Good morning. Well that wasn’t very bearish at the resistance levels yesterday, and has added a fair few overnight with the BoJ news that they are maintaining monetary stimulus/policy for the time being. Got that Friday feeling already today! We have just nudged above the Raff channels overnight, though the daily chart does have 200ema resistance at 6630 if it got that high. Its certainly been pushed higher and I think next week will be relatively flat as most traders will be on holiday after today. The algos have had their fun this week, hence the volatility, so we may see some profits being banked towards the end of the day, maybe around the 6588 level, if its not chased higher early this morning.
Asia Overnight from Bloomberg
U.S. equity-index futures rose with Asian stocks (MXAP), extending a global surge in shares as the regional index headed for its steepest two-day advance in 13 months. Crude oil pared a fourth weekly decline, the euro traded near a two-year low and wheat fell.
Futures on the Standard & Poor’s 500 Index advanced 0.5 percent by 3:07 p.m. in Tokyo after the gauge capped its best two-day advance since 2011 in New York. The MSCI Asia Pacific Index jumped 1.8 percent after a 0.7 percent gain yesterday. Japan’s Topix index climbed 2.4 percent as the yen traded at a one-week low. Oil in the U.S. rose 1.4 percent after sliding 6.4 percent in the first four days of the week. The euro bought $1.2286 and wheat dropped 1.6 percent.
The Bank of Japan held monetary policy steady today, almost two months after unexpectedly boosting stimulus amid a recession in Asia’s second-largest economy. The MSCI All-Country World Index is headed for its steepest weekly advance since the end of October after the Federal Reserve pledged patience on raising U.S. interest rates and as Switzerland’s central bank introduced negative deposit rates. Russian President Vladimir Putin said the country can withstand an economic downturn as plunging oil prices undermine the ruble.
“We’re seeing a relief rally,” said Koichi Kurose, who oversees about 6 trillion yen ($50 billion) as Tokyo-based chief market strategist at Resona Bank Ltd. “The Fed saying they won’t move toward tightening soon, and Putin saying Russia won’t end up in financial turmoil has helped to alleviate fears. While we’re still concerned as to how low oil prices can go, for now it has rebounded, which is good for risk sentiment.”
Fed Chair Janet Yellen said this week that policy makers are likely to hold key rates near zero at least through the first quarter, even as the U.S. economy strengthens. The central bank, in a statement after its last meeting of 2014, replaced a reference to borrowing costs staying low for a “considerable time” with a pledge to be patient on the timing for higher rates.
All 10 industry groups advanced on the Asia-Pacific stock gauge, which is close to erasing a weekly decline. The S&P/ASX 200 Index climbed 2.5 percent in Sydney, headed for its biggest one-day gain since July 2013 as banks rallied. New Zealand’s NZX 50 Index (NZSE50FG) rose 0.2 percent. The Kospi index in Seoul added 1.6 percent, rising for the first day this week.
Hong Kong’s Hang Seng Index climbed 1.4 percent and a gauge of Chinese shares in the city advanced 0.8 percent. BYD Co., a Chinese carmaker partially owned by Warren Buffett, surged 19 percent after a record drop yesterday. The company said it confirmed with shareholder Berkshire Hathaway Inc. that it has no present intention to reduce its stake.
U.S. investors celebrated a reprieve from energy angst and Russia with the biggest post-Federal Reserve rally in three years. The S&P 500 surged 4.5 percent in the last two days, erasing four-fifths of the seven-day decline that began Dec. 5 and wiped out about $1 trillion of equity value. The gauge pulled within 1 percent of its all-time high as Apple Inc., Berkshire Hathaway and Johnson & Johnson led the advance.
After two weeks in which traders grew obsessed with headlines about OPEC and Russia’s central bank, the rally was ignited by a more familiar institution: Janet Yellen’s Federal Reserve. More than 500 points has been added to the Dow Jones Industrial Average in the nearly nine hoursU.S. exchanges have operated since she pledged patience in raising interest rates.
Should it continue, the recovery would mark the fifth time this year that the S&P 500 has come back after falling more than 4 percent from a high. In comparable drops beginning in January, April, July and September, the index needed about a month to erase losses, data compiled by Bloomberg show.
Gold was little changed at $1,199.40 an ounce on the spot market after climbing 0.7 percent yesterday. The precious metal is down 2 percent this week.
West Texas Intermediate oil climbed to $54.84 a barrel after sinking to the lowest settlement level since May 2009 yesterday. WTI is still down 44 percent this year. Brent crude added 0.6 percent to $59.62 a barrel in London.
The yen slumped more than 2 percent versus the greenback through the previous two days, as the Bloomberg Dollar Spot Index, which tracks the U.S. currency against 10 major peers, touched its highest level since March 2009 yesterday. Japan’s currency was down 0.4 percent at 119.35 per dollar after reaching its weakest level since Dec. 11 last session.
China’s yuan dropped to within 0.3 percent of the weak end of its daily trading band. The currency fell 0.1 percent to 6.2228, extending this week’s loss to 0.6 percent, China Foreign Exchange Trade System prices show.
It earlier retreated to 6.2316, a record 1.78 percent weaker than the reference rate, which the People’s Bank of China today lowered 0.02 percent to 6.1205. The yuan, which can diverge 2 percent on either side of the fixing, has dropped 1.6 percent in the past four weeks.
Indonesia’s rupiah climbed 0.1 percent to 12,548 per dollar. The currency, which earlier this week closed at its lowest level since the 1998 Asian financial crisis, is up for a fourth day, the longest winning streak since July.
The euro was about 0.2 percent from the lowest in more than two years against the dollar amid speculation the European Central Bank will expand stimulus measures as the Federal Reserve moves toward raising interest rates.
Switzerland’s franc was little changed at 1.20453 per euro and 98.05 U.S. cents after sinking the most in about 18 months yesterday as the nation imposed its first negative deposit rate since the 1970s to stem the tide of money flowing from Russia’s financial crisis.
The ruble weakened 2.1 percent against the dollar last session, after surging 11 percent the day before, as Russian President Vladimir Putin struck an uncompromising stance over the nation’s financial woes. The currency reached a record-low 80.10 per dollar this week. One-month forwards on the ruble climbed 1.1 percent to 63.0944 today.
We have broken above the daily channels in a fairly bullish move so I am expecting a dip back to test to the top of that 20 day Bianca at 6516, which also tallies with the 34sma on the 10min chart, and would make a good entry for a long for a push higher. Having broken above 6525 we could quite easily push on to resistance at 6588 next, which is also the top of that 10 minute channel and R1 Weekly. If we see some profit taking there going into the weekend and holiday period then we could drop down to the pivot at 6464 (IG pivot that one). Live charts pivot is lower (as doesn’t take account of the out of hours rise) at 6423. If it all goes pear shaped for the bulls today then support is at 6410 and a break below that will likely see a drop to 6350. However, the bulls are in control at the moment, and that 10minute channel you can see in the chart below looks like a safe bet to play off today.