CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Please ensure you fully understand the risks involved.

Asia morning update

Major US indices attempt to recover last week’s losses, as broad-based strength across all 11 sectors marks a stark reversal from earlier weakness.

The flattening of the yield curve seen last week seems to be taking a pause yesterday, with a fall in short-term rates and rise in longer-term yields overnight. This is accompanied with comments from Fed member John Williams, who seems to take on a more dovish stance and give the green light for the rally later in the day.

The S&P 500 seems to be trading within an ascending channel since November last year and overnight movement saw a rebound from its lower trendline as the index attempts to overcome last week’s downside action. This also marks a re-test of the Fibonacci extension 161.8% level at 4,134, which has supported prices on previous two occasions. One may potentially choose to trade within the ascending channel pattern until a break of either the upper or lower trendline occurs.

Ahead today, one may look towards the Eurozone consumer confidence flash and the US existing home sales in terms of economic indicators. The key highlight will be Fed Chair Jerome Powell’s testimony, with his previous comments in the FOMC meeting causing a spike in bond yields. That said, markets have been adjusting their expectations over the past few days of having reduced policy support ahead. His latest remarks ahead of his testimony also seem to take on a dovish stance by reiterating inflation being ‘transitory’, with one to watch if it is able to ease investors’ concerns ahead.

Asia Open

Asia stocks are set to track the rebound in major US indices overnight, with Nikkei +2.41%, ASX +1.37% and KOSPI +0.64% at the time of writing. This comes with a pause in the flattening of the yield curve, supporting sentiments back to reopening and cyclical sectors.

The Japan 225 index has formed a bullish hammer candlestick, with one to watch for a close above the candlestick for a validation. That said, the index will have to overcome several key resistance levels ahead, with the near-term immediate resistance being the 100-day MA. The 29,200 level will also be one to watch, with resistance expected from the downward trendline, formed from a series of lower highs since February. Support level may be at the 27,700 region.

On the watchlist: EUR/USD stabilises at support level

The EUR/USD is attempting to recover earlier losses after plunging to its two-month low on a stronger US dollar. The downside pressure in the currency pair over the past week may be due to a divergence in policy stances between the Fed and the ECB, where a hawkish tilt in the Fed meeting last week marks a stark difference compared to ECB’s dovish stance with its avoidance of taper talks at its recent meeting.

That said, the currency pair is attempting to rebound off the 1.185 level. This comes after a series of smaller candlestick bodies suggests that the sell-off is easing, with the RSI reverting from oversold region back to neutral territory. Resistance ahead may be at 1.196 and near-term support may remain at the 1.185 level.

Monday: S&P 500 +1.40%; DJIA +1.76%; Nasdaq +0.79%; DAX +1.00%; FTSE +0.64%

Related articles

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired


See more forex live prices

liveprices.javascriptrequired


See more shares live prices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

liveprices.javascriptrequired


See more indices live prices

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

You might be interested in…

How much does trading cost?

Find out about IG

Plan your trading

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.


IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

This information/research prepared by IGA or IGA Group is intended for general circulation. It does not take into account the specific investment objectives, financial situation or particular needs of any particular person. You should take into account your specific investment objectives, financial situation or particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. In addition to the disclaimer above, the information does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. Any views and opinions expressed may be changed without an update.

Please see important Research Disclaimer.