Asia Closing: Highest 2012 close for Hang Seng Index Futures.

USD/JPY H1

Bullish breakout in USD/JPY? Yen has broken above H5, above 80.0, above upward trendline. Despite the slight pullback form the highs, price could still inch upwards “walking” along the upward trendline. There were rumors this morning from Nikkei that BOJ is preparing another 10 Trillion Yen asset purchase, which pushed USD/JPY and Nikkei225 higher. However, if risk aversion continue, safe haven flows may force USD/JPY lower again.

AUD/USD H1

AUD/USD has rallied more than 150 pips from the recent low and we do not have any evidence that momentum is slowing down. Nonetheless we could still see potential resistance around H3/H4 (1.04145)  which coincides with the consolidation range of 1.0365 – 1.0405. Support can be found around L3 and consolidation range between 21st – 22nd Oct.

NZD/USD H1

Riding on the less dovish RBNZ statement, Kiwi broke the previous consolidation zone back in 17th Oct and looks to be breaking above H3 today. 0.8265 which was the low between 30 Sep to 1st Oct and swing top on 4th Oct may act as resistance should price reach this level. Support sighted around Yesterday’s High and 17th Oct consolidation should today’s H3 fails to hold.

Nikkei225 Futures H1

Trading slightly above the  previous swing high of 22nd Oct, Nikkei 225 could rally further seeking the underside of the upward trendline for potential topside target. Equities rallied on the back of the weakening Yen which benefited exporters.

Hang Seng Index Futures Daily

Not much difference from yesterday as Hang Seng Index still trades just around 2012 highs. Confirmation of either a rebound or bullish breakout should be sought around significant strong resistance such as this. HKMA has tried to weaken USD/HKD but its actions have failed to reap any tangible rewards. Should HKD strengthen beyond the peg, we could potentially see an even greater flow of foreign funds into Hong Kong as there is a greater incentive to hold HKD denominated assets due to its increasing strength.

Bottomline:

A strong showing for Asian assets as equities rallied despite all the doom and gloom. AUD/USD continued its rally yesterday as expectations of another rate cut in November diminishes. This belief was furthered by RBNZ choosing to keeps rates the same, while BOC’s Carney saying inflation could be a risk in the future.

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