XJO to stall without US leads

The XJO is expected to edge lower on open this morning. The U.S was closed overnight, and their futures did little. This could translate into a similar day of no action, or our market may decide to profit take.

Our market closed firmly in the green yesterday, but didn’t manage to push through key resistance. It would seem reasonable to see a small fall today as we rebound off both the downtrend line and the key resistance which come in at roughly 7,830 to 7,850. Furthermore, U.S futures have edged into the red.

We continue to trade in the broad pennant and channel patterns, and therefore will need to see how the U.S trades from here. If they sell off and create a new consolidation range, we should expect our market to return straight back to the key 50 and 100 day MAs which come in at roughly 7,750. However if the U.S does continue higher, then our market may feel comfortable breaking 7,850 and moving on to test all-time high resistance at roughly 7,900. It would be hard to expect our market to make fresh highs however as wholistically our economy is in a different position to the U.S. Whilst they are moving towards rate cuts as their macro-economic data cools, our RBA is getting closer to raising rates as our inflation remains sticky, despite GDP and consumerism falling. For us to break 7,900 we would likely need to be dragged kicking and screaming by the U.S.

US Markets

US markets were closed overnight for the Independence Day Holiday. Their futures were flat. US markets will face a major test tonight with the unemployment report, with expectations that it will be largely unchanged from last time. Should the report stray from the expected results, we could see directional movement. Regardless, US shares remain on a very bullish slant, though further gains are likely to be slow to come.

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