Nikkei Futures Close Lowest Level 3 Week
Futures Nikkei index fell sharply on Tuesday, yesterday, and currently stands near three-week lows. Nikkei Futures hit by selloff in the second session due to the action of risk aversion of market participants.
Strengthening yen, which holds the status as a safe haven is an indication of risk aversion of market participants. Nikkei which has a negative correlation with the yen increasingly depressed. Commodity selloff dragging movement of European and US stock markets that affected Asia today.
Anxiety about the global economic slowdown again flared after the Asian Development Bank lowered China’s economic growth this year to 6.8% from the previous projection of 7.2%. As for 2016 is estimated at 6.7%, down from the previous 7%.
The Nikkei futures traded in the range of 17 525 at 7:54 pm, away from daily lows 17 485.
Technically, the index on the trading session today, Wednesday (23/9) is likely to strengthen, test positive trend. At the M15 chart bullish hammer formation to provide opportunities for the index to move upside. However, the volume tends to increase, as well as an early indication of bullish index. In addition, RSI, the M15 chart, was oversold, signaling upside.
It is estimated, the index test the first resistance level of 17610 and 17660. If it fails at 17550, then the next index is expected to tend to retest the support level of 17510 and continued up to the possibility of being in the 17450 area.
Yen Sentiment Risk Aversion
Japanese Yen shines amid risk aversion sentiment despite the US dollar strengthened against the majority of the middle of the major currency pairs. Japanese Yen to be the only major currency to appreciate against the US dollar amid weakness in risky assets such as stock markets in Europe and the US as well as the drop in oil prices. Decision of the US central bank, the Federal Reserve to keep interest rates as a result of the unstable global economic conditions have made market participants again at the safe-haven assets like the Japanese yen.
Today, the Asian Development Bank and even lowered China’s annual economic growth forecast for this year from 7.2% to 6.8%.
This week, investors want to confirm the condition of the global economy through critical data as well as the speeches of the two leaders of the central bank. Wednesday morning, China will release PMI manufacturing index report predicted Caixin version will be released at the level which indicates contraction or slowdown. Last night, the President of the European Central Bank (ECB) Mario Draghi will speak and the market worried about Draghi also voiced a pessimistic outlook as Fed Chairwoman Janet Yellen’s comments last week. Towards the end of the week, Yellen will also make a speech at the University of Massachusetts with a topic of political dynamics and monetary policy, according to The Wall Street Journal media.
Until 01:00 pm, the USDJPY pair traded near 120 with a 0.47% decline in the level of 119.96.
Technically, today’s trading session on Wednesday (23/09), the dollar yen pair has an opportunity to move in a positive trend.
A stronger yen is mainly expected to immediately re-examine the minimal resistance at 120.75 and 121.30 maximum. Meanwhile, if the Yen could not break below 120.24 and then survive another alternative scenario the Yen likely to test support in 120.00 and 119.50 area.
Gold Price Still Depressed
Trading commodity futures exchange on Wednesday (23/9), the price of gold and silver was observed to naturally decline with trading lower as market attention awaiting Chinese manufacturing activity report in this morning.
Ongoing trade in the Asian session, gold berjangkan December delivery was trading lower 12:14% at $ 1.123.20 per troy ounce on the Comex division of the New York Mercantile Exchange. Meanwhile, silver futures for December delivery was trading lower 12:11% to $ 14,740 per troy ounce.
The price of gold and silver was observed to fall as demand for the greenback is still overshadowed pressure after the Fed decided to keep interest rates them back much longer. US economic reports last night was also still able to suppress the price of gold futures to weaken which is based on a report from the FHFA said that house price inflation rose by 0.6% in July. A separate report released by the Federal Reserve stated that the Richmond area manufacturing index decreased -5 in September.
Meanwhile, the market’s attention is being drawn to the morning report that Chinese manufacturing activity is scheduled for release at 08:45 Jakarta time. Survey of economists estimate that the Chinese Manufacturing PMI to rise to a seasonally adjusted 47.6 in September.
In line with the report, the price of gold has the potential turmoil movement given China and India is the largest country who make a purchase of precious metals.
Technically, gold in today’s trading session on Wednesday (09/23) potentially bearish, tested negative trend back, but prone to reversal. RSI indicator tends to re-test support channel and towards the oversold area, but Bollinger Band begins to widen, thus giving impetus for gold to the upside.
It is estimated that the gold price immediately prior to test support in the area of at least 1120.00 and re-test the maximum level of 1114.10. However, if the price of gold is able to break and hold above 1124.40, the predicted gold prices could potentially test Resistance ie, 1127.40 and 1132.72.
