Asian Stocks Fall; Dollar May See Buyers

NEW YORK (TheStreet) -- Asian equity markets are battling negative futures market numbers that have dragged European and U.S. futures lower, and have pushed oil and gold lower in Asian trade.

If this holds, the U.S. dollar may find buyers in the near term. Not only are global markets starting the week under their Friday closes, the four-hour chart trend reads have swung from long to neutral, and that indicates that the dollar may find buyers in the early part of the week. The long-term dollar view may look weak, but there will be plenty of bullish dollar runs between now and the major pairs making the climb higher.

Germany has settled the election campaign, with very little change taking place, and as such the euro looks set to continue the challenge of reflecting fair value on the dollar index. The 60% weighting that euro/dollar has on the index really does make it very important to gauge the sentiment and order flows on, and right now the pair is showing a long trend, but has a very mixed sentiment and order flow read.

The five-minute candles on Aussie dollar/U.S. dollar are huge when compared with other pairs, and we are trying to work out whether the price action is consolidation (the holding of existing positions, absorbing the market mechanics while waiting for the next break higher), or distribution (the selling of existing positions without drawing attention to the fact that it is being done). Whatever it is, a major player is at work trying to get something done, and fighting tooth and nail to get there.

Stock markets across Asia have opened with losses at the start of the trading week. The Japanese Nikkei dropped 212.92 points and the Australian S&P/ASX fell by more than 49 points. The markets are suffering as exporters like Honda(HMC Quote) decline more than 4.6%. Airlines also were falling with Japan Airlines trading 3% lower and All Nippon Airways down by 0.8%.