Market Overview

Asia Closing: China PMI Slowing Selling Momentum.

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USD/JPY H1

http://forexblog.oanda.com/mserve/USDJPY_241012.PNG

Price was unable to push above 80.0 which is a historically significant level. Yen retesting Yesterday's low which is between L3/L4 support zone. With increasing risk aversion, should market become skeptical of BOJ's easing plans, we could see a strong return in bearish momentum.

AUD/USD H1

http://forexblog.oanda.com/mserve/AUDUSD_241012.PNG

AUD/USD rallied today due to higher than expected CPI and strong Chinese PMI. Currently trading above 1.03 but under 1.032, which is the top range of resistance band H3/H4  and in between consolidation range found from 19- 22nd Oct.

H3 could yet provide support for today as price trades back into the 19-22nd Oct range.

NZD/USD H1

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Price trades back into downward channel with H3 acting as intraday resistance. A bullish breakout could also occur tonight should FOMC decision favors risk-appetite, bringing price back above to 0.815-0.82 trading range. Conversely, Channel Bottom may act as support against bearish FOMC outcome, or any further deterioration in US Corporate earnings.

Nikkei 225 Futures H1

http://forexblog.oanda.com/mserve/N225_241012.PNG

Price appears to be oscillating in between 8,850 to 9,100. Doji candle formed around H4/ range bottom of 22nd October suggesting strong resistance levels. Price currently straddling around H3 level, with yesterday's Low and L3 (around 19th Oct low) acting as intraday support.

Hang Seng Index Futures Daily

http://forexblog.oanda.com/mserve/HSI_241012.PNG

Despite recent risk-off sentiment in the US, Hang Seng Index continue to climb, resulting in the strengthening of HKD which HKMA is trying to fight off. The benchmark index is currently trading close to 2012 highs. From here on, Price could break higher, potentially increasing bullish momentum. Conversely 2012 high may prove too strong as a resistance and we could see price falling significantly if FOMC decision exacerbate risk aversion instead of fueling risk appetite. Regardless, the likelihood for Hang Seng Index to gap remains high if we observe recent opening levels. Keep a keen eye on how price react after gapping as that will give us an indication of how bullish/bearish the market is.

Bottomline:

Better than expected Chinese PMI helped supported equities and currencies, but price actions looked primed for strong movements with FOMC acting as catalyst.

 

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