Aussie Surges on Risk-On Sentiments, Euro Heading Lower

Market overviews

Australian Dollar rides on solid risk-on sentiment and rallies broadly today. US futures point to higher open while S&P 500 would extend record run. Swiss Franc is surprisingly firm too but it’s helped by selloff against Euro, together with Sterling. Dollar is currently the worst performing, together with Canadian and Yen while Euro is not too far away.

Technically, we’ll keep an eye on EUR/CHF as it’s about time for consolidation from 1.0365 to finish. Break of 1.0365 will resume larger down trend from 1.1149 to 161.8% projection of 1.1149 to 1.0694 from 1.0936 at 1.0200 next. Such development could sign more downside in Euro elsewhere.

In Europe, at the time of writing, DAX is up 0.79%. CAC is up 0.54%. UK is on holiday. Earlier in Asia, Nikkei rose 1.37%. Hong Kong HSI rose 0.24%. China Shanghai SSE rose 0.39%. Singapore Strait Times rose 0.78%. Japan 10-year JGB yield rose 0.0002 to 0.064.

Bitcoin could be heading back to 45560 support

We’re viewing Bitcoin’s price actions from 41908 spike low as a corrective pattern. Even in case of another rise, strong resistance should be see from 53299 support turned resistance to limit upside. Indeed, break of 45560 support will argue that fall from 68986 is resuming through 41908.

Today’s fall has pushed Bitcoin back below 50k handle and 4 hour 55 EMA. We’ll now monitor if there is more downside acceleration to push it through 45560 to trigger the above bearish case.

WTI oil extending rally, eyeing 77.2 projection level

Oil prices follow broad based risk-on sentiments and jumped higher this week. Investors seem to be getting Omicron worries behind, as the health impacts of infection look much milder than feared.

With the strong break of 55 day EMA, WTI’s pull back from 85.92 has likely completed at 62.90 already. Immediate focus is now on 100% projection of 62.90 to 73.66 from 66.46 at 77.22. Firm break there could bring upside acceleration to 161.8% projection at 83.86.

For now, we’re viewing the pattern from 85.92 has a sideway corrective pattern, with range set between 61.90 and 85.92. Hence, we’d not expecting a break of 85.92 any time soon. Instead, there should at least be one more falling leg to complete the pattern. Let’s see.

Japan industrial production surged record 7.2% mom in Nov

Japan industrial production rose 7.2% mom in November, well above expectation of 4.8% mom. That’s the biggest gain on record, going to back to as early as 1978. Comparing to the same month of 2020, industrial production was up 5.4% yoy.

Based on a poll of manufacturers, the Ministry of Economy, Trade and Industry expects output to advance 1.6% in December and climb 5.0% in January.

Also released, unemployment rate edged up to 2.8% in November, from October’s 2.7%.

AUD/USD Mid-Day Report

Daily Pivots: (S1) 0.7216; (P) 0.7231; (R1) 0.7255; More…

AUD/USD’s rise from 0.6992 continues today and edges higher to 0.7263. Intraday bias stays on the upside. Sustained trading above 55 day EMA (now at 0.7236) will argue that fall from 0.8006 has completed at 0.6992, after defending 0.6991 support. Further rally would be seen to 0.7555 resistance for confirmation. On the downside, below 0.7205 minor support will mix up the near term outlook and turn intraday bias neutral first.

In the bigger picture, strong rebound from 0.6991 key structural support will retain medium term bullishness. That is, whole up trend from 0.5506 is still in progress. Firm break of 0.7555 resistance will target 0.8006 high and above. However, sustained break of 0.6991 will argue that the whole up trend from 0.5506 might be finished at 0.8006, after rejection by 0.8135 long term resistance. Deeper decline would then be seen back to 61.8% retracement of 0.5506 to 0.8006 at 0.6461.

Economic Indicators Update

GMT Ccy Events Actual Forecast Previous Revised
23:30 JPY Unemployment Rate Nov 2.80% 2.70% 2.70%
23:50 JPY Industrial Production M/M Nov P 7.20% 4.80% 1.80%
14:00 USD S&P/CS Composite-20 HPI Y/Y Oct 18.40% 18.50% 19.10%
14:00 USD Housing Price Index M/M Oct 1.10% 0.90% 0.90%