16 Feb: US$ reverses early gains after some mixed data. Stocks again at all time highs. Australian jobs data coming up.

By | February 16, 2017
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The US$ has ended mixed, while stocks are once again at new all time highs following some strong economic data from the US. The CPI rose 0.6% mm, 2.5% yy in January (the biggest gain in 4 years), beating expectations of 0.3% mm and 2.3% yy, while the retail sales rose 0.4% in January versus expectation of 0.1% and the Ex-auto sales rose 0.8% versus expectation of 0.4%. In other US data, the Empire state manufacturing index also jumped strongly, to 18.7, up from 6.5 and beat expectation of 7. It wasn’t all positive though and some flat wages growth data and soft industrial production figures saw a late selloff in the dollar, which gave up all its earlier gains. Janet Yellen wrapped up her testimony to Congress, adding nothing new although a March rate hike does appear to be on the table. Earlier on the session, the UK unemployment rate was unchanged at 4.8%, although the claimant count fell be 42k; much improved on expectations of +1k, while average wage growth was below expectations.

Thursday will get under way with the NZ Business PMI and the Australian Unemployment report (exp 5.8%, +10k, PR 64.7%). Later on from the EU, the focus will be on the ECB Minutes, while from the US we get the Building Permits, Housing Starts, Jobless Claims and the Philadelphia Fed Mfg Survey.

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EURUSD: While the US CPI and Retail Sales headlines beat expectations, sending the dollar higher, wage growth was flat, which might encourage the Fed to wait before raising rates, taking the wind out of the dollar’s rally. The US industrial production figures then missed expectations which, combined with the wages outcome, has put rather a dent in the dollar at the end of the day, with the possibility of further near term losses.

USDJPY: The dollar spiked higher on the US data before falling sharply, triggering stops, ahead of some hawkish Fed talk which inspired a minor rally, back to the middle of the recent range.

GBPUSD: The UK claimant count dropped sharply by -42.4k in January, much better than expectation of 1k rise, while the unemployment rate was unchanged at 4.8% in December, as expected. Cable traded lower though, due to the soft average weekly earnings, which slowed to 2.6% versus expectation of 2.8%. The US$ selloff has seen a bounce back to previous levels.

AUDUSD: It was a rocky ride for the Aud, but which has seen it close at 3 month highs ahead of today’s jobs data.

NZDUSD: The Kiwi fell sharply, but held on above key support following the US data release and then bounced sharply, with further gains looking possible. NZ Business PMI coming up.

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STOCKS: Another day means more all time highs for US stocks – more to come?!

METALS: Rangebound

OIL: Rangebound

CURRENCIES
EURUSD: 1.0591
Res  1.0610  1.0635  1.0660
Sup  1.0560  1.0520  1.0500
USDJPY: 114.22
Res  114.50  114.75  114.95
Sup  114.00  113.85  113.65
GBPUSD: 1.2448
Res  1.2480  1.2500  1.2525
Sup  1.2400  1.2380  1.2345
USDCHF: 1.0063
Res  1.0085  1.0120  1.0135
Sup  1.0045  1.0030  1.0010
AUDUSD: 0.7704
Res  0.7725  0.7750  0.7775
Sup  0.7675  0.7650  0.7620
NZDUSD: 0.7214
Res  0.7225  0.7255  0.7280
Sup  0.7200  0.7180  0.7145
INDICES / COMMODITIES
S+P: 2349
Res  2350  2360  2370
Sup  2340  2330  2320
DJI: 20590
Res  20600  20650  20700
Sup  20535  20465  20395
ASX SPI: 5764
Res  5764  5790  5814
Sup  5740  5728  5700
GOLD: 1232
Res  1236  1246  1256
Sup  1218  1210  1200
SILVER: 17.95
Res  18.05  18.20  18.45
Sup  17.75  17.55  17.45
OIL (WTI): 53.03
Res  53.50  53.90  54.30
Sup  52.70  52.35  51.20

 

Indices/commodities
S&P Futures 2349 Another day, another all time high.

