13 Dec: US$ softer on pre-FOMC position squaring. China Retail Sales, German/UK CPI, ZEW in focus today.

By | December 13, 2016

The dollar has generally traded on a softer note against the other majors on Monday as markets prepare for the FOMC meeting on Wednesday. The Yen has also been weak, placed under some pressure by the surging oil price which gapped higher following the weekend agreement by non –OPEC countries to cut production. Elsewhere, US stocks are a little lower, after having made yet another new all time high early in the session, while Gold is a little higher after having reached a new 10 month low earlier in the day

Today will be busy in terms of data, starting off in Asia with the release of the NZ Manufacturing Sales, the Australian NAB Business Conditions/Confidence and the China Retail Sales/Urban Investment/Industrial Production, to be followed in Europe with the German and UK CPI figures.  There will not be too much to come from the US today, and the market will now be looking to the FOMC on Wednesday. With a rate hike more of less a foregone conclusion; traders will be looking to the Statement/Press Conference for guidance as to the next move from the Fed heading into 2017. With Janet Yellen likely to offer her normal, balanced/vague opinion it could well be that we may see some profit taking on long dollar positions following the announcement as traders begin to square up before Christmas. The Dollar Index (DXY) charts are looking evenly balanced, rather than bullish, so a cautious stance may be required heading into the holiday period although at some stage the Euro and the Yen in particular appear set to remain under pressure

CURRENCIES
EURUSD: 1.0634
Res  1.0650  1.0700  1.0740
Sup  1.0600  1.0570  1.0525
USDJPY: 115.09
Res  115.35  115.50  116.10
Sup  114.80  114.60  114.20
GBPUSD: 1.2677
Res  1.2700  1.2740  1.2775
Sup  1.2640  1.2610  1.2565
USDCHF: 1.0140
Res  1.0170  1.0200  1.0215
Sup  1.0125  1.0100  1.0080
AUDUSD: 0.7488
Res  0.7505  0.7520  0.7545
Sup  0.7470  0.7445  0.7430
NZDUSD: 0.7183
Res  0.7210  0.7225  0.7240
Sup  0.7170  0.7155  0.7130
INDICES / COMMODITIES
S+P: 2254
Res  2260  2270  2280
Sup  2250  2240  2230
DJI: 19772
Res  19820  19900  19875
Sup  19700  19600  19500
ASX SPI: 5550
Res  5586  5600  5640
Sup  5540  5510  5474
GOLD: 1162
Res  1170  1180  1188
Sup  1156  1150  1140
SILVER: 17.11
Res  17.25  17.40  17.55
Sup  17.00  16.80  16.65
OIL (WTI): 52.52
Res  53.50  54.45  55.00
Sup  51.65  51.00  50.00

 

Indices/commodities
S&P Futures 2254

The S+P made it to another all-time high of 2270 on Monday, but then turned a little lower to finish the session at 2255. The short term momentum indicators have bow turned a little lower so further profit taking ahead of the FOMC would not surprise.

Given the positive look of the daily momentum indicators though further gains seem possible where back above 2270 technical levels will be tricky to find, but a slow grind towards 2300 would not surprise. Before then, heading into Wednesday’s FOMC Meeting it would be of no surprise to see some profit taking, so a tight SL on long positions would be wise.

24 Hour: Neutral

Medium term: Neutral

 

                                         Resistance Support
2280 Minor 2240 Minor
2275 Minor 2235 Minor
2270 All-time high/Session high 2230 Minor
2265 Minor 2225 Minor
2260 Minor 2220 Minor
DJI Futures 19772

Ditto S+P.  The DJI made it to a new all-time high of 19874 before turning down to currently sit at 19775. Further profit taking ahead of the FOMC would not surprise although the longer term momentum indicators remain constructive, so buying dips remains the theme.

24 Hour: Neutral

Medium term: Neutral

 

Resistance Support
20000 Minor 19700 Minor.
19950 Minor 19600 Minor
19900 Minor 19500 Minor.
19874 All-time high/Session high 19400 Minor
19800 Minor 19300 Minor.
ASX SPI 5550

The ASX was unable to make any real gains on Monday, and having reached 5585 it has turned a little lower to close the day at 5550.

