10 Feb: Trump’s “phenomenal” tax plan underpins markets. China TB today. Otherwise, politics to be the focus.

By | February 10, 2017
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 Markets have generally had a positive session on Thursday, with stocks, bond yields and the US$ underpinned by comments from Donald Trump, who said that he would be releasing his “phenomenal” tax plan in the next few weeks. In terms of data, the weekly initial jobless claims were also upbeat, falling 12k to 234k, below expectation of 250k, with the 4 week moving average falling to 244.25k, the lowest since 1973.

Friday gets off to a brisk start with the Australian housing data and the important Quarterly Statement on Monetary Policy, which will include outlooks on inflation and GDP growth as well as the current economic situation. This will be closely followed by the China Trade Balance (exp $47.9 bio; Exports +3.3%, Imports +10%) and  it could therefore be a volatile ride for the Aud, possibly taking it out of its recent tight range.  From Europe, we get the EU Leaders Summit, at which Brexit will be top of the bill along with the many other issues faced, with Greece also likely to be near the top of the agenda. The UK Manufacturing/Industrial Production will be released, as will the important 3 month NIESR GDP Estimate. From the US we get the Provisional Michigan Consumer Sentiment Index (exp 97.8), the Monthly Budget Statement and the Baker Hughes Oil Rig Count, which has recently risen and helped to keep a cap on the oil price. The other major event to keep an eye on today will be the meeting between Donald Trump and Japan PM, Shinzo Abe in Washington, which could produce some volatility in US$Jpy.

EURUSD:  Weighed down by US$ strength and increasing concerns that far right contender Marine Le Pen  is becoming a serious contender for the presidential elections in April and May. She would like to take France out of the Euro. ECB president Mario Draghi will meet German Chancellor Angela Merkel for a regular closed meeting today. No press conference is scheduled.

GBPUSD:  Unchanged after a choppy session that saw topside stops tripped before heading lower as the dollar gained strength.

USDJPY: The US$ is higher today following Trumps tax announcement. Markets now look towards the Trump/Abe meeting, due to take place today/tomorrow.

AUDUSD: Range-bound again, unchanged from yesterday. Statement on Monetary Policy/China Trade Balance in focus today.

NZDUSD: Lower after the dovish outlook from the RBNZ, despite leaving rates unchanged.

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US STOCKS: All time highs after Trump comments.

ASX:  Higher, in line with the lead from US markets.

METALS: Under minor pressure from the firmer US$.

OIL: Steady, but slightly firmer after an unexpected drawdown in U.S. gasoline inventories sparked a rally.

CURRENCIES
EURUSD: 1.0662
Res  1.0710  1.0755  1.0800
Sup  1.0640  1.0620  1.0585
USDJPY: 113.20
Res  113.30  113.50  113.95
Sup  112.75  112.25  112.00
GBPUSD: 1.2501
Res  1.2525  1.2565  1.2585
Sup  1.2495  1.2475  1.2455
USDCHF: 1.0009
Res  1.0020  1.0045  1.0075
Sup  0.9970  0.9930  0.9900
AUDUSD: 0.7630
Res  0.7650  0.7665  0.7680
Sup  0.7605  0.7590  0.7570
NZDUSD: 0.7186
Res  0.7220  0.7250  0.7275
Sup  0.7160  0.7140  0.7115
INDICES / COMMODITIES
S+P: 2305
Res  2310  2316  2320
Sup  2300  2296  2288
DJI: 20138
Res  20150  20200  20250
Sup  20080  20050  20000
ASX SPI: 5633
Res  5644  5658  5668
Sup  5624  5610  5580
GOLD: 1234
Res  1244  1254  1266
Sup  1228  1220  1210
SILVER: 17.71
Res  17.90  18.00  18.20
Sup  17.60  17.45  17.25
OIL (WTI): 52.98
Res  53.20  53.50  54.10
Sup  52.35  51.75  51.20

 

