16 Nov: Strong US Retail Sales underpin the dollar. Gbp bounces on news of a possible Brexit delay.

By | November 16, 2016

The US$ has retained its positive momentum in the US session following the upbeat release of the October US retail sales, which rose by 0.8% versus expectation of 0.5%. The ex-auto sales rose 0.8%, also above expectation of 0.6%. In other positive news from the US, the NY Empire state manufacturing index rose to 1.5 in November, above expectation of -1.  The DXY has broken above 100.00 and is now not too far away from the Dec 2015 high of 100.51. Late news that Brexit may be delayed for 2 years saw a spike higher in Cable towards the end of the US session.

Wednesday kicks off with the NZ Q3 Retail Sales and the Australian Wage Price Index and New Motor Vehicle Sales. It then all goes rather quiet until the release of the UK Unemployment data and then again until we get the US PPI, Industrial Production, Capacity Utilisation and NAHB Housing Market Index. The Fed’s Bullard will be speaking in the European time zone and then later in the day the Fed’s Harker will also be speaking. Watch out for further UK news on Brexit once London opens, which may cause further gyrations in Cable

CURRENCIES
EURUSD: 1.0722
Res  1.0775  1.0815  1.0845
Sup  1.0710  1.0660  1.0600
USDJPY: 109.27
Res  109.55  110.00  110.65
Sup  108.80  108.55  108.20
GBPUSD: 1.2462
Res  1.2515  1.2555  1.2600
Sup  1.2450  1.2415  1.2380
USDCHF: 1.0016
Res  1.0025  1.0055  1.0080
Sup  0.9990  0.9930  0.9960
AUDUSD: 0.7553
Res  0.7565  0.7580  0.7600
Sup  0.7525  0.7500  0.7475
NZDUSD: 0.7093
Res  0.7120  0.7140  0.7160
Sup  0.7065  0.7035  0.7010
INDICES / COMMODITIES
S+P: 2175
Res  2180  2190  2200
Sup  2160  2150  2140
DJI: 18845
Res  18920  19000  19050
Sup  18760  18680  18570
ASX SPI: 5342
Res  5356  5370  5402
Sup  5320  5300  5280
GOLD: 1224
Res  1232  1240  1250
Sup  1210  1200  1190
SILVER: 17.03
Res  17.15  17.30  17.50
Sup  16.85  16.65  16.55
OIL (WTI): 45.74
Res  46.00  47.15  48.40
Sup  45.05  44.50  43.90

 

Indices/commodities
S&P Futures 2175
Resistance Support
2210 Minor 2152 14 Nov low
2200 Psychological 2148/44/40 11 Nov high low/(23.6% of 2028/2180)/100 DMA
2191 All time high (23 Aug) 2130 Minor
2180 10 Nov high 2122 (38.2% of 2028/2180)
2174 14 Nov high 2105 (50% of 2028/2180)

Bias

US Stocks have had an sideways day, trading a 2158/75 range, leaving the outlook unchanged.

The 4 hour charts have turned lower and suggest that the upside may be a little limited in the short term and could bring about another test of the session lows, below which decent support lies in the 2145/50 area, but a break of which would then open the way towards 2120. The dailies though still maintain a degree of positive momentum and thus it is not out of the question that we do head above the recent 2180 high and on towards the all time high of 2191. All up, a cautious stance is still required, but given the look of the dailies buying near term dips seems to be the longer term plan.sp

24 Hour: Neutral

Medium Term: Prefer to buy dips

DJI Futures 18845
Resistance Support
19300 Minor 18755 Session low
19200 Minor 18682 11 Nov low
19100 Minor 18565 (23.6% of 17417/18916)
19000 Minor 18390 Minor
18916 14 Nov high /All time high 18340 (38.2% of 17417/18916)

Bias

Ditto S+P. As with the S+P, the 4 hour momentum indicators have turned to point lower, so further near-term upside potential looks limited, although the dailies remain positive and buying dips towards the previous high at 18620 seems to be the plan.dji

