Risk off end to the quarter, stocks down while the Aussie dollar and Iron ore crash

Quick Recap

An interesting close to the quarter with stocks down but forex traders hammering the the Aussie dollar. Iron ore came under heavy selling pressure again in the past 24 hours. Sure the US dollar was stronger but it is the Aussie that is really under pressure. Indeed, it is offering no compelling reason at all to buy it.

So with expectations that the RBA will cut next week only a reversal of the US dollar – which may happen – will turn the Aussie at the moment.

Elsewhere the Euro held up at support even though Greece is still smoldering in the background while the Pound, Loonie (Canadian dollar) and others have come back a littel but remained pressured. The question now is whether the US dollar is going to suge again or whether this is/was a retest of support.

Time will tell.

On stocks overnight it was a sea of red with weakness everywhere. I thought there might have been a bit more upward pressure to end the quarter. But its seems after one of the strongest quarters in many years, across so many stock markets, that traders booked profits.

One thing to watch in the week ahead is the 2,039 level on the S&P 500. If the swoon heads there, whether it holds or breaks will be very instructive for the next month or so of trade.

On commodities Nymex crude has broken lower again, gold held in and might offer a good trade from the long side with a stop below $1170.

remember things might get illiquid over the next 2 days so be careful.

On the day

On the data front this morning we get the release of the AiGroup PMI before building approvals at 11.30 AEDT and then a raft of HSBC and Market PMI’s around the globe. The ISM is out in the US tonight as well.

And here’s the overnight Scoreboard (8.45 am AEDT):
Here’s the overnight scoreboard:

• Dow Jones down 1.11% to 17,776
• Nasdaq down 0.94% to 4,900
• S&P down 0.88% to 2,067
• London (FTSE 100) down 1.72% to 6,773 (oil companies weighed)
• Frankfurt (DAX) down 0.99% 11,966
• Paris (CAC) down 0.98% to 5,033
• Tokyo (Nikkei) down 1.05% to 19,206
• Shanghai (composite) down 0.99% to 3,749
• Hong Kong (Hang Seng) up 0.18% to 24,900
• ASX Futures (SPI June) down 32 to 5,852
• AUDUSD: 0.7611
• EURUSD: 1.0740
• USDJPY: 120.05
• GBPUSD: 1.4824
• USDCAD: 1.2675
• Crude: $47.49
• Gold: $1,183

CHART OF THE DAY:

Gold, 4 hour:  – $1,172.80 is the last level of decent Fibonacci resistance.

If it holds then we are looking at another move higher.

Yesterday I said “EURUSD, 4 hour:  – Level to watch 1.0793/98. If it breaks there’s 30 points in it and then 1.0604 offers support.” I meant 1.0704, apologies for that typo, and 1.0709 was the overnight low. Watch 1.0675/85 as the key level now.