Asia Closing: 22,000 frontier for HSI

USD/JPY H1

Rally in Asian equities help to weaken JPY as safe haven flow exits into riskier assets. However, price was unable to touch H4 and previous peak on 25th Oct. Support could potentially be found around Yesterday’s High of 80.20, with a break pushing price to the next level of support at L3, which is around the peak found on 30th Oct, the sell off on 29th Oct (pre BOJ announcement levels), and the bottom on 24th Oct.

AUD/USD H1

Facing resistance around Yesterday’s High to H3 level, with price falling back hard after hitting the level. We could potentially see price supported between L3/L4 level, which is just around the ceiling found between 24th Oct all the way till 31st Oct. Failure to hold onto current levels open up the 24th – 31st Oct range back into focus, with interim support from Yesterday’s Low around 1.035.

NZD/USD H1

Kiwi potentially forming a new consolidation area between 0.826 to 0.828. Alternatively, one could view the price action for the past few hours as a sign that price is breaking below 0.8265 support/resistance from early Oct.

Support could be found via L3 but a stronger support would be L4 which coincides with the ceiling from 29th Oct – 31st Oct.

Hang Seng Index Futures M15

Price has successfully breached the 22,000 level, with price staying above 22,000 comfortably. That is not to say that price will simply rally higher all the way, with a push back to 22,000 a possibility depending on how US employment data works out. How price maintain 22,000, and also the previous swing high around 21,850 will be critical in determining the trend for November.

Nikkei 225 Futures H1

Similar to HSI futures, price has broken from the previous swing high (pre BOJ announcement). A new consolidation area could be forming from 9,050 to 9,100, with break on either side facing H3/L3 as support/resistance.

Bottomline:

Despite equities looking stronger, with USD/JPY agreeing, Oceania currencies especially AUD/USD are not enjoying the same bullishness. This could be due to the upcoming RBA rates decision next week. Though expectations are for RBA to hold rates, traders might not be fully convinced considering RBA’s propensity to surprise. Furthermore, we have Econ Min Swan saying Australia can afford to have lower cash rates due to AUD strength just today. However, risk appetite remain unsatiated, and could eventually push AUD/USD higher should the pressure sustain throughout next week, especially should RBA decision favor AUD to the upside. 

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