24 Hour: Neutral

Medium Term: Prefer to buy dips

ASX SPI 5342
Resistance Support
5435 (76.4% of 5568/5029) 5306 Session low
5400 Minor 5290 (23.6% of 5029/5370)
5375/77 100 DMA/(76.4% of 5488/5029) 5270 10 Nov high low
5369/70 11 Nov high, 10 Nov high /Descending trend resistance 5250 Minor
5356/52 14 Nov high /Descending trend resistance 5235 200 HMA

Bias

The ASX has had a sideways session as it consolidates below the rising trend support, now at 5350. As before, while the 4 hour momentum indicators now appear to be running out of steam on the topside, the daily indicators still look constructive, so if the 5350/70 resistance can be taken out, a quick move to 5400+ may be on the cards.  For the next session or two I still prefer to be cautiously long, looking to buy dips but with a tight stop placed below 5300. Further out, with the weeklies still pointing lower, I also like to look for rallies towards 5435 to sell into although that may be a stretch too far.spi

24 Hour: Neutral

Medium Term: Mildly bullish

GOLD 1224
Resistance Support
1259 (38.2% of 1337/1212) 1212 14 Nov low
1250 Minor 1210 (50% pivot of 1040/1375)
1241 (23.6% of 1337/1212) 1200 31 May low
1235 Minor 1190 16 Feb low
1231 14 Nov high/Session high 1170 (61.8% of 1040/1375)

Bias

Gold has had a sideways session (1219/31) and it could be a similar theme again today given the mixed outlook from the 4 hour/daily momentum indicators.The shorter term charts are recovering after having become oversold and suggest the chance of a near term squeeze to the topside, but with the dailies pointing lower, further declines look to be in store in the days ahead. Support levels are layered at 10 dollar increments down to 1170 so any downside progress, if seen, may be slow. The topside will again find offers at 1130/35 and then at 1145/50 although this is beginning to look over the horizon.gold

24 Hour: Neutral

Medium Term: Mildly bearish

SILVER 17.03
Resistance Support
18.10 (61.8% of 18.98/16.63) 16.63 14 Nov low
17.80 (50% of 18.98/16.63) 16.48 (61.8% of 13.64/21.13)
17.55 200 DMA (38.2% of 18.98/16.63) 16.23 7 June low
17.20 (23.6% of 18.98/16.63) 16.00 Minor
17.13 Session high 15.81 1 June low

Bias

Silver squeezed back above 17.00 on Tuesday, reaching a high of 17.13, allowing the short term momentum indicators to correct themselves after having become oversold. With the 4 hour chart looking more positive, a move above the session high could now bring about a move towards 17.50. The dailies still point lower though, and a failure at current levels could see a return to the 16.71 session low, below which would find some decent support at 16.50. Below there, there is not too much support to be seen until 15.80/16.00. Given that the dailies appear to be picking up downside momentum, selling into rallies seems to be the plan.silver

24 Hour: Neutral

Medium Term:  Mildly bearish

OIL (WTI) 45.74
Resistance Support
48.40 (61.8% of 52.19/42.18) 45.05 (23.6% of 42.18/45.95)
47.17 (50% of 52.19/42.18) 44.50 200 HMA (38.2% of 42.18/45.95)
46.40 Minor 44.18 100 HMA
46.00 (38.2% of 52.19/42.18)/100 DMA 43.90 200 DMA
45.95 Session high 43.60 (61.8% of 42.18/45.95)

Bias

Oil prices jumped by 5% on Tuesday, on renewed expectations that OPEC will agree to cut production at the 30 November meeting in order to reduce the supply glut that has weighed on prices.

