Asian Open: US dollar rises for a sixth day, potential bull flag on GBP/AUD
Thursday US cash market close:
- The Dow Jones Industrial rose 87.06 points (0.25%) to close at 34,583.57
- The S&P 500 index rose 19.06 points (2.51%) to close at 34,058.75
- The Nasdaq 100 index rose 32.925 points (0.23%) to close at 14,531.81
Asian futures:
- Australia's ASX 200 futures are down 0 points (-0.64%), the cash market is currently estimated to open at 7,442.80
- Japan's Nikkei 225 futures are up 130 points (0.48%), the cash market is currently estimated to open at 27,018.57
- Hong Kong's Hang Seng futures are down -62 points (-0.28%), the cash market is currently estimated to open at 21,746.98
- China's A50 Index futures are up 5 points (0.04%), the cash market is currently estimated to open at 13,856.08
Initial jobless claims in the US fell to a 53-year low of 166 last week, meaning an already tight labour market is getting tighter. Worker shortages help to partly explain the decent print, although it should be factored in that the calculation for seasonality has been altered.
Bullish outside days formed on the Dow Jones and S&P 500, with the latter holding above 4455 support. 54% of the S&P’s stocks advanced, which is not exactly a compelling day for bulls, although 8 of its 11 sectors posted gains led by healthcare and energy.
ASX 200:
The ASX 200 has held up relatively well the past few days and it could be argued a pullback was due, given it rallied into 7500 in a relatively straight line. The daily trend structure is bullish overall and can afford a pullback to 7360 but, given the positive lead from Wall Street, we’re more interested in seeking evidence of a swing low today.
ASX 200: 7442.8 (-0.63%), 07 April 2022
- Consumer Stap (0.55%) was the strongest sector and Info Tech (-3.42%) was the weakest
- 8 out of the 11 sectors closed lower
- 7 out of the 11 sectors outperformed the index
- 130 (65.00%) stocks advanced, 54 (27.00%) stocks declined
Outperformers:
- +11.9% - Magellan Financial Group Ltd (MFG.AX)
- +9.68% - GQG Partners Inc (GQG.AX)
- +4.88% - Zimplats Holdings Ltd (ZIM.AX)
Underperformers:
- -6.67% - Liontown Resources Ltd (LTR.AX)
- -6.55% - WiseTech Global Ltd (WTC.AX)
- -6.36% - Novonix Ltd (NVX.AX)
USD is the strongest currency this week
The US dollar has now rallied for six consecutive days, the euro has fallen for six, the Swiss franc and Japanese yen five. And all because the Fed have hammered home a point we thought was already generally accepted; the Fed will be raising rates aggressively and begin trimming their balance sheet. Looking at the US dollar index, 6 bullish closes are quite rare and we are now headed for 100. So there is the potential for mean reversion, one side of this weekend or the other.
Read our guide on the US Dollar Index (DXY)Potential bull flag on GBP/AUD
WTI reaches target yet key support holds (for now)
WTI reached our lower target of 94.0 yesterday after respecting the upper bounce of our resistance zone near 99.0. Prices have now since recouped around half of yesterday’s losses over the past four hours and, given the significance of support around 94.0, we’re happy to retain a flat view heading into the weekend as prices are now trapped between the key levels of 94 – 99. Should a big event trigger a break of either of those key levels, our bias would switch to the relevant direction. Otherwise, traders could consider range trading strategies (short into resistance, long around support) until that range breaks.
Up Next (Times in AEST)
How to trade with City Index
You can easily trade with City Index by using these four easy steps:
-
Open an account, or log in if you’re already a customer
• Open an account in the UK
• Open an account in Australia
• Open an account in Singapore
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
From time to time, StoneX Financial Pty Ltd (“we”, “our”) website may contain links to other sites and/or resources provided by third parties. These links and/or resources are provided for your information only and we have no control over the contents of those materials, and in no way endorse their content. Any analysis, opinion, commentary or research-based material on our website is for information and educational purposes only and is not, in any circumstances, intended to be an offer, recommendation or solicitation to buy or sell. You should always seek independent advice as to your suitability to speculate in any related markets and your ability to assume the associated risks, if you are at all unsure. No representation or warranty is made, express or implied, that the materials on our website are complete or accurate. We are not under any obligation to update any such material.
As such, we (and/or our associated companies) will not be responsible or liable for any loss or damage incurred by you or any third party arising out of, or in connection with, any use of the information on our website (other than with regards to any duty or liability that we are unable to limit or exclude by law or under the applicable regulatory system) and any such liability is hereby expressly disclaimed.
City Index is a trading name of StoneX Financial Pty Ltd.
The material provided herein is general in nature and does not take into account your objectives, financial situation or needs.
While every care has been taken in preparing this material, we do not provide any representation or warranty (express or implied) with respect to its completeness or accuracy. This is not an invitation or an offer to invest nor is it a recommendation to buy or sell investments.
StoneX recommends you to seek independent financial and legal advice before making any financial investment decision. Trading CFDs and FX on margin carries a higher level of risk, and may not be suitable for all investors. The possibility exists that you could lose more than your initial investment further CFD investors do not own or have any rights to the underlying assets.
It is important you consider our Financial Services Guide and Product Disclosure Statement (PDS) available at www.cityindex.com/en-au/terms-and-policies/, before deciding to acquire or hold our products. As a part of our market risk management, we may take the opposite side of your trade. Our Target Market Determination (TMD) is also available at www.cityindex.com/en-au/terms-and-policies/.
StoneX Financial Pty Ltd, Suite 28.01, 264 George Street, Sydney, NSW 2000 (ACN 141 774 727, AFSL 345646) is the CFD issuer and our products are traded off exchange.
© City Index 2024