Trading volumes to restore, next RBA
- Australian ASX 200 futures fell -36 points (-0.502%), the spot market is currently valued at 7125.6
- Japanese Nikkei 225 futures are down -40 points (-0.14%), the spot market is currently valued at 28,820.08
- Hong Kong Hang Seng futures are down 0 points (0%), spot market is currently valued at 29,151.8
European Friday closing:
- The UK’s FTSE 100 index rose 2.94 points (0.04%) to close at 7,022.61
- The European Euro STOXX 50 index fell -31.1 points (-0.76%) to close at 4,039.46
- Germany’s DAX index fell -98.85 points (-0.64%) to close at 15,421.13
- The French CAC 40 index fell by -36.94 points (-0.57%) to close at 6,447.17
- The S&P 500 E-minis index is down -11.25 points (-0.27%)
- The Nasdaq 100 E-minis index is down -31.75 points (-0.23%)
- The Dow Jones E-minis index is down -81 points (-0.23%)
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Low close for Europe, US futures contracts currently down
European stocks fell in a low volume session, the STOXX 600 euro index fell -0.5% while the DAX and CAC closed down -0.6%. Deutsche Bank (DBKG) was one of the worst performers, slipping -1.3% after the Wall Street Journal reported that the bank was told by the Federal Reserve that it is still not addressing persistent defaults of its anti-money laundering controls.
Futures markets point to a lower open with S&P 500 E-mini futures currently down -0.27% and below 4200 to a two-day low. The ASX 200 hit a new high yesterday in early trading, to reverse its course as higher cases in Victoria state weighed on sentiment. All eyes will be on the number of cases today as it looks increasingly likely the greater Melbourne area will see its seven-day lockdown extended. The main support levels that bulls need to defend today are the 7138 and 7082.
Internal data of the ASX 200 market:
ASX 200: 7161.6 (-0.25%), May 31, 2021
- Healthcare (0.47%) was the strongest sector and energy (-1.59%) was the weakest
- 5 of 11 sectors outperformed the index
- 8 of the 11 closed areas below
- 85 (42.50%) stocks increased, 103 (51.50%) stocks decreased
- 12 hit a new 52 week high, 1 hit a new 52 week low
- 69% of stocks closed above their 200-day average
- 67.5% of stocks closed above their 20 day average
- + 4.27% – Resolute Mining Ltd (RSG.AX)
- + 3.57% – Perseus Mining Ltd (PRU.AX)
- + 3.52% – Inghams Group Ltd (ING.AX)
- -17.8% – Nuix Ltd (NXL.AX)
- -6.79% – Link Administration Holdings Ltd (LNK.AX)
- -5.04% – Austal Ltd (ASB.AX)
Forex: AUD pairs remain stable ahead of RBA meeting
The ranges were understandably limited overnight with the UK and US on public holidays, and most of the action was seen on commodity crosses and yen pairs. The US Dollar Index (DXY) fell to a three-day low after breaking its two bearish hammers on the daily chart. As mentioned in yesterday’s video, range trading strategies are preferred while prices remain between 89.50 and 90.40.
AUD / NZD is in a corrective phase after the breakout bearish last week. Two lower peaks have formed to show demand around 1.0600 so its correction may not yet be complete.
Considering the strength of the bearish momentum overall and the fact that we have hawkish RBNZ versus accommodating RBA, we favor more downside on this crossover. However, keep in mind that the RBA is holding its monetary policy meeting today, which leaves potential for volatility – unless the consensus of “ no change ” is correct, in which case the AUD. / NZD has the potential to decline further.
And given the backdrop to this meeting, we would prefer to blend into some bullish peaks below the resistance levels around the 1.0700 handle (50% retracement, 1.0692 low and 1.0714 low. )
AUD / CAD Is considering a break below 0.9300, although yesterday’s inverted hammer shows the bulls trying to lift it from its lows. If we can see (say) an hourly close below 0.9300, it could open a run for the October low at 0.9248.
AUD / CHF is stuck in a sideways consolidation although its daily trend is generally downward. The 20 day eMA ends as resistance and the 200 day eMA is held just on February 11e low at 0.6868. We just need to see a break below 0.6925 to focus on the 200 day eMA for bears.
EUR / AUD has yet to break through last week’s high, but prices are holding above the 1.5724 support, where a three-day uptrend has formed known as the Morning Star Reversal. A break above 1.5832 highlights the resistance area of 1.5900 / 47.
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Commodities: metals remain high (but lack the conviction to continue rising)
Copper futures hold around last week’s highs and the support suggested by Friday’s candle was found at the breakout level of 4.58. We now wait for prices to break through last week’s high and continue in the direction of its established uptrend on the daily chart.
Gold prices remain high above 1900 and just below last week’s high. A bullish hammer on Friday confirmed support at 1880, although our bias remains bullish above the 1872.80 low. Silver is attempting to close above 28.0 but its supposed break above that key level currently lacks the conviction we were hoping for. Nonetheless, our bias remains bullish in its bullish channel and we would shift to a bearish bias if prices fell below 27.20. In the case of metals in general, DXY needs to get closer to the lows of its two week range to help those metals come back up.
Next (times in AEST)
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