Asia Closing – Currencies and Equities heading lower. Potential Breakout in USD/JPY

Hang Seng Futures M15

Prices gapped lower this morning as S&P500 suffered the worst day since June. However market was kept within 100 points, and more importantly ended slightly higher that the opening price. This does suggest that bearish sentiments are still nicely contained.

Nikkei225 Futures H1

A strong downtrend is forming with prices breaking Yesterday’s Low (and Monday’s bottom) with ease. Price could potentially bounce up after touching the downward trendline. Any rally kept below 8,994 – 9,000 will keep bearish bias intact.

AUD/USD H1

Looks similar to Nikkei Futures. Watch out for any potential bullish rebound towards Yesterday’s Low. Any failed rally will reinforce bearishness in Aussie.

NZD/USD H1

Kiwi now in a precarious position for bulls. If price drop break below L4 may signal renewed selling pressure heading into 0.813 (L5). If we see Kiwi price closing above 0.82 after US trading, we could see short-term bulls taking over. Bulls will still need to be careful even when price rally above 0.82 due to Global risk-off sentiment which could still pull down Kiwi down despite what the technicals say.

USD/JPY H1

Perhaps the most bearish amongst the charts we’ve discussed above. USD/JPY is on the verge of a bearish breakout. The timing of the breakout adds more possibility for downward follow-through as it is happening just when the Europe Session is opening – e.g. influx of volume at the start of the trading day supporting this breakout/bearish move. Similar to Nikkei 225 and AUD/USD, look out for any short-term bullish reversal after the breakout (potentially happening around L5: 77.5) Breakout will be confirmed should price bounce back but is unable to move back above Yesterday’s High.

Bottomline:

Equities and Currencies moving lower due to Spanish woes. US market which has seen its worst day in 3 months could potentially push prices lower yet again.

 

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