17 Nov: US$ still in demand ahead of a heavy day of data. EU/US CPI in focus.

By | November 17, 2016

The US$ is firm at the end of Wednesday trade although off its highs after the dollar index (DXY) briefly broke above the December 2015 high of 100.51  to make a 13 year high at 100.53. It is a little lower going into the US session  close, but a strong CPI reading due later today could be the catalyst to provide renewed momentum data to carry the dollar to new highs. As for the Wednesday session, the US PPI rose to 0.8% yy in October, missing expectations of 1.2%yy while the core figure was unchanged at 1.2% yy and also below expectation of 1.5% yy. Industrial production rose 0.0% in October while the Capacity Utilisation came in at 75.3% (vs exp of 75.5%). Stock markets were pretty much rangebound but are finishing the session towards their lows while oil was choppy after the surprisingly large increase in inventories was offset by the ongoing prospects of an OPEC agreement to cut production at the 30 Nov meeting.

The coming session will kick off with the release of the NZ Q3 Retail Sales, PPI and the NZ Financial Stability Report, to be followed by the Australian October Unemployment (exp 5.6%, +20K, PR:64.6%). From the UK we get the Oct Retail Sales (exp 0.4%mm, 5,3% yy; Ex-Fuel, exp 0.4%mm, 5.3%yy), the EU CPI (exp 0.3%mm, 0.5%yy) and the ECB Minutes, while from the US comes the October Building Permits (exp 1.2 mio), Housing Starts (exp 1.15 mio), Jobless Claims (exp 259K), CPI (exp 0.3% mm, 1.6% yy,  Ex Food Energy exp 0.2% mm, 2.2% yy) )and Philadelphia Fed Mfg Survey. It could be a busy day so stay nimble!.

CURRENCIES
EURUSD: 1.0686
Res  1.0720  1.0760  1.0790
Sup  1.0665  1.0630  1.0600
USDJPY: 109.10
Res  109.55  109.75  110.00
Sup  108.75  108.55  108.20
GBPUSD: 1.2442
Res  1.2470  1.2500  1.2525
Sup  1.2410  1.2380  1.2350
USDCHF: 1.0023
Res  1.0055  1.0080  1.0100
Sup  0.9990  0.9930  0.9960
AUDUSD: 0.7480
Res  0.7495  0.7510  0.7535
Sup  0.7460  0.7440  0.7420
NZDUSD: 0.7073
Res  0.7100  0.7115  0.7145
Sup  0.7060  0.7035  0.7015
INDICES / COMMODITIES
S+P: 2174
Res  2184  2190  2200
Sup  2160  2150  2140
DJI: 18851
Res  18920  19000  19050
Sup  18760  18680  18575
ASX SPI: 5309
Res  5324  5350  5370
Sup  5290  5270  5240
GOLD: 1226
Res  1234  1240  1250
Sup  1212  1200  1190
SILVER: 16.95
Res  17.10  17.25  17.45
Sup  16.85  16.65  16.55
OIL (WTI): 45.48
Res  46.00  46.40  47.20
Sup  45.00  44.20  43.90

 

Indices/commodities
S&P Futures 2174
Resistance Support
2210 Minor 2165 100 HMA
2205 Minor 2148 (23.6% of 2028/2184)/100 DMA
2200 Psychological 2142 200 HMA
2191 All time high (23 Aug) 2125 (38.2% of 2028/2184)
2184 Session high 2105 (50% of 2028/2184)

Bias

The S+P did briefly make a new trend high at 2184 on Wednesday but it is finishing on the day’s lows, albeit in a relatively tight range, leaving the outlook unchanged.

The 4 hour charts are heading lower and once again suggest that the upside may be a little limited in the short term and could bring about another test of 2160, below which decent support lies in the 2145/50 area, but a break of which would then open the way towards 2125. On the other hand, the dailies still look constructive and thus it is not out of the question that we do head above the 2184 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 in the 2140/50 area – if seen – seems to be the longer term plan.sp

24 Hour: Neutral

Medium Term: Prefer to buy dips

DJI Futures 18851
Resistance Support
19300 Minor 18792 Session low
19200 Minor 18755 15 Nov low
19100 Minor 18682 11 Nov low
19000 Minor 18560 (23.6% of 17417/18916)
18916 14 Nov high /All time high 18340 (38.2% of 17417/18916)

Bias

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 5309
Resistance Support
5400 Minor 5290/85 (23.6% of 5029/5370)/200 HMA
5375/80 (76.4% of 5488/5029)/100 DMA 5270/65 10 Nov high low/200 DMA
5369/70 11 Nov high, 10 Nov high 5240 (38.2% of 5029/5370)
5350/55 Descending trend resistance/  Session high 5220 Minor
5325 100 HMA 5200 (50% of 5029/5370)

Bias                

The ASX has struggled to overcome the descending trend resistance and has drifted a little lower, now back at 5300. As before, the 4 hour momentum indicators appear to have run out of steam on the topside and bow hint at a test of support in the 5270/90 area. On the other hand, the daily indicators still look mildly constructive, so if the 5350/70 resistance can be taken out, unlikely today unless the employment numbers are vastly improved, a quick move to 5400+ may be on the cards.  A cautious stance is required, although the near term momentum appears to be to the downside.spi

24 Hour: Cautiously bearish

Medium Term: Neutral

GOLD 1226
Resistance Support
1259 (38.2% of 1337/1212) 1220 Minor
1250 Minor 1212 14 Nov low
1241 (23.6% of 1337/1212) 1210 (50% pivot of 1040/1375)
1235 100 HMA 1200 31 May low
1233 Session high 1190 16 Feb low

Bias

Gold has traded sideways in $10 range, leaving the outlook unchanged.

