- The Nasdaq 100 led Wall Street higher ahead of a 3-day weekend in the US. This takes the tech index to a 19-day high and could provide a positive lead for Asian markets today.
- As promised, Europe have begun legal action against the UK for tying to bypass their earlier divorce deal. It was a volatile session for GBP yet only closed -0.2% lower and was the only major market we track to exceed its ATR (average true rage).
- A technical glitch on the Tokyo Stock Exchange forced them to suspend trading all day yesterday, in what is believed to be their worst outage ever. Nikkei futures (which trade on a separate exchange) rose 0.4%.
- Jobless claims in the US fell to 837k, its lowest level since the start of the pandemic.
- Final PMI reads for UK, Europe and US were revised slightly lower, yet they all remain expansive.
- European’s inflation is expected to deflate further at -0.2% versus -0.2% prior. This is not good news for ECB who are “monitoring their exchange rate”, as deflation effectively strengthens their currency.
- Nonfarm payroll is today’s main calendar event, where 850k jobs are expected to be added and unemployment is expected to be reduced to 8.2%. These numbers will become increasingly important to Trump as we head towards next month’s election, as he will want to grandstand any good that comes out of them. Assuming they improve…
Nasdaq 100 (USTEC): Tests a 1-month high
- Bias remains bullish above the 111.83 (doji low). However, bulls could also use yesterday’s low to aid with risk management if confident it will continue to trend higher from here.
- Bulls could wait for a break above 11,600 to assume trend continuation, or see if prices pull back towards 11,183 and consider trading a retracement.
- Please note that it is a 3-day weekend in the US due to Labor day on Monday.
Silver (XAG/USD): Seeking a Break Below 23.12
- A simple update to yesterday’s analysis. The bullish inside day (following the bearish outside day) shows compression is underway, and we are now waiting for volatility to return.
- Bears wait for a break below 23.12 to assume bearish continuation.
- Out bias is bearish below 24.40, although a break above 24.40 could be of interest to the bulls.
USD/JPY: Treading Water Ahead of NFP
- USD/JPY has historically been a go to FX pair for NFP traders, so its worth keeping an eye on to see how it reacts to tonight’s employment report.
- A series of overlapping candles have formed over the past 7-sessions – at some point bulls or bears will take control and treat us to a breakout.
- Note the two bearish hammers at 105.40 support which have respected the bearish trendline. Bears could consider shorts with a break below 105.40.
- If prices break above the trendline, bulls could wait to see if it holds as support and consider for longs next week.
AUD/NZD: Potential Swing Trade
- AUD/NZD trades within a bearish channel, plus a doji and a bearish inside day closed beneath the 20-day eMA whilst respecting the upper channel.
- This suggest a swing high could be in place around 1.0850.
- Bears could consider shorts below 107.86, whilst a break above the channel or 1.0850 high invalidates the bearish bias.
USD/CAD: Prices continued lower towards the 1.3250 target although momentum is beginning to slow. The bullish trendline may act as support, and at current levels the reward to risk is undesirable for new shorts. We prefer to step aside for now and monitor its potential for a swing trade long.
USD/CNH: Prices continued to fall and hit the initial target around the 6.7420 lows. Next bearish target is around 6.6710. Trend remains bearish below the 0.6845 high.
Hang Seng (HK50): Bias remains bearish below 24,132. Bullish momentum needs to subside before we would reconsider shorts.
S&P/ASX 200 (AUS200): Range trading strategies preferred whilst trading within the 5800 – 6200 area. Momentum has begun to subside at the lows so bulls could begin to seek long opportunities above 5,800.