Given the positive look of the daily /weekly momentum indicators though, further gains eventually seem possible, suggesting that we could see a run to 5600 and above, opening the way towards the August 2015 high at 5671 and the Fibo resistance at 5683.

On the downside, minor support lies at Friday’s 5540 low, ahead of 5525 and 5510. Back below 5500 could then see a run back towards 5475 although this looks unlikely. If wrong, then below here could see a run towards the 7 Dec low of 5447 and then to the 6 Dec low of 5422.

24 Hour: Neutral

Medium term: Neutral

 

Resistance Support
5683 (76.4% of 5730/4643) 5547 Session high
5671 Aug 2015 high 5525 Minor
5540 Minor 5510 Minor
5600 Minor 5473 Minor
5585 Session high 5450 (23.6% of 5029/5681)
GOLD 1162

Gold dipped t a new 10 month low of 1151 but has since bounced, assisted by the softer dollar, to close the day at 1162.

The shorter term momentum indicators now look slightly more supportive and if correct, a squeeze to the topside will find sellers at 1170, 1180, at the 5 Dec 1188 high and then again in the 1195/1200 area although this looks unlikely to be seen for a while.

On the downside, support will be seen at the 1151 lows, but below which there is little to hold the price up until 1120 although this looks unlikely today. Beneath there would allow a move to 1100, a break of which could then see a run towards 1090 and even to 1050.

Given that the weeklies point lower I still prefer to trade strategically from the short side although the dailies may be looking to find a near term base, so some caution is warranted., Overall, with the dollar strength looking to persist into 2017, the upside for Gold looks limited.

24 Hour: Neutral

Medium term: Prefer to sell rallies

 

Resistance Support
1194 (23.6% of 1337/1151) 1151 Session low
1188 5 Dec high 1140 Minor
1180 7 Dec high 1130 Minor
1172 200 HMA 1122 (76.4% of 1046/1375)
1165 Session high 1108 28 Jan low
SILVER 17.11

Silver has bounced from the 16.67 session low to close back above 17.00 after trading up to 17.19.

If we do head lower again, then below the session low could see another run back to Monday’s low of 16.48, a break of which could see another test of the 2 Dec low of 16.31. Under that would eventually open the way to the minor double bottom at 16.16 and possibly 16.00. On the topside, resistance will be seen at 17.20/25, above which would then open the way to 1.7.50/55 and possibly back to the 200 DMA at 17.75. Overall, I still prefer to look for levels to sell into as the expected dollar strength heading into next year should see commodities trading defensively.

24 Hour: Prefer to sell rallies

Medium term: Neutral

 

Resistance Support
17.75 200 DMA 16.80 Minor
17.57 (50% of 18.98/16. 17) 16.67 Session low
17.40 14 Nov high 16.48 5 Dec low
17.23 (38.2% of 18.98/16. 17)/7 Dec high 16.31 2 Dec Low
17.19 Session high 16.16 25 Nov Low/23 Nov low
OIL (WTI) 52.52

The weekend OPEC/Non-OPEC agreement to cut production has seen WTI gap higher, trading a Monday range of 52.35/54.48.

A cautious stance is required ahead of the FOMC Meeting although the momentum indicators do seem to be aligning to point higher; where the initial resistance will be at the 54.48 session high. Above there could move higher still, towards 57.00 and in the long term, as I said before, the reverses head/shoulder formation has an objective of 82.00.

The downside will see bids at 51.20/50, where the chart gap and the h/s neckline both lie. Stop-losses on long positions should be left under here as technically; a break of this could see a sharp reversal lower. The whole OPEC deal depends on the agreement holding together and if there are any signs of a crack in the adherence to sticking to the production cuts, we could see WTI decline sharply. Until then, trading it from the long side appears to be the plan.