The 4 hour momentum indicators are still 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 again at 1145/50 although this is beginning to look over the horizon.gold

24 Hour: Neutral

Medium Term: Mildly bearish

SILVER 16.95
Resistance Support
17.95 (38.2% of 20.06/16.63) 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
17.45 (23.6% of 20.06/16.63) 16.00 Minor
17.20/23 (23.6% of 18.98/16.63)/Session high 15.81 1 June low

Bias

As with Gold, Silver has traded a rangebound session either side of 17.00, leaving the outlook unchanged. After initially heading up to a high of 17.23, it then reversed and is finishing the day towards the lows, although not yet testing the lows seen earlier in the week at 16.63.   The 4 hour charts still look mildly positive as they unwind their previous oversold condition and further near term action at close to 17.00 would not surprise. A move above the 17.23 session high could bring about a move towards 17.45/55 although this looks unlikely today. The dailies still point lower though, and a failure here could see a return to the 16.63 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  – Prefer to sell rallies

Medium Term:  Mildly bearish

OIL (WTI) 45.48
Resistance Support
48.40 (61.8% of 52.19/42.18) 45. 02 Session low
47.70 Daily cloud top 44.75  (38.2% of 42.18/45.46.38)
47.17 (50% of 52.19/42.18) 44.27 (50% of 42.18/46.38)
46.38 Session high 43.90/80 200 DMA/ (61.8% of 42.18/46.38)
46.00 100 DMA 43.15 (76.4% of 42.18/46.38)

Bias

WTI was volatile on Wednesday, heading to the downside after the release of the weekly U.S. crude oil inventories, but then underpinned by the increasing hopes of a deal between OPEC members to limit production/supply at their upcoming meeting in Vienna on Nov 30.  With regards to the inventories, the U.S. Energy Information Administration reporting that stockpiles rose for the third consecutive week, increasing by 5.3 million barrels, compared with expectations for an increase of only 1.5 million.

Technically, having gyrated between 45.02 and 46.38, WTI is ending the day roughly in the middle of the range, with a cautious stance now required.  The 4 hour/daily momentum indicators still seem to have aligned to point higher and a sustained 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 still seems favoured, with the initial support once again to be seen at 45.00/44.70, a break of which could see a run back towards 44.50 and possibly to the stronger support at 43.90/80. If seen today, this would seem to be a decent buying level given the look of the longer term momentum indicators.wti

24 Hour: Mildly bullish

Medium Term: Mildly bullish


EURUSD: 1.0686
Resistance Support
1.0840/45 14 Nov high 1.0665 Session low
1.0816 (23.6% of 1.1282/1.0665) 1.0630 Minor
1.0790 100 HMA 1.0600 Minor
1.0758 Session high 1.0585 Major rising trend support
1.0720 Minor 1.0522 3 Dec 2015 low

Bias                                                                                         

General ongoing demand for the US$ kept the Euro under pressure all day, and once below 1.0710 stops were triggered, sending it to a low of 1.0665 before a dead-cat bounce heading into the close.

Although the 4 hour momentum indicators remain 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 see a bounce to 1.0720, where good sellers were seen in the US session, above which could then bring about a move towards the session high at 1.0758, although it may take an effort to reach it today unless the EU CPI surprises to the topside or the US CPI falls below expectations and takes the wind out of the dollar’s recent strength.Trading from the short side and selling into rallies, with a SL above 1.0815 seems to be the plan again today.

24 Hour: Becoming Oversold -Prefer to sell rallies

Medium Term: Bearish

Economic data highlights will include:

EU CPI, Construction Output, ECB Minutes, US Housing Starts, Building Permits, Jobless Claims, CPI, Philadelphia Fed Mfg Survey

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 109.10
Resistance Support
110.65 Minor 108.75 Minor
110.30 Minor 108.30 55/200 WMAs
110.00 Psychological 108.00 Minor
109.75 Session high 107.78 Session low

/(23.6% of 101.18/109.75)

109.55 Minor 107.35 Minor

Bias

US$Jpy reached a high of 109.75 on Wednesday although the soft US data put a brake on the dollar’s run and it is now a little lower, and with the 4 hour momentum indicators appearing to be rolling over we might have seen a short term top. Given the risk reward as we approach 110.00, trading from the short side over the next 24 hours, with a tight SL placed above the 110.00/20 area may be the way to go, with downside targets being at 108.30 and at around 108.00. In the longer term though the dailies still point higher, so longer term traders will be looking for dips to buy into. A decisive break of 110.00 sees little resistance until 111.25 (50% pivot of 123.66/98.94) although that remains over the horizon at this stage.

24 Hour: Becoming Overbought – Prefer to sell rallies

Medium Term:  Bullish

Economic data highlights will include:

Foreign Bond/Stocks Investment

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2442
Resistance Support
1.2605 (76.4% of 1.2673/1.2380) 1.2408 Session low
1.2560/65 (61.8% of 1.2673/1.2380)/200 HMA 1.2380 15 Nov low
1.2525 (50% pivot of 1.2673/1.2380) 1.2350 (38.2% of 1.1821/1.2673)/Rising trend support
1.2501 Session high 1.23525 Minor
1.2470 Minor 1.2300 Minor

Bias                                                                         

Cable had a choppy session on Wednesday confined to a 1.24/1.25 range. The short term momentum indicators are flat, hinting at more of the same in the session ahead and a neutral stance is required. Further out, I still mildly prefer to buy dips given that the daily momentum indicators remain positive (although they may be running out of steam), but with a SL placed under 1.2350 on all positions. The topside will today see sellers at 1.2500 and above there, should we see it, at the 14 Nov high of 1.2592.  For now, a range of 1.2380/1.2480 would seem to have it covered, but keep an eye out for today’s UK Retail Sales data.

24 Hour: Neutral

Medium Term:  