Asia Closing: Weak open on Monday threathening bearish breakouts.

USD/JPY H1

Yen strengthened amidst fearful selling in risk correlated assets during Asian session. Friday’s low keep bears in check but a break below could bring L5 into bears’ horizon.

AUD/USD H1

After RBA’s rates cut, AUD/USD went down for most of last week despite a resurgence by risk correlated assets (S&P500, DAX, FTSE 100 and HSI all closed higher W/W). Prices gapped lower on open but we’ve not seen prices trading below opening session. Bulls may take this as a positive sign for a short reprieve upwards, but a break below Today’s L3/Last Friday’s Low will bring out the bears once more, with parity a reasonable target this week.

NZD/USD H1

On the brink of breaking lower? Or perhaps some chartists may already treat this as a confirmed bearish breakout with price trading slightly below last Wed’s and Thurs’ Low and the rally found during early Asian session unable to push prices significantly upwards. However, the line in the sand for conservative traders would be for price to break below Yesterday’s Low and Today’s L3 as a breakout confirmation. If price is able to sustain and perhaps even test H3, we could see NZD/USD trading within 0.818 to 0.825 for a considerable amount of time this week.

Hang Seng Index Futures M15

Price was unable to sustain above 21,000, which opens up the next significant round number 20,000 back into play. After a few days of tight trading ranges, HSI managed to hit H5 and beyond today, showing large bearish momentum which could set the tone for the entire week.

Nikkei 225 Futures H1

A break below Friday’s low will bring Consolidation Zone: 8,780 – 8,850 potentially acting as a support. False breakout may still occur with prices potentially rallying back up to put trading range 8,850 – 8,900 back in focus.

Bottomline:

Risk appetite taking a beating early week, with European Markets following suit before European Finance Ministers meeting later today. Are we looking at the onset of a near bear trend or simply a temporary retracement from last week’s rally? We should be able to find out more when come tomorrow when Asia response once more after US traders make their votes.

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