ASX 200 Index: Holding in bullish territory on heels of Wall Street

Risk-on markets have elevated the index, although there is a lack of conviction from a technical standpoint longer term.
ASX falling shirt of a key resistance as bulls struggle at the 38.2% Fib.

Ross J Burland FXStreet

The benchmark S&P/ASX200 has been bid from the word go on Tuesday, soaking up positive data from around the world and riding the rise in the shares of Boeing, which bolstered Wall Street overnight.

The index is currently trading at 5908, higher by 1.61%, having climbed with a range of 5815 and 5925.

US stocks on Monday surged and risk sentiment has been elevated around the start of the week's sessions despite the second wave of COVID-19 taking shape throughout various states of the US and previous of the world.

Boeing shares soared more than 14% higher after a 737 MAX aircraft took off on the first day of certification flight testing, raising hopes of Boeing’s recovery.

The Dow Jones Industrial Average rose 580.25 points, or 2.32%, to 25,595.8 on Monday, the S&P 500 gained 44.19 points, or 1.47%, to 3,053.24 and the Nasdaq Composite added 116.93 points, or 1.2%, to 9,874.15.

Wall Street Close: US stocks shrug off WHO's COVID-19 warnings

US and China's data beating expectations

We have seen both US and China's data beating expectations which gave rise to renewed optimism about a US economic recovery.

US Pending Home Sales came in May spiking by 44.3% and Chinese NBS Manufacturing PMI (Jun) and Non-Manufacturing PMI (Jun) as follows:

China June official manufacturing PMI at 50.9 (Reuters poll 50.4) vs 50.6 in May.
China June official services PMI rises to 54.4 vs may 53.6.
China data dump: Numbers beat expectation, giving risk appetite another lift

As for domestic events, the Reserve Bank of Australia’s (RBA) Deputy Governor Guy Debelle will discuss the RBA’s response to the pandemic this Tuesday.

ASX 200 Index levels

The index has found resistance at a 50% mean reversion of the June downtrend between 6195 and 5270. The index is back to test the 38.2% Fib with MACD below zero and bulls struggling to fully regain control at this juncture.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

EUR/USD remains bid near 1.1650 post-US ADP

Finally some respite for the risk complex see EUR/USD partially recover from the recent steep sell-off, this time hovering around the 1.1650 zone amid decent gains in a context of renewed selling pressure on the US Dollar. However, the duration and extension of this bounce should be put to the test amid the unabated tensions in the Middle East.

GBP/USD meets resistance around 1.3400

In line with its risk-linked peers, GBP/USD stages a modest comeback on Wednesday, although meeting some resistance around the 1.3400 neighbourhood. Cable’s humble recovery comes on the back of the fresh downward bias in the Greenback amid a marginal improvement in the global sentiment and steady geopolitical effervescence.

Gold flirts with $5,200 amid safe haven demand

Gold partially fades Tuesday’s sharp pullback, regaining the $5,200 mark per troy ounce on the back of the resurgence of investors’ demand for the safe-haven space. The precious metal remains well propped up by the deterioration of the geopolitical scenario in the Middle East, while the softer tone in the US Dollar collaborates with the uptick.