14 Dec: Markets mostly on hold ahead of today’s FOMC result. DJI approaching 20,000!

By | December 14, 2016

Markets have been a little choppy on Tuesday but by the end of the session most products have traded pretty much sideways while awaiting the outcome of today’s FOMC Meeting. The main interest has been in the stock markets, which have again made a new all time high, with the DJI pulling up just 45 points short of 20,000.  In terms of data, the UK CPI surprised to the upside, rising to 1.2% yy in November, up from October’s 0.9% yy and beating expectations of 1.1% yy for the highest reading in two years. The German ZEW economic sentiment indicator was unchanged at 13.8 in December, below expectation of 14.2 while the ZEW current situation rose to 63.5, beating expectation of 59.2.

Wednesday will be all about the FOMC Meeting. With a rate hike more or less a certainty the real interest will lie in the Statement and n Janet Yellen’s Press Conference. A hawkish outlook from JY will see the dollar head higher but that appears unlikely and a cautious stance would seem more probable, with traders likely to place close attention to the Fed’s growth expectations and to when we might expect any further rate hikes in 2017. Aside from the FOMC, the US Retail Sales will be released, alongside the monthly Industrial Production and Capacity Utilisation figures. Ahead of the US session, Asia will look to the Australian Consumer Confidence data and then to quarterly Japanese Tankan, while from the UK , traders will focus on the November Unemployment (exp 4.8%, CC +5K) figures

CURRENCIES
EURUSD: 1.0618
Res  1.0665  1.0700  1.0740
Sup  1.0600  1.0570  1.0525
USDJPY: 115.26
Res  115.50  115.80  116.10
Sup  115.00  114.70  114.35
GBPUSD: 1.2662
Res  1.2700  1.2730  1.2775
Sup  1.2640  1.2610  1.2565
USDCHF: 1.0128
Res  1.0145  1.0185  1.0215
Sup  1.0100  1.0080  1.0050
AUDUSD: 0.7493
Res  0.7520  0.7540  0.7570
Sup  0.7470  0.7445  0.7430
NZDUSD: 0.7197
Res  0.7230  0.7250  0.7270
Sup  0.7170  0.7155  0.7130
INDICES / COMMODITIES
S+P: 2272
Res  2278  2290  2300
Sup  2264  2250  2240
DJI: 19911
Res  20000  20200  20100
Sup  19800  19700  19600
ASX SPI: 5581
Res  5592  5600  5640
Sup  5570  5540  5510
GOLD: 1156
Res  1170  1180  1188
Sup  1150  1140  1130
SILVER: 16.87
Res  17.00  17.25  17.55
Sup  16.75  16.50  16.15
OIL (WTI): 52.89
Res  53.50  54.45  55.00
Sup  51.65  51.00  50.00

 

Indices/commodities
S&P Futures 2272

Another day, another all time high (2278)!

Given the positive look of the daily momentum indicators though further gains seem possible, but where technical levels will be tricky to find although a move 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. Keep stops tight as it could be a case of buy the rumour – sell the fact, once the FOMC result is known. I am actually not sure that this will be the case and suspect the current rally will continue into the New Year, but would be squaring up after that as the markets could take a sharp turn lower once the reality of the Trump administration taking over the helm, in January, looms into focus.

24 Hour: Neutral

Medium term: Neutral

 

                                         Resistance Support
2280 Minor 2240 Minor
2275 Minor 2235 Minor
2277 All-time high/Session high 2230 Minor
2265 Minor 2225 Minor
2260 Minor 2220 Minor
DJI Futures 19911

Ditto S+P. Up to 19956 today! Next stop 20,000!

24 Hour: Neutral

Medium term: Neutral

 

Resistance Support
23000 Minor 19800 Minor
22000 Minor 19700 Minor.
21000 Minor 19600 Minor
20000 Minor 19500 Minor.
19956 All-time high/Session high 19400 Minor
ASX SPI 5581

The ASX had a choppy session (5541/5591), unable, so far, to overcome the 5600 although it is not so far away.

