Asian Session Commentary

Risk correlated assets are depressed on Monday due to Sino-Japanese political instability which compounded traders misery over the weekend when news regarding Franco-Germany disagreement surfaced.

Hang Seng Futures M15

Perhaps the most bullish of all assets during Asian hours. Prices opened more than 200 points lower but recovered quickly. Currently still straddling between H3 and L3 but more importantly prices is sitting at Friday’s close just before market closing. Having a closing price either side could spur a gap up/down tomorrow open but perhaps Global risk on/off sentiment during US trading hours may prove to be more significant.

Nikkei 225 Futures H1

Decline in price is mildly supported by Thursday’s low. Unlike the HSI, NI225 is trading significantly lower than Friday’s close/low and showing a stronger bearish intent than HSI.

AUD/USD M15

Potential channel forming on the 15 minutes chart. If price break higher, expect resistance between 1.043 to 1.044 hampering any bullish attempts. A break below 1.0400 (and also L4) will open up further downside targets.

NZD/USD H1

Kiwi may be trading a range between 0.8215 and 0.830. However downside pressure cannot be ignored especially when AUD/USD prices look heavy.

USD/JPY M15

Friday’s low is acting as a soft support/resistance today. Trading below L3 of 78.07 puts USD/JPY on track to test bottom channel line. Upside pressure may be limited to confluence of top channel and Friday’s low.

XAU/USD M15

A significant drop from Friday’s High, Gold may find significant resistance at Friday’s Low/L3 level around 1,767 should risk related asset makes a comeback during Europe/US session. If not, look at Asia session low for confirmation of continuation of downtrend.

Brent Crude M5

Similar to Gold in chart pattern. Crude prices are firmly below L4 and Friday’s Low. Price tried to make a comeback but failed to sustain pressure to remain above 111.0 levels.

Bottomline:

Asia Markets closing lower on Monday but not really carving out new lows. European markets open showing equities gapping down but prices are recovering, similar to HSI early session. US Futures on the other hand are still trading lower without any sign of recovery. With that in mind, we could see commodities and currencies potentially ranging. Renewed selling may start again once US market comes into play.

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