Indices/commodities
S&P Futures 2305
US stocks are at all time highs following Trump’s announcement of an impending “phenomenal” tax plan. The momentum indicators are now leaning higher and those who are brave enough can probably go along for the ride. That won’t include me as I think the stockmarkets could be an accident waiting to happen.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
2325 Minor 2300 Minor
2320 Minor 2287 Session low
2315 Minor 2280 9 Feb low
2310 Minor 2270 3 Feb low
2305 Session/All time high 2264/2262 3 Feb low/1 Feb  low
DJI Futures 20138
Ditto S+P.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
20450 Minor 20050 Minor
20400 Minor 20000 Minor
20350 Minor 19981 Session low
20200 Minor 19931 6 Feb low
20149 Session/All time high 19782 3 Feb low
ASX SPI 5633
The ASX is now closing in on the chart gap 5645 chart gap from 27 Jan beyond which, 5660/70 would beckon, as hinted at by the 4 hour charts.  The dailies remain neutral though and I would not be getting too carried away on the topside. Dips today seem likely to hold 5600/10. Trading from the long side, buying dips is mildly preferred, with a SL placed at 5585.
24 Hour:  Prefer to buy dips Medium Term: Neutral
Resistance Support
5688 (61.8 of 5789/5526) 5610 Minor
5668/70 27 Jan high/19 Jan high/50% of 5789/5555 5590 200 HMA
5657 (50% pivot of 5789/5526) 5577 Session low
5645 Chart Gap 5526 7 Feb low
5634 Session high 5498 (38.2% of 5029/5789)
GOLD 1234
Gold has dipped back to the minor rising trend support at 1230 after being unable to overcome the 1244 resistance (200 WMA). The 4 hour/daily momentum indicators are mixed, but the short term charts hint at the chance of a run back towards 1220 and possibly even towards 1210, so selling into strength, with a SL placed above the 1244 resistance seems to be the plan. Further out, the daily/weekly momentum indicators remain constructive and an eventual topside break seems possible, which could see a run towards 1255 and then to 1265, so if we see a dip back towards 1210/00, buying into it, with a SL placed under 1200 could be a plan.
24 Hour: Midly bearish Medium Term: Mildly bullish
Resistance Support
1275 Minor 1230 9 Feb low/Session low
1263 200 DMA 1220 100 DMA
1255 (61.8% of 1337/1222) 1207 3 Feb low
1248 (50% pivot of 1375/1222) 1200/1198 100 WMA /2 Feb low
1244 200 WMA /Session high 1188 30 Jan low
SILVER 17.71
Silver again tested the 17.85 resistance but has failed to overcome it and currently sits back at 17.70. While the dailies remain constructive the short term momentum indicators suggest that we could see slightly lower levels, and below the 17.62 session now could see a run back to 17.35/45 and possibly to 17.20/25. Further out, with the dailies still looking positve, another run to  the strong resistance at 17.85 would not surprise at some stage, above which could see even stronger resistance at 18.00, so while mildly bearish today, buying dips for another leg higher may also be a plan, with a SL placed below 17.00.
24 Hour: Midly bearish Medium Term:  Mildly bullish
Resistance Support
18.65 Minor 17.62 Session low
18.45 Descending Trend Resistance 17.45 6 Feb low
18.20 (76.4% of 18.98/15.63) 17.35 (23.6% of 15.63/17.85)/100 DMA
18.00 200 WMA 17.23 3 Feb low
17.85/86 200 DMA /Session high 17.00 (38.2% of 15.63/17.85)
OIL (WTI) 52.98
WTI had a reasonably tight range (52.34/53.19) but has finished the day slightly higher, with the 4 hour momentum indicators suggesting further gains could be possible today. If so, above the session high, we could then see a return to minor resistance at 53.40 and beyond there to 54.10/30 although possibly not today. On the downside, buyers will arrive at the session low and again at 52.00, below which could see a bit of a run towards 51.20. Overall it looks set to remain choppy but the mild preference is to buy dips, with a SL placed below 52.00 but looking for a run towards 54.00.
24 Hour: Prefer to buy dips Medium Term: Cautiously long
Resistance Support
55.21 3 Jan high 52.34 Session low
54.19/31 3 Feb high /6 Jan high 51.20 7 Feb low/9 Feb low
54.10 6 Feb high 50.70 10 Jan low
53.50 Minor 50.20/10 (38.2% of 42.18/55.21) / Reverse Head/Shoulders Neckline
53.19 Session high 49.95/98 100 DMA /15 Dec low

EURUSD: 1.0662
The stronger dollar has placed the Euro under some pressure but it remains above the recent lows, with any movement today likely to be driven by political soundbites. More rangebound trade could be in order but the dailies look heavy, so below today’s low would head towards 1.0620/00, below which, further decent support lies in the 1.0680/90 area.  The 4 hour charts look fairly flat today, so any recovery would find offers in the 1.0700/15 area, above which would run into decent offers at around 1.0750, but beyond which there is not too much to stop it heading towards 1.0800. Today could be similar to yesterday, given the lack of any major data, and a range of 1.0620/1.0700 would not surprise. Keep an eye out for anything coming from the EU leaders summit or from Trumps Twitter Account! The China Trade result may affect risk sentiment if too far from expectations.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
1.0855 Weekly Kijun 1.0650 Minor
1.0825/28 38.2% of 1.1616/1.0340 /Daily cloud top / 2 Feb high 1.0640 9 Feb low
1.0797/90 3 Feb high /6 Feb high 1.0620 30 Jan low
1.0749 7 Feb high 1.0588 19 Jan low
1.07/0913 Session high/9 Feb high 1.0578 16 Jan low

Economic data highlights will include:

EU Extraordinary Summit, US Import/Export Index, Michigan Consumer Sentiment Index, Baker Hughes Oil Rig Count.