Given the positive look of the daily /weekly momentum indicators, 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 the session low (5541), 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) 5570 Minor
5671 Aug 2015 high 5541 Session low
5540 Minor 5510 Minor
5600 Minor 5473 Minor
5591 Session high 5450 (23.6% of 5029/5681)
GOLD 1156

Gold has had a rangebound session (1155/1165) leaving the outlook unchanged

The shorter term momentum indicators now look slightly more supportive and if correct, a squeeze to the topside, beyond the session high, 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 going into today’s FOMC Meeting. With the dollar looking as though it may face some downside pressure, Gold could enjoy a squeeze to the topside although further out, with the dollar strength possibly looking to resume going 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 12 Dec 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 /12 Dec high 1108 28 Jan low
SILVER 16.87

Silver has had a rangebound session (16.76/17.15) leaving the outlook unchanged although it is closing towards the lows and looking a little heavy.

If so, then below the 12 Dec 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, above the session high (17.15), 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. A cautious stance is required today and I would be leaving it until after the FOMC to make the next move.

24 Hour: Prefer to sell rallies

Medium term: Neutral

 

Resistance Support
17.75 200 DMA 16.76 Session low
17.57 (50% of 18.98/16. 17) 16.67 12 Dec 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 12 Dec high 16.16 25 Nov Low/23 Nov low
OIL (WTI) 52.89

Oil prices traded sideways on Tuesday as investors squared up ahead of the FOMC, following the rally that has seen prices hit levels last seen in mid-2015 brought about by the OPEC deal scale back output.

A cautious stance is required today, ahead of the FOMC Meeting, although the momentum indicators do seem to be aligning to point higher where, above the session high (53.38), the initial resistance will be at the 54.48 12 Dec 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 52.00 and 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 below here 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) 52.32 Session low
56.00 Minor 51.63 9 Dec high-Chart Gap
55.00 Minor 51.10 H/S neckline
54.48 12 Dec high 50.00 Psychological
54.00 Minor 49.58 8 Dec low

EURUSD: 1.0618

€/Usd has traded sideways within a 1.0603/1.0666 range today. Leaving the outlook unchanged ahead of the FOMC Meeting, due late in the coming session.

On the downside, back below 1.0600 would allow a retest of the 12 Dec 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 the 200HMA/session high at 1.0665, above which could see a run back to 1.0700 and possibly to 1.0740.

With the momentum indicators for the Euro aligning to look mildly constructive I am not sure that I would want to be too long of dollars heading into the FOMC, as we could see some pretty sharp profit taking if Janet Yellen is overly cautious and suggests that there is only going to be one rate hike. In the longer term though, looking to sell into Euro strength seems to be the plan heading into 2017 as I suspect the dollar’s strength will resume at some stage, with the Euro coming under increasing pressure of its own. I would be leaving it for the noise to die down after the FOMC announcement before doing anything.

24 Hour: Mildly bullish

Medium term: Prefer to sell rallies

 

Resistance Support
1.0873 8 Dec high 1.0603 Session low
1.0790 (76.4 of 1.0873/1.0525) 1.0570 Minor
1.0738 (61.8 of 1.0873/1.0525) 1.0524 12 Dec low
1.0700 (50% pivot of 1.0873/1.0525) 1.0504 5 Dec low
1.0666 Session high/200 HMA 1.0461 March 2015 low

Economic data highlights will include:

EU Non-Monetary Policy Meeting, US Retail Sales, Capacity Utilisation, Industrial Production, PPI, FOMC Meeting/IR Decision Meeting, Forward Projections, Interest Rate Decision, Press Conference

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 115.26

US$Jpy has traded a range of 114.73/115.47 while waiting on the FOMC outcome although it has been notable that the pair was unable to make higher ground despite the surge in the stockmarkets.

The technical picture remains unchanged, and back below 115.00, support will be seen at 114.70/80 but below which there is not too much ahead of 9 Dec’s low of 114.00.  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). A cautious stance is required although the daily charts still suggest that the risk is to the downside. Wait for the FOMC to find out. The Tankan is due in Asian trade and may cause some interim volatility but I suspect the dollar will not move too far from 115 until the US  data late in the session.