24 Hour: Prefer to buy dips

Medium term: Mildly bullish

 

Resistance Support
57.05 (38.2% of 107.65/26.03) 52.16 Session low
56.00 Minor 51.63 Friday high-Chart Gap
55.00 Minor 51.10 H/S neckline
54.48 Session high 50.00 Psychological
54.00 Minor 49.58 8 Dec low

EURUSD: 1.0634

The Euro has squeezed higher through the session as traders take profit on long dollar positions ahead of the Wednesday FOMC Meeting.

Further consolidation at close to current levels looks likely, with little US data on the agenda today although the German CPI and the German/EU ZEW Economic Sentiment Survey may provide some minor volatility.

On the downside, back below 1.0600 would allow a retest of the session low of 1.0525 and last Monday’s low of 1.0504.  Below 1.0500 would eventually open the way to the March 2013 low at 1.0461. Under here there is very little to hold the Euro up until we reach almost to parity (1.0070=61.8% of 0.8225(Oct 2000 low)/1.6037(July 2008 high)) and at some stage we seem destined to get there, and I suspect a fair bit lower in 2017. On the topside, minor resistance will be seen at 1.0650, above which could see a run back to 1.0700 and possibly to 1.0740. With the short term momentum indicators aligning to mount higher, it looks as though the squeeze to the topside may continue today but as before, looking to sell into near term strength seems to be the plan.

24 Hour: Mildly bullish

Medium term: Prefer to sell rallies

 

Resistance Support
1.0873 8 Dec high 1.0600 Minor
1.0790 (76.4 of 1.0873/1.0525) 1.0570 Minor
1.0738 (61.8 of 1.0873/1.0525) 1.0524 Session low
1.0700 (50% pivot of 1.0873/1.0525) 1.0504 5 Dec low
1.0651/55 Session high/200 HMA 1.0461 March 2015 low

Economic data highlights will include:

German CPI/HICP, German/EU ZEW Economic Sentiment Survey, EU Unemployment (Q3), US NFIB Business Optimism Index, API Weekly Crude Oil Stock Inventory

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 115.09

US$Jpy has been up to 116.11, with the Yen under pressure on the back of the stronger oil price of which Japan is a major importer. Having reached the session highs, it the dollar since drifted steadily lower, in line with the decline from new highs in the US stock-markets.

The short term momentum indicators are now aligned lower, with the 4 hour charts showing increasing bearish divergence, so further downside potential would seem possible today and on top of this, the daily charts remain at overbought extremes so further corrections would not surprise. If so, back below 115.00, minor support will be seen at 114.80/85 and then below the rising trend support at 114.60 there is not too much ahead of Friday’s low of 114.00.  For the time being, a cautious stance is required although trading from the short side appears to be the short term play while further out, buying dips looks to be the longer term plan.

On the topside, resistance will be seen at the major Fibo/Cloud levels at around 115.50, a break of which then sees little to stop it heading back to 116.00+, and eventually to 117.80 (76.4% of 121.05/98.94). Given the look of the charts, I am not sure that we are going to see 116.00 today.

24 Hour: Mildly bearish

Medium term: Neutral – Prefer to buy dips

 

Resistance Support
116.50 Minor 114.85 Session low
116.11 Session high 114.60 Rising trend support
116.00 Minor 114.20 200 HMA
115.85 Minor 113.80 Minor
115.50 (61.8% of 125.85/98.94)/Weekly cloud top 113.11 8 Dec low
Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2677

Cable is a bit higher today, after some position squaring ahead of the FOMC/BOE Meetings, both due later in the week.

The daily and 4 hour charts both look fairly flat so a cautious stance is required but with the weeklies pointing higher I still prefer to look for dips to buy into as long as we stay above the rising trend support, now at 1.2535. Under there could bring about further weakness, taking Cable back to 1.2400/10 so keep stops tight below 1.2500.  On the topside, a run back above 1.2700 could potentially open the way back to 1.2740 ahead of the 1.2774 trend high, beyond which, further sellers will arrive at the 100 DMA at 1.2785. Watch out for today’s inflation data. A soft number will place downside pressure on Cable (exp 0.2%mm, 1.2%yy), potentially for a look at the trend support line. Until we break that, I cautiously prefer to trade from the long side.

