial Production at 6pm, USD Trade Balance at 12:30am and USD Fed Chair Powell Speaks at 4am.
Asian Markets may see a mixed open and then Nikkei to potentially see further weakness, Hang Seng may squeeze out some sellers and ASX200 looking for a kick higher.
The ASX200 is expected to open FLAT after the ASX200 held in a narrow range into the US close.
Prices below as at 9am AEDT
SPI200 (Mar) overnight futures up 1 pts to 7472
SP500 down 25.40 pts to 4111.08
NASDAQ Composite down 119.51 pts to 11887.45
Dow Jones down 34.99 pts to 33891.02
FTSE100 down 65.09 pts to 7836.71
DAX40 down 130.52 pts to 15345.91
GOLD (Spot) up $2.59 to $1867.75 an ounce
COPPER futures US session (Comex Mar) down $0.0195 to $4.0370 a pound
OIL futures US Session (Nymex Mar) up $1.07 to $74.46
CRB Index up 0.02 pts to 266.21
AUDUSD trading at 0.6884
EURUSD trading at 1.0726
GBPUSD trading at 1.2022
USDJPY trading at 132.6500
USD Index US Session (ICE Mar) up 0.738 to 103.493
The ASX200 was largely range bound for most of the US session between 7544 and 7533. If the 7533 level holds on the open, I expect to see a push higher into and through 7554 as price action is looking buoyant. If 7544 holds an opening flush and then fail, I expect that bears may look to extend on the move down off highs and push into 7507 support. (Refer to the Trade The Structure members area for weekly updated ASX200 charts) The DOW tested into and held 33655 in the European session and then rallied into test 33945 highs. If the 33945 level holds, then expecting to see another squeeze lower through 33800 so looking for a lower high. If the 33800 level holds a retest, then I am looking for a press up through 33945 potentially back into the sell zone around 34135. The US Tech 100 held a relatively tight range between 12420 support and 12554. I am looking for a stop hunt through 12420 and then a lower high and push down towards 12180. If the 12420 level holds, then look for a push back up off a higher low to 12554 and above. The Hang Seng flushed the day sessions lows around 21090 and then pushed back above the level into the close. If price holds above 21090 or 21165, then looking for a push higher into 21475. If price is going to move down into new lows, I am looking for an initial spike higher and then a lower high for the break below 21090. The Nikkei held below 27730 into the US close after bouncing off 27540. If price holds below 27730 around the open, then expecting this to be a key lower high for a push lower into 27540 or below. If price can initially move up and hold above 27730, then expecting an extension up into 27825. The DAX initially moved lower from the open below 15353 and then bounced to trade around the same level into the US close. If price moves back below 15353 and holds, then looking for a lower high and push down to 15270 and below. If price can hold a higher low off 15353, then watching for a move up off the zone. The UK100 failed off new all time highs around 7913 and saw a big squeeze lower to clear out some bulls from Friday. Price is mid range for me so would like to see a higher low around current levels for a move up into 7870 or a lower high for a push down into 7808.
Key Cryptos Bitcoin and Ethereum remained under pressure with BTC holding below 23150 and ETH hovering around 1630 which is a key daily zone. If Bitcoin holds below 23150 then I am looking for a lower high and squeeze down to 22550. With Ethereum, price action could easily continue lower if bulls can not hold price back above the 1630 zone.
USD Index continued the rally up off Daily support to add to Fridays gains. Price has pushed up into a potential resistance area around 103.580 where it may find some selling pressure. If price holds above 103.580, then expect continuation up and pressure into gold, other commodities and FX majors. Spot Gold could not lift off 1863 with new buyers remaining reluctant with the move up into the USD. If 1863 can hold then watch for a higher low and short squeeze higher. If price breaks below and holds, then watching for a lower high and another leg down that could see a test into 1821. Crude Oil spiked below 72.88 support to clear out some stops and then we saw a bounce back up into 74.40. This price action suggests 72.88 may be a short term low and buyers are going to squeeze out some shorts. Looking for either a higher low above 72.88 or a push up through 74.40 and then a retest of the level to hold.
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ASX200 Index 5 Min Chart
US Tech 100 Index
Hang Seng Index
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