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Dow Jones Sinks to Begin off the Week, Will the Nikkei 225 and ASX 200 Comply with?


Dow Jones, Nikkei 225, ASX 200, Fed – Asia Pacific Indices Briefing

  • Dow Jones, S&P 500 and Nasdaq 100 drop to begin off the brand new week
  • Markets could also be nervous forward of the Federal Reserve fee determination
  • The Nikkei 225 & ASX 200 may very well be a disappointing Tuesday

Monday’s Wall Road Buying and selling Session Recap

Sentiment deteriorated to begin off the brand new week on Wall Road. Futures monitoring the Dow Jones, S&P 500 and Nasdaq 100 declined 0.93%, 0.94% and 1.53% respectively. Whereas the VIX market ‘concern gauge’ climbed by 8.61%, the index stays in a near-term downtrend since earlier this month. Right this moment’s threat aversion may very well be the market’s pricing in a busy week earlier than information winds down forward of the New Yr.

4 central banks from developed economies will probably be releasing their year-end financial coverage bulletins. There’ll possible be a selected concentrate on the Federal Reserve on Wednesday after headline inflation rocketed to a close to 40-year high at the end of last week. This may very well be resulting in markets anticipating a extra hawkish Fed in 2022.

One final result that’s gaining consideration is an opportunity that the central financial institution might pace up tapering asset purchases because it winds down post-Covid quantitative easing. Currently, intervals of steadiness sheet progress slowdown have been related to disappointing returns on Wall Street. With the S&P 500 nonetheless round an all-time excessive, merchants could also be reluctant to decide to a route earlier than key occasion dangers go.

Dow Jones Technical Evaluation

Dow Jones futures left behind a Bearish Engulfing candlestick pattern on the every day chart beneath. Whereas this could be a signal of a reversal coming, affirmation is essential to see if there may very well be follow-through. Fast help appears to be the 35547 inflection level. Under that’s the 200-day Easy Shifting Common, which might reinstate the broader uptrend. Key resistance appears to be the all-time excessive at 36446.

Dow Jones Day by day Chart

Dow Jones Sinks to Start off the Week, Will the Nikkei 225 and ASX 200 Follow?

Chart Created in TradingView

Tuesday’s Asia Pacific Buying and selling Session

Following the somewhat disappointing session on Wall Road, Asia-Pacific markets may very well be an analogous destiny on Tuesday. The financial docket is pretty gentle. Australian enterprise confidence and Japanese industrial manufacturing are due for the ASX 200 and Nikkei 225 respectively. These could do little to affect respective financial coverage expectations, putting the main target for equities on broader market temper.

Nikkei 225 Technical Evaluation

Japan’s Nikkei 225 stays in a consolidative state, struggling to search out materials route for the reason that starting of this yr. The index is ranging between a zone of help (26860 – 27580) and a variety of resistance (30725 – 30345). Just lately, costs have been struggling to push above the 23.6% Fibonacci extension at 28710. Its rejection might pave the way in which for a retest of the help zone.

Nikkei 225 – Day by day Chart

Dow Jones Sinks to Start off the Week, Will the Nikkei 225 and ASX 200 Follow?

Chart Created in TradingView

ASX 200 Technical Evaluation

The ASX 200 additionally stays in a reasonably congestive state, with costs buying and selling round ranges seen again in late Could. A bearish Head and Shoulders chart formation nonetheless stays in play. Costs lately rejected the proper shoulder, the place resistance sits round 7480. This might result in a retest of the neckline, which appears to be a variety between 7096 – 7207.

ASX 200 – Day by day Chart

Dow Jones Sinks to Start off the Week, Will the Nikkei 225 and ASX 200 Follow?

Chart Created in TradingView

— Written by Daniel Dubrovsky, Strategist for DailyFX.com

To contact Daniel, use the feedback part beneath or @ddubrovskyFX on Twitter





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