As before, while the “Trump effect” continues it would appear that the rally will carry on but he needs to deliver on his promises or there will be a nasty accident. Until then further blue sky looks likely. Stand aside.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
2380 Minor 2331 Session low
2370 Minor 2320 14 Feb low
2360 Minor 2313 13 Feb low
2350 Minor 2300 Minor
2343 14 Feb high /All time high 2287 10 Feb low
DJI Futures 20590 Ditto S+P.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
20750 Minor 20466 Session low
20700 Minor 20344 14 Feb low
20650 Minor 20224 13 Feb low
20600 Minor 20100 Minor
20580 15 Feb high /All time high 20000 Minor
ASX SPI 5764 The ASX reached the next upside target of 5760 on Wednesday by trading up to  5764, settling nearby.

Although the 4 hour charts are overbought, the dailies are pointing higher so, as with yesterday’s stance, further rallies seem possible and above 5764 look for a run towards the 5789 9 Jan high, 5800 and then to the May 2015 high at 5814. The 4 hour charts still warn against being overconfident on the topside, and we could see some profit taking by longs, but as with yesterday, buying dips still seems the plan,  with a SL placed below today’s session low of 5729.

24 Hour: Prefer to buy dips Medium Term: Mildly bullish
Resistance Support
5814 May 2015 high 5740 Minor
5800 Minor 5729 Session low
5789 9 Jan high 5697 14 Feb low
5775 Minor 5675 Minor
5764 Session high 5650 Minor
GOLD 1232 Gold had a choppy session on the back of the move in the US$, initially falling hard to 1217 before a sharp squeeze higher to reach 1233

The short term momentum indicators are mixed, suggesting the chance of further 1220/35 trade, with support again being provided by the 100 DMA, although the dailies may be rolling over and a break to the downside could see us back at 1200. On the topside, above the recent highs (1234/37) would want to take another look at the 1244 trend high, which should be strong resistance, if we see it. If wrong, above here could see a run towards 1255 and 1265. A neutral stance seems best for now, but with a mild preference to sell into strength, with a SL placed above 1244.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1270 Minor 1216 Session low/100 DMA
1263 200 DMA 1207 3 Feb low
1255 (61.8% of 1337/1122) 1200/1198 100 WMA /2 Feb low
1244 200 WMA /10 Feb high 1188 30 Jan low
1234/37 14 Feb high/10 Feb high 1180 27 Jan low
SILVER 17.95 Silver was choppy (17.75/17.99)but stayed within its recent range, leaving the outlook unchanged.

The short term momentum and the daily indicators are all fairly neutral so a cautious stance is required although the dailies possibly remain mildly constructive, so if 18.00/05 can be overcome then we could see a move to 18.20 and to 18.45, above which could then see a quick move to 19.00. A stronger dollar  in the medium term would seem to create plenty of headwinds to such a move and could eventually place further pressure on the downside, where the initial support will again be seen at 17.75 and again at 17.50/55. For the time being, buying dips is mildly preferred, looking for another leg higher although I remain cautious because of the chance of another dollar rally. Keep stops tight below 17.75.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
18.98 10 Nov high 17.75 13 /14/15 Feb low
18.65 Minor 17.55 10 Feb 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)
18.00/08 200 WMA /14 Feb high 17.23 3 Feb low
OIL (WTI) 53.03 WTI has had a tight 52.71/53.49 range, leaving the outlook unchanged.