24 Hour: Neutral

Medium term: Neutral

 

Resistance Support
116.50 Minor 114.72 Session low /Rising trend support
116.11 12 Dec high 114.50 Minor
116.00 Minor 114.30 200 HMA
115.85 Minor 113.80 Minor
115.47/50 Session high -(61.8% of 125.85/98.94)/Weekly cloud top 113.11 8 Dec low

Economic data highlights will include:

Tankan (Q3), Industrial Production, Capacity Utilisation

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2662

The UK CPI saw Cable head up to 1.2725, although those gains have since been given back and we are where we were this time yesterday.

The daily and 4 hour charts both look fairly flat so a cautious stance is required ahead of the FOMC Meeting  but in the longer term, 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 1.2550. Under there could bring about further weakness, taking Cable back to 1.2400/10 so keep stops tight below 1.2500.  On the topside, back above 1.2700  and the session high 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 UK unemployment data.

24 Hour: Neutral

Medium term: Prefer to buy dips

 

Resistance Support
1.2800 Minor 1.2658 Session low
1.2785 100 DMA 1.2645 200 HMA
1.2774 6 Dec high 1.2600 Minor
1.2750 Minor 1.2566 12 Dec low
1.2727 Session high 1.2552/48 9 Dec low /(23.6% of 1.1821/1.2774)/Rising trend support

Economic data highlights will include:

UK Unemployment, Claimant Count

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0128

US$Chf has traded a tight 1.0100/1.0145 range.

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. The dailies also seem to be suggesting that we could see slightly lower levels ahead.

24 Hour: Neutral

Medium term: Neutral

                                                                

Resistance Support
1.0255 22 Nov high 1.0100 Session low
1.0223 2 Feb high 1.0092 (61.8% of 1.0018/1.0213)
1.0213 9 Dec high 1.0065 7 Dec low
1.0185 Minor 1.0052  (23.6% of 0.9548/1.0213)
1.0145 Session high 1.0000 Psychological

Economic data highlights will include:

ZEW Expectations

Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7493

The Aud has had a rangebound session, either side of 0.7500 (0.7475/0.7522) leaving the outlook unchanged.

Technically, the daily momentum indicators again appear to be tilted towards slightly higher levels and we could see another run towards 0.7520, which should again be strong resistance (200 DMA) but above which would then open the way to 0.7540 and perhaps to 0.7570 or even 0.7600, although 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.the session low (0.7472), ahead of the 12 Dec 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.  A neutral stance seems wise ahead of today’s Fed meeting, but it does look as though the Aud might squeeze a bit higher. Further out though, I still prefer to look for levels to sell into, given the potential for diverging monetary policy between the RBA/Fed.

24 Hour: Neutral

Medium term: Prefer to sell rallies .

 

Resistance Support
0.7625 11 Nov low 0.7475 Session low
0.7600 (61.8% of 0.7777/0.7310) 0.7430 12 Dec low
0.7570 16 Nov high/100 DMA 0.7415/11 7 Dec low/5 Dec low
0.7542 50% pivot of 0.7777/0.7310 0.7400 2 Dec Low
0.7522 200 DMA/Session high 0.7363/61 24 Nov low/22 Nov low

Economic data highlights will include:

WBC Consumer Confidence, New Motor Vehicle Sales

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7197

As with the Aud, there is no keeping the kiwi down as it made a 1 month high today at 0.7230, before drifting back to sit at 0.7200 by the end of the session. We will now await the FOMC but with the daily momentum indicators still looking mildly constructive we could yet see a run towards 0.7300. For the coming session, bids will be seen at the 0.7180 low and at 0.7150, while thee 12 Dec low of 0.7115 currently looks pretty safe but, below which 0.0.7090/0.7100 would provide further support.

On the topside, minor resistance will again be seen at 0.7236, which should be strong, but above which there is little to stop the Kiwi running up to 0.7300 and to the descending trend resistance at 0.7335.

24 Hour: Neutral

Medium term: Prefer to sell rallies

 

Resistance Support
0.7325 Minor 0.7180 Session low
0.7300 (76.4% of 7400/0.6983) 0.7150 Minor
0.7270 Minor 0.7115 12 Dec low
0.7236 (61.8% of 0.7400/0.6983) 0.7090 Minor
0.7231 Session high 0.7068 5 Dec low
Meta Trader
NZDUSD: 4 Hour

nzd

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