Having now traded back up to a high of 45.95, the 4 hour/daily momentum indicators do seem to have aligned to point higher and a run above the 100 DMA at 46.00 could lead to a larger squeeze towards 47.15 and even back to 48.40. Buying dips now seems favoured, with the initial support seen at 45.00 ahead of 44.50 and then the 200 DMA at 43.90.wti

24 Hour: Mildly bullish

Medium Term: Mildly bullish


EURUSD: 1.0722
Resistance Support
1.0900 Minor 1.0710/08 5 Jan low/14 Nov low
1.0840/45 14 Nov high /(23.6% of 1.1282/1.0708) 1.0660 Minor
1.0816 Session high 1.0600 Minor
1.0790 Minor 1.0585 Major rising trend support
1.0770 Minor 1.0522 3 Dec 2015 low

Bias                                                                                         

The Euro did reach the 1.0800 sell area, climbing to a high of 1.0818, although the strength quickly reversed following the release of the stronger than expected US Retail Sales and we are now back near the lows, after the dollar found renewed strength, and currently sit above the strong support seen at 1.0710. Although the 4 hour momentum indicators are oversold and appear to be trying to turn higher, further downside looks likely in the days ahead where the next realistic target would now be at the rising trend support at 1.0585, a break of which would head to the Dec low at 1.0522 and then possibly to the March 2013 low at 1.0461. We could yet see another bounce to 1.0800/40, although it may take an effort to reach it again today given the comparative lack of major data, and with the Fed speakers likely to underline their views that a December rate hike would be appropriate. Trading from the short side and selling into rallies, with a SL above 1.0850 seems to be the plan again today.

24 Hour: Becoming Oversold -Prefer to sell rallies

Medium Term: Bearish

Economic data highlights will include:

EU Non MP Meeting, Feds Bullard Speech, US PPI, Industrial Production, Capacity Utilisation, NAHB Housing Market Index, Feds Harker Speech

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 109.27
Resistance Support
110.65 Minor 108.55 Minor
110.00 Psychological 108.20 55/200 WMAs
109.80 Minor 107.90 Minor
109.58 3 June high 107.76 Session low
109.31 Session high 107.35 Minor

Bias

US$Jpy headed sharply higher following the release of the US Retail Sales, breaching 109.00 and is currently sitting at the day’s highs heading into the NY close.

As we said yesterday, from this level there is not an awful lot to stop it heading to 110.00 and beyond there to 111.25 (50% pivot of 123.66/98.94) although that remains over the horizon at this stage, and with the hourly charts now showing some bearish divergence and the 4 hour charts being extremely overbought, some caution is warranted on the topside. The dailies do point higher though, so looking to buy dips is the preferred play, where minor support is now found at around 108.20 and then again at 107.80, with the first Fibo level not seen until 107.20.

24 Hour: Becoming Overbought – Prefer to buy dips Medium Term:  Bullish
Meta Trader
USDJPY: 4 Hour

yenyen-1


GBPUSD: 1.2462
Resistance Support
1.2605 (76.4% of 1.2673/1.2380) 1.2415 Minor
1.2560/65 (61.8% of 1.2673/1.2380)/200 HMA 1.2380 Session low
1.2525 (50% pivot of 1.2673/1.2380) 1.2350 (38.2% of 1.1821/1.2673)/Rising trend support
1.2490 (38.2% of 1.2673/1.2380) 1.23525 Minor
1.2450 (23.6% of 1.2673/1.2380) 1.2300 Minor

Bias                                                                         

Cable continued its downtrend on Tuesday in reaching a session low of 1.2380, not assisted by a  leaked report saying that the Government still has no plans for Brexit in place or by the softer than expected inflation data (+0.1% v exp +0.3%). It then found a mildly bid tone before jumping sharply in late US trade after UK Sky news reported that Brexit may be delayed for 2 years, reaching above 1.2500 before slipping back to 1.2470.