Currently sitting at 53.10 , pretty much unchanged from yesterday, the short term momentum indicators are flat and offer little hint in either direction, possibly suggesting a similar session ahead, using 53.00 as a pivot. Below Tuesday’s 52.71 low, the next support is seen at 52.23 (Feb 10 low) below which there is little to hold it up until we reach 51.29. On the topside, resistance will be seen at the 14 Feb high (53.69), the 13 Feb high (53.92) and again at 54.10/30. Above here seems unlikely today, but above which could see quite an acceleration towards 55.20. Beyond that there is again not too much to stop it heading to 56.90/57.00 although this is now a long way off. The dailies are neutral and further rangebound trade looks likely.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
56.90 (38.2% of 1.0765/26.03) 52.71 Session low
55.21 3 Jan high 52.34 10 Feb low
54.19/31 3 Feb high /6 Jan high 51.75 Minor
54.10 10 Feb high /6 Feb high 51.20 7 Feb low/9 Feb low
53.92 13 Feb high 50.70 10 Jan low

EURUSD: 1.0591

Having seen a run down to the Fibo support at 1.0525 (low 1.0520) the Euro has since turned higher, trading up to 1.0608 before closing out just below 1.0600. The short term charts now hint at the chance of the squeeze continuing, and with both the 1 and 4 hour momentum indicators pointing higher, a break of the session high would also take out the descending trend resistance and could see a run towards 1.0635, 1.0675 and even to 1.0700/10. The dailies still point lower though, and below 1.0520, which seems a little unlikely today, would allow a move to 1.0500 and there is not too much below their ahead of 1.0453. While mildly bullish today, selling into strength is still favoured

24 Hour: Mildly bullish -Prefer to sell rallies Medium Term: Mildly bearish
Resistance Support
1.0709/13 10 Feb high/9 Feb high 1.0560 Minor
1.0675 (50% of 1.0829/1.0520) 1.0525/20 (61.8% of 1.0340/1.0829) /Session low
1.0658 13 Feb high 1.0500 Minor
1.0633/36 14 Feb high/ (38.2% of 1.0829/1.0520) 1.0480 Minor
1.0608/05 Session high / Descending Trend Resistance 1.0455/53 (76.4% of 1.0340/1.0829)/ 11 Jan low

Economic data highlights will include:

German Wage Price Index, EU Monetary Policy Meeting  Minutes, US Building Permits, Jobless Claims, Philadelphia Fed Mfg Survey.

Meta Trader
EURUSD: 4 Hour


USDJPY: 114.22

US$Jpy reached 114.95  on the US CPI figure, before turning quite sharply lower, reaching 113.85, ahead of a late bounce, to finish at 114.20

The short term momentum indicators now point lower while the dailies still lean higher, so some caution is warranted today but buying dips remains the overall theme. On the topside, if 114.50 and then 114.95 are taken out there is little to stop the dollar heading on to 115.15/20, above which 115.60 would attract. On the downside the initial, minor support will again be seen at the 114.00 and then at the 113.85 session low, below which could see a run towards minor Fibo levels at 113.65 and even 113.25, although this looks unlikely to be seen today. Selling rallies with a tight SL above 115.00 seems the plan today although for a more structural view, buying any dip to around 113.50/70 seems a possibility.

24 Hour: Mildly bearish Medium Term: Mildly bullish
Resistance Support
115.61 19 Jan high 114.15 (23.6% of 111.58/114.95)
115.37 27 Jan high 114.00 Minor
115.13 (50% pivot of 118.66/111.61) 113.80 100 HMA
114.95 Session high 113.66 (38.2% of 111.58/114.95)
114.50 Minor 113.25 (50% pivot of 111.58/114.95)

Economic data highlights will include:

Foreign Bond/Stocks Investment.

Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2448

Sterling took out the stops lined up below 1.2440, falling hard to 1.2382 before bouncing to 1.2480, as the US$ came under some pressure, before closing just above the 1.2440 pivot.

Once again, the charts remain indecisive and more choppy trade looks likely on Thursday. From a technical perspective, the 1.2435/40 could continue to act as a pivot for a while, with minor downside support seen at 1.2400, ahead of the session low of 1.2382 and then 1.2345. On the topside, resistance will be seen at the session high (1.2480) and 1.2500, above which would open the way back towards the 1.2548 14 Feb high and on towards 1.2565 although the charts do not currently suggest that this is likely. Look for 1.2400/1.2500 to cover it today. There are easier trades out there.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.2565 (61.8% of 1.2706/1.2346) 1.2440 Daily cloud top/100 DMA/55 DMA
1.2548 14 Feb high 1.2400 Minor
1.2525 Minor 1.2382 Session low
1.2490 200 HMA 1.2365 Daily cloud base
1.2480 Session high 1.2345 Daily Kijun

.

