Entering into US session, Dollar is trading as the weakest one today, followed by Sterling and then Swiss Franc. On the other hand, despite the rather boring RBA rate decision and statement, Australian Dollar rides on easing risk aversion. It’s trading as the strongest one for today. Euro shrugs off another batch of weak German data and follows as the second strongest.
China Shanghai SSE composite ended up 2.74% at 2779.37. The close above yesterday’s high suggests that a near term bottom could be in place at 2692.32, just ahead of July low at 2691.02. Some consolidations would be seen but overall outlook stays bearish. It’s staying well falling 55 day EMA and inside medium term falling channel. An eventual break of 2016 low at 2638.30 is inevitable, just a matter of time. And selloff could accelerate quickly in that case if there is no government intervention.
On the other hand, the resilience of the Singapore Strait Times STI is far more impressive. The breach of July high at 3341.41suggests that rebound from 3176.26 is resuming. We’d expect a break of 38.2% retracement of 3641.64 to 3176.26 at 3354.03 soon, should Asian market firms up. And STI could then have a go at 61.8% retracement at 3463.86.
