Asian markets climbed for a second day against the backdrop of strong US jobs data and higher-than-expected China trade balance. The technical correction is fading as investors took this opportunity to do some ‘Christmas shopping’ – taking advantage of recent pullback in Asian equity markets to find some good bargains.

The Hang Seng Index soared 325 points or 1.14% to 28,965 points – just shine of psychological level of 29,000. Technically, momentum indicators RSI and MACD show that the near term momentum has turned bullish. Investors need to watch the 10-Day SMA to flip upwards in order to confirm a bullish reversal in its near term trend.

Singapore’s Straits Times Index climbed 35.8 points or 1.05% on Monday to 3,460 points, lifted mainly by banks, properties and ComfortDelGro due to its recent M&A announcement. Bank shares remained elevated despite the fact that their dividend yields have been stretched to nearly the lowest level in a decade after this year’s spectacular rally.

The US dollar Index failed to hold above the psychological resistance of 94.0 and then retraced to 93.8 area. Technically, 94.0 is a 61.8% Fibonacci Retracement level therefore serves as a significant resistance. Breaking out above this level will open room for more upsides towards the next resistance at 94.4 area (76.4% Fibonacci Retracement).

Brent oil price broke out above a key 161.8% Fibonacci Extension level of US$64.6, a level not seen since May 2015 due to a major pipeline breakdown in the UK. The North Sea’s main pipeline system is likely to be shut for weeks to undergo repairs, which will have a knock-on effect on operators in the region.  

Bitcoin futures debuted on Cbot on Sunday and its price soared as much as 25%, triggering two circuit breaks within the first five trading hours. The volume traded on the first day of debut showed decent demand from futures traders, and this volume could go higher once the markets are more established. CME Group is also going to launch bitcoin futures next week. 

The introduction of bitcoin futures on the CME is likely to draw attention from more institutional investors and create a more transparent and liquid trading environment. Bitcoin futures also allow market participants to take both long and short positions, which provides an efficient hedging tool and will help to stabilize the price movement in the months to come.

Technical analysis: ​Crude Oil Brent - Cash

  • Breaks out above 161.8% Fibonacci Extension level of 64.6 area
  • Trend indicator 10-Day Simple Moving Average and SuperTrend (10,2) both sloped upwards, suggesting the near term trend is bullish

 

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