ASX 200
Asian markets trading mixed ending a rough week as the coronavirus cases rise in many states in U.S. threatening the fast recovery that many analysts expect. I don’t expect that any government will shut down the economy again even if there is a second wave of coronavirus infections. The new approach will be local restrictions as in some cities in Germany and Beijing. Texas paused the reopening procedure after coronavirus infections surged.
Wall Street with a late-day rally, ended higher overnight, after better than expected Durable Goods data. The Durable Goods Orders came in at 15.8%, beating the estimates of 10.9% in May. The Jobless claims totalled 1.48 million the previous week as unemployment remains high amid the coronavirus lockdown. The forecasts were for 1.35 million jobless claims. The claims remained above 1 million for the 14th straight week. The third reading for the first quarter GDP came at -5% in line with expectations.
The Fed’s stress tests announced after the close that all major banks remain well-capitalized. Banks finished higher after U.S. financial regulators ease the rules that restrict banks investing in hedge funds or private equity funds.
On the trade war front, U.S. voted legislation that would impose sanctions on people or companies that back efforts by Beijing to restrict Hong Kong’s autonomy.
In Japan, the Tokyo Consumer Price Index came in at 0.3%, below the forecasts of 0.6% in June. The CPI excluding Food and Energy came in at 0.4% in line with estimates.
Nikkei ended 1.18% higher at 22,521. The Singapore Straits Times index is 0.90% higher at 2,614. Hang Seng is 0.77% lower at 24,590. In Australia, the ASX 200 rebounds today and is 1.45% higher at 5,902.
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ASX 200 managed to rebound after the index yesterday tested the 100-day moving average and managed to bounce strongly today. ASX 200 is still down for the week as the pressure from coronavirus new infections persisted throughout the week. The short term positive momentum is intact as the index trades above the 100-day moving average.
On the technical side, first resistance for ASX stands at 5,913 the daily top. Next hurdle will be met at 5,967 the high from yesterday’s trading session. If the ASX 200 index breaks higher, then the next supply zone stands at 6,153 the high from June 11.
On the other side, the initial support for the ASX index will be met at 5,817 the daily low. The 100-day moving average will provide the next support at 5,797. In case of a break lower than 5,797, sellers might test the next support area at 5,717 the low from June 16 trading session.