Asia Closing: Monday blues as Bears claim first blood in Q4 Asia Session. Europe gives Bull fighting chance.

Initial reaction on Monday morning wasn’t great for Bulls with China’s data, Spanish Stress Test and Tankan Survey weighing down on prices/sentiment. However, bears did not make the most of the negativity to push prices lower significantly, with most if trading within Friday’s range.

USD/JPY H1

USD/JPY traded slightly lower but was not able to push below 77.8, which is the swing low on Friday and the top of 26th September. This put 78.1 into focus as bulls will want to see prices hitting there and beyond, changing the bearish climate and potentially create a new uptrend with “Higher Highs, Higher Lows”.

AUD/USD H1

Aussie declined but was not able to push beyond 26th Sep low. Prices could potentially reach H3 of 1.0400 especially if AUD/USD remain above Friday’s low for an extended period of time.

NZD/USD H1

Kiwi has bounced up from Friday’s low and today’s L3, sending Kiwi heading towards H3 and consolidation zone found on 27th Sep (7am – 6pm). There could be significant resistance found there especially due to the fact that Kiwi tend not to trend well without strong fundamental news movement.

Nikkei225 Futures H1

Prices has recovered and looking to break above 8,900, which will bring H3 (8,965) as a potential topside target. This does not necessary mean that Nikkei 225 is on a full uptrend as price is still within a Lower Highs Lower Low action unless price carve a new top above Friday’s High, which is highly unlikely without any strong news driver.

Bottomline:

As mentioned in our Europe Open commentary, sentiment could be shifting to a more bullish one which can potentially bring all the above mentioned assets higher. However, that would be a slow and measured move rather than a sharp rally as we are not scheduled to have any important news announcement for today and tomorrow. Nonetheless, watch out for any sudden announcement from Europe/ECB regarding Spanish/Greece Bailout that can change the sentiment landscape dramatically in a heartbeat.

*Note: Bank Holiday in Hong Kong and China, hence no price movement for HSI Futures, but expect HSI to gap upward/downward accordingly based on US market direction today. European gains are mostly attributed to bank stocks, hence expect HSI (which feature banks heavily) to potentially show the same tomorrow.

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