Dow Jones Ends Stable Month on a Downbeat as ASX 200 Focuses on a Rising Wedge

Dow Jones, ASX 200, Australia GDP, Technical Evaluation – Asia Pacific Indices Briefing

• Dow Jones weakened to wrap up strong month for shares on Wall Avenue
• Greater Euro-area CPI, comfortable US client confidence dented sentiment
• ASX 200 could look previous Australian GDP knowledge as focus stays on Covid

Tuesday’s Wall Avenue Buying and selling Session Recap

On Wall Avenue, the Dow Jones Industrial Common, S&P 500 and Nasdaq Composite closed -0.11%, -0.13% and -0.04% respectively. This quiet day wrapped up a rosy month for the indices, which gained 1.22%, 2.90% and 4.00% respectively. The outperformance of tech shares in comparison with cyclical shares was possible fueled by the Fed’s reiteration final week that regardless of coverage tapering being simply across the nook, price hikes will not be.

The cautiously jittery temper in monetary markets could have been as a result of a mix of higher-than-expected Euro-area inflation and disappointing US Convention Board Client Confidence knowledge. German 10-year authorities bond yields closed on the highest since July 19th, possible reflecting rising bets in regards to the European Central Financial institution finally becoming a member of the Fed to cut back quantitative easing down the highway.

Merchants could have additionally been positioning themselves forward of September, which traditionally tends to be a disappointing month for the S&P 500. That is typically attributed to seasonal habits as buyers return from the summer time vacation to e-book income. Nonetheless, the post-Covid world has been filled with surprises. This contains the surge in retail buying and selling, maybe threatening to upend this seasonal dynamic.

Dow Jones Technical Evaluation

On the each day chart under, Dow Jones futures look like consolidating greater inside the boundaries of a bearish Rising Wedge chart sample. Detrimental RSI divergence continues to persist, displaying that upside momentum is fading. That may at occasions precede a flip decrease. In any other case, clearing fast resistance at 35547 exposes the 38.2% Fibonacci extension at 36357.

Dow Jones Futures – Every day Chart

Chart Created in TradingView

Wednesday’s Asia Pacific Buying and selling Session

With that in thoughts, Asia-Pacific markets could observe the cautious lead set by Wall Avenue for Wednesday’s session. A top-tier occasion threat will probably be Australian second-quarter GDP knowledge for the ASX 200. The studying accounts for financial output produced from April by means of June 2021, which is previous to the nation’s most up-to-date Covid outbreak amid the extra contagious Delta pressure.

Which means that it doesn’t embrace the economically-damaging results of the lockdowns that the nation undertook in latest weeks. Australian preliminary companies PMI knowledge for August confirmed a cloth contraction in financial exercise. As such, buyers could brush apart the GDP studying all collectively and place extra concentrate on the Q3 report due later this yr in addition to extra well timed knowledge.

ASX 200 Technical Evaluation

The ASX 200 continues to commerce underneath the all-time excessive set on August 13th, with the index consolidating greater inside a bearish Rising Wedge chart sample. Costs are sitting simply on the ground of the wedge, the place a breakout to the draw back may open the door to a cloth flip decrease. Such an consequence could expose the 100-day Easy Shifting Common (SMA) which can reinstate the dominant focus to the upside.

ASX 200 Futures – Every day Chart

Chart Created in TradingView

— Written by Daniel Dubrovsky, Strategist for DailyFX.com

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