For the time being I still prefer to structurally buy dips given that the daily momentum indicators remain positive, although in the near term the 4 hour charts do suggest that we could see a retest of the session lows, where I would be looking to add to longs, with a SL placed under 1.2350. The topside may struggle to break above the 14 Nov high of 1.2592 in the short term, although if wrong we could then see a return to 11 Nov top at 1.2673, above which there is little technical resistance until we see 1.2800. For now, a range of 1.2400/1.2550 would seem to have it covered, but keep an eye out for the UK Unemployment data and further UK Brexit headlines.

24 Hour: Neutral Medium Term:  Mildly bullish

Economic data highlights will include:

UK Unemployment

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0016
Resistance Support
1.0180 Minor 0.9960 Minor
1.0117 (76.4% of 1.0327/0.9443) 0.9928 Session low
1.0092 10 Mar high 0.9910 (23.6% of 0.9548/1.001)
1.0080 Descending trend resistance 0.9885 Minor
1.0022 Session high 0.9865 Minor

Bias                                                                                                                               

US$Chf has at last broken above parity and at this stage is holding its ground, trading at session highs of 1.0020. The dailies have turned higher and now hint that we could head towards the descending trend resistance at 1.0080, above which could head on towards 1.0120. On the downside 0.9950/60 will provide minor support ahead of 0.9910, which, if seen would be a buying area, with a SL placed under 0.9875.

24 Hour: Prefer to buy dips

Medium Term: Mildly Bullish

Economic data highlights will include:

ZEW Expectations

Meta Trader
USDCHF: 4 Hour

chfchf


AUDUSD: 0.7553
Resistance Support
0.7650 (50% of 0.7777/0.7525) 0.7511 Session low
0.7621 (38.2% of 0.7777/0.7525) 0.7505 13 Oct low/200 DMA
0.7600 Minor 0.7495 100 WMA
0.7585/90 (23.6% of 0.7777/0.7525)/100 DMA 0.7470 Minor
0.7570 Minor 0.7441 13 Sept low

Bias

The Aud has had another choppy session trading within a 0.7511/80 range before finished the day roughly in the middle, leaving the outlook unchanged. The dailies still point mildly lower so I prefer to remain structurally short, and if we do see a break of the session low, then we are likely to see a  more severe test of 0.7500, below which would hint at a move to 0.7470 and possibly to 0.7440. As with yesterday, selling into short term strength seems to be the plan, where resistance will again be seen at 0.7560/85, with SL to be left above the 200 DMA. As I said on Monday, note that the Aud does seem to be breaking below the rising trend support that has contained the price action over the last few months, and if we do break sub 0.7500, we could see an acceleration lower.

24 Hour: Mildly bearish -Prefer to sell rallies.

Medium Term:  Mildly bearish

Economic data highlights will include:

New Motor Vehicle Sales, Wage Price Index

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7093
Resistance Support
0.7205 100 DMA 0.7070/69 Session low/14 Nov low
0.7195 (38.2% of 0.7401/0.7070) 0.7060 Head/Shoulder neckline
0.7158 (23.6% of 0.7401/0.0.7070) 0.7035 13 Oct low
0.7140 14 Nov high 0.7015 200 DMA
0.7110 Minor 0.7000 Minor

Bias

After a squeeze up to 0.7141 earlier in the session the Kiwi is now just above the lows of 0.7070, not helped by the generally firm US$ or by the Global Dairy Trade price auction, where prices rose by 4.5%,  against estimates for a 5-7% increase. The downside will continue to  find decent bids at 0.7070, but note that in the longer term, the Kiwi could be building a decent sized head/shoulder formation, with a neckline at 0.7060, which is now perilously close, and if broken would have an objective at 0.6570. On the topside, sellers will now arrive at 0.7100/10 and then again at the session high of 0.7141, which if seen would again be a sell area with a SL placed above 0.7160.

24 Hour: Mildly bearish

Medium Term: Mildly bearish

Economic data highlights will include:

Retail Sales

Meta Trader
NZDUSD: 4 Hour

nzdnzd1