Meta Trader
GBPUSD: 4 Hour


USDCHF: 1.0063

US$Chf made it up to 1.0118 on Wednesday but then reversed sharply and is finishing the day near the lows, at around 1.0060.

The short term momentum indicators look a little heavy, and on the downside, support will be seen at the 14 Feb low at 1.0030 and again in the 1.0010/20 area. Below parity would allow a run to 0.9970 although possibly not today. If seen though, buying dips towards into weakness again remains preferred, given that the dailies still look positive. Back above 1.0100/1.0120 would then allow a run toward 1.0150 and eventually towards 1.0200 although not yet. Buying dips near 1.0000 is preferred.

24 Hour: Mildly bearish  – Prefer to buy dips Medium Term: Mildly bullish
Resistance Support
1.0180 Minor 1.0050 Session low
1.0152 (61.8 % of 1.0335/ 0.9860) 1.0030 14 Feb low
1.0136 16 Jan high 1.0008/18 10 Feb low /13 Feb low
1.0118/21 Session high/19 Jan high 0.9970 Minor
1.0100 Minor 0.9930/35 9 Feb low/ 10 Feb low

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Meta Trader
USDCHF: 4 Hour


AUDUSD: 0.7704

The Aud had a roller-coaster ride in the US session falling hard, after the US data, to a low of 0.7636 before rocketing to a new 3 month high of 0.7715, closing the day at the highs.

The tops end of the recent range has now been taken out, it does appear that the Aud wants to move higher still so we could see a quick run to 0.7750, where the descending trend resistance will provide a strong cap, but above which could head to the early November high of 0.7777. Above there brings 0.7800 into view.

Back below 0.7700, the downside will see bids at 0.7675/80, 0.7650 and at the increasingly strong area below 0.7635.  As for today, the unemployment figure will largely decide the direction but it does appear that buying dips is the near term plan. There are easier trades elsewhere at present though.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
0.7800 Minor 0.7680 Minor
0.7777 8 Nov high 0.7650 200 HMA
0.7750 Descending trend resistance 0.7636 Session low
0.7725 Minor 0.7617 14 Feb low
0.7715 Session high 0.7605 7 Feb low

Economic data highlights will include:

Consumer Inflation Expectation, Unemployment (Jan).

Meta Trader
AUDUSD: 4 Hour


NZDUSD: 0.7214

The Kiwi has reversed a NY-data inspired fall to 0.7145 by squeezing sharply higher, to finish back above 0.7200.

The short term momentum indicators are now pointing higher, suggesting a continuation of the squeeze,  where targets would lie at 0.7225 and 0.7255. Above that brings 0.7280/0.7300 into view, but possibly not today. On the downside, the daily indicators remain bearish and so selling into near term strength is preferred. Minor support lies at 0.7200, at 0.7180 and at the session low of 0.7145. Below here looks unlikely today, but if wrong, look for a move towards the very strong support at 0.7120/15, and beyond that, to 0.7100.

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
Resistance Support
0.7300 Minor 0.7180 100 HMA
0.7282 (61.8% of 0.7375/0.7133) 0.7145 Session low
0.7255 (50% of 0.7375/0.7133) 0.7134 14 Feb low
0.7225 (38.2% of 0.7375/0.7133) 0.7120/15 200 DMA/100 DMA/55 DMA Converging/(50% of 0.6857/0.7375)
0.7220 Session high 0.7100 Minor

Economic data highlights will include:

Business PMI (Feb).

Meta Trader
NZDUSD: 4 Hour