Meta Trader
EURUSD: 4 Hour


USDJPY: 113.20
US$Jpy is higher today after stops were tripped above 112.50, with the dollar gaining on all fronts on hope of Trumps tax plan. Good resistance now lies at the day’s highs, and there are US$2 bio of 112.00 option expiries later today so the upside may be limited, and much of the day will be spent waiting for any announcement from the Trump/Abe meeting. The 4 hour/daily momentum indicators do appear to be leaning slightly higher though, and if the nearby resistance is taken out, we could then see a run towards 113.60 and possibly to 114.00. On the downside, support will be seen at 112.75 and at 112.30, with a chance of heading back to 112.00 although the charts suggest this may now be unlikely.
24 Hour: Prefer to buy dips Medium Term: Neutral
Resistance Support
114.28 (38.2% of 118.66/111.61) 112.75 200 HMA
113.94 1 Feb high 112.30 100 HMA
113.60 Descending trend resistance 112.00 Minor
113.45 3 Feb high 111.62/58 9 Feb low/7 Feb low
113.27/29 (23.6% of 118.66/111.61)/Session high /Daily Tenkan 111.35 28 Nov low/Weekly cloud top/100 DMA

Economic data highlights will include:

Tertiary Industry Index, Trump/Abe Meeting..

Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2501
Cable tripped stops above 1.2550 to head to the session high of 1.2582 ahead of Trump’s tax announcement which led to the US$ finding new legs and sent Cable back to session lows, settling the day just below 1.2500. The charts are indecisive today and further choppy trade may be in store although the preference remains to buy dips, but with a tight SL placed under 1.2450.
24 Hour: Prefer to buy dips. Medium Term: Neutral
Resistance Support
1.2640 Minor 1.2496 Session low
1.2600 Minor 1.2473 9 Feb low
1.2582 Session high 1.2458 100 DMA
1.2565 (61.8% of 1.2706/1.2346) 1.2430 Daily cloud top
1.2525 200 HMA 1.2385 Daily cloud base

Economic data highlights will include:

Manufacturing/Industrial Production, Trade Balance .

Meta Trader
GBPUSD: 4 Hour


USDCHF: 1.0009
US$Chf has settled above parity today and appears to be building the momentum to head back towards 1.0050 and possibly on to 1.0100. Buying dips with a SL placed under the session low of 0.9930 is preferred.
24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
Resistance Support
1.0121 19 Jan high 0.9970 Minor
1.0094 20 Jan high/(50 % of 1.0335/ 0.9860) 0.9930/35 9 Feb low/ Session low
1.0075 Minor 0.9903 7 Feb low
1.0042/45 (38.2% of 1.0335/0.9860)/30 Jan high 0.9869/75 3 Feb low/200 DMA
1.0018 Session high 0.9850 61.8% of 0.9549/1.1343

.

Meta Trader
USDCHF: 4 Hour


AUDUSD: 0.7630
It has been another rangebound session and the short term momentum indicators are giving little hint of any directional move so it could be a similar day ahead although the Statement on Monetary Policy and the China Trade Balance could provide some volatility. The dailies appear to be rolling over so the preference is to trade from the short side, but with a tight SL on a break of 0.7700.
24 Hour: Neutral Medium Term: Turning bearish
Resistance Support
0.7777 8 Nov high 0.7610 Session low
0.7755 Descending trend resistance 0.7590/92 19 Jan low/(38.2% of 0.7160/0.7695)
0.7695 3 Feb high/3 Feb high 0.7570 13 Jan low
0.7680/83 7 Feb high/6 Feb high 0.7550/41 2 Feb low/1 Feb  low
0.7663/65 Session high/9 Feb high 0.7428 (50% pivot of 0.7160/0.7695)

Economic data highlights will include:

Investment Lending for Homes, Home Loans, RBA Monetary Policy Statement, China Trade Balance

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Meta Trader
AUDUSD: 4 Hour


NZDUSD: 0.7186
The Kiwi continues to trade under pressure from the outcome of yesterday’s RBNZ meeting and the 4 hour/daily momentum indicators hint that further downside potential could lie ahead. Fibo support lies at the day’s low, a break of which could see a run towards 0.7115/0.7100. The hourlies hint at some minor bullish divergence, so selling rallies is preferred, with a SL placed at 0.7260.
24 Hour: Prefer to sesll rallies Medium Term: Mildly bearish
Resistance Support
0.7333 9 Feb high 0.7172 Session low /(38.2% of 0.6857/0.7375)
0.7295 (61.8% of 0.7375/0.7270) 0.7145 Minor
0.7275 (50% of 0.7375/0.7270) 0.7115 (50% of 0.6857/0.7)
0.7250 (38.2% of 0.7375/0.7270) 0.7100 Minor
0.7220 (23.6% of 0.7375/0.7270) 0.7070 13 Jan low

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Meta Trader
NZDUSD: 4 Hour