24 Hour: Neutral

Medium term: Prefer to buy dips

 

Resistance Support
1.2800 Minor 1.2650 Minor
1.2785 100 DMA 1.2625 200 HMA
1.2774 6 Dec high 1.2600 Minor
1.2750 Minor 1.2566 Session low
1.2696 Session high 1.2552/48 Friday low /(23.6% of 1.1821/1.2774)

UK CPI, PPI, RPI

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0140

US$Chf is a little lower today after a range of 1.0123/98.

Once again, a cautious stance is required, but with the hourly and the 4 hourly charts now pointing a little lower another test of the downside seems possible, although ahead of the FOMC some choppy, sideways action seems likely.

24 Hour: Mildly bullish Medium term: Neutral – Prefer to buy dips

                                                                

Resistance Support
1.0255 22 Nov high 1.0123 200 HMA/Session low
1.0223 2 Feb high 1.0092 (61.8% of 1.0018/1.0213)
1.0213 Friday high 1.0065 7 Dec low
1.0185 Minor 1.0052  (23.6% of 0.9548/1.0213)
1.0160 Minor 1.0000 Psychological
Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7488

The Aud is back near 0.7500 on Monday after having been underpinned by the generally soft tone of the US$.

Technically, the daily momentum indicators again appear to be tilted towards slightly higher levels, although the 4 hour indicators still look pretty flat so a sideways session looks possible albeit with limited downside momentum. On the topside, back above 0.7500, further offers would arrive at 0.7520, which should be strong resistance (200 DMA) but above which would then open the way to 0.7540 although above there looks rather limited today and it would not surprise if the 200 DMA acted as a magnate ahead of the FOMC.  On the downside, the initial support lies at 0.74770 ahead of the session low of 0.7430. Below here opens the way to 0.7400/10, a break of which could then head back to the recent support at 0.7360/70. Under there could then see a move towards 0.7335 and then to 0.7300/10 although this looks over the horizon in the near term.  As before, I prefer to trade from the short side, looking for rallies to sell into although caution is warranted  in case the NAB Business Conditions/Confidence or the China Retail Sales (exp +10.1%mm, IP exp 6.1%) surprise to the topside, which would carry the Aud higher.

24 Hour: Prefer to sell rallies

Medium term: Mildly bearish.

 

Resistance Support
0.7600 Minor 0.7470 Minor
0.7570 16 Nov high 0.7430 Session low
0.7542 50% pivot of 0.7777/0.7310 0.7415/11 7 Dec low/5 Dec low
0.7522 200 DMA 0.7400 2 Dec Low
0.7503 Session high/8 Dec high 0.7363/61 24 Nov low/22 Nov low

Economic data highlights will include:

House Price Index, NAB Business Conditions/Confidence, China Retail Sales, Urban Investment, Industrial Production

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7183

The Kiwi has been back at 0.7206 on Monday, having been underpinned by the generally soft tone of the US$, albeit that it is now slightly lower at 0.7180.

While the daily momentum indicators still look mildly constructive the short term charts are neutral, suggesting that another choppy session may lie ahead, once again largely contained within the 0.7100/0.7200 range. For the coming session the session low of 0.7115 currently looks pretty safe, below which 0.0.7090/0.7100 will provide support.

On the topside, minor resistance will again be seen at 0.7200/10 and then at the Fibo level of 0.7236 although this too, currently looks pretty safe.

24 Hour: Neutral

Medium term: Prefer to sell rallies

 

Resistance Support
0.7300 (76.4% of 7400/0.6983) 0.7170 Minor
0.7270 Minor 0.7150 Minor
0.7236 (61.8% of 0.7400/0.6983) 0.7115 Session low
0.7220 8 Dec high 0.7090 Minor
0.7206 Session high 0.7068 5 Dec low

Economic data highlights will include:

Manufacturing Sales

Meta Trader
NZDUSD: 4 Hour

nzd

The post 13 Dec: US$ softer on pre-FOMC position squaring. China Retail Sales, German/UK CPI, ZEW in focus today. appeared first on FX Charts Daily.