Asian Open: ASX 200 rises to YTD high, futures point to positive open

Wednesday US cash market close:

• The Dow Jones Industrial rose 305.28 points (0.86%) to close at 35,768.06
• The S&P 500 index rose 65.64 points (1.46%) to close at 4,587.18
• The Nasdaq 100 index rose 309.934 points (2.1%) to close at 15,056.96

Asian futures:

• Australia's ASX 200 futures are up 41 points (0.57%), the cash market is currently estimated to open at 7,309.30
• Japan's Nikkei 225 futures are up 270 points (0.98%), the cash market is currently estimated to open at 27,849.87
• Hong Kong's Hang Seng futures are up 200 points (0.81%), the cash market is currently estimated to open at 25,029.99
• China's A50 Index futures are up 51 points (0.34%), the cash market is currently estimated to open at 15,193.59

US indices are on track for their third consecutive bullish week as earnings continued to beat estimates. The Nasdaq 100 led the way higher with a 2% gain and closed above its 200-day eMA. The S&P 500 closed above trend resistance and slightly above its 50-day eMA, yet futures markets continue to rise on falling volumes which can be indicative of a retracement / bearish bounce. The FTSE 100 broke to a two-year high after Boris Johnson announced that he intends to end lockdowns at the end of this month.

ASX 200 closed above 7200 for the first day this year

It was another solid close for the ASX 200 yesterday which managed to close above 7200 for the first day this year. It also closed at the high of the day with above-average volume as an added sign of strength, with 9 of its 11 sectors posting gains, led by technology and financial stocks. With futures markets pointing to a higher open then 7300 will be a focal point for traders today. And with the 200-day and 100-day averages sitting around 7325 within a resistance zone between 7300 – 7340, we want to see a close above 7340 to assume trend continuation. Until then, the resistance zone could be pivotal.

ASX 200: 7268.3 (1.14%), 09 February 2022

• Information Technology (4.2%) was the strongest sector and Materials (-0.56%) was the weakest
• 9 out of the 11 sectors closed higher
• 2 out of the 11 sectors closed lower
• 7 out of the 11 sectors outperformed the index
• 30 (15.00%) stocks advanced, 160 (80.00%) stocks declined

Outperformers:

• +-8.91% - Mineral Resources Ltd (MIN.AX)
• +-7.93% - Bapcor Ltd (BAP.AX)
• +-3.6% - Fortescue Metals Group Ltd (FMG.AX)

Underperformers:

• 11.24% - COMPUTERSHARE LIMITED (CPU.AX)
• 7.75% - Dicker Data Ltd (DDR.AX)
• 6.56% - Imugene Ltd (IMU.AX)

Gold rises to a 2-week high on lower volumes.

Gold rose to a two-week high and its rally has erased around ¾ of its fall from 1850. It remains unclear whether it has the strength to break the upside of its multi-month triangle to the upside, and it has been noted that it is rising on falling volumes so we could envisage this rolling over once more. Last week we saw et-long exposure fall at its fastest pace in nearly 3-years.

Palladium formed a small bullish engulfing candle with a higher low relative to Tuesday’s session. Given we’ve now see two small bullish candles with higher low above Monday’s bullish hammer we’re on guard for a bullish breakout above 2306 to assume a swing low has been confirmed.

Inflation in Mexico hits a 20-year high

Rate-hike bets are back on for the Mexican peso after inflation roared to a 20-year high. The Bank of Mexico (Banxico) hold their meeting today, and the peso was the strongest G10 currency yesterday which saw USD/MXN fall to a 12-day low.

The British pound was weaker across the board after Boris Johnsons announcement, and it fell around -0.5% against AUD and NZD which were the strongest currency amidst risk-on trade. UD/JPY reached our $83 upside target but, with trend resistance less than a day’s ATR away, reward to risk potential is undesirable for bulls on the daily chart. AUD/USD rose to a 13-day high and has 0.7200 within easy reach, as it trades just 20 pips below that handle.

Up Next (Times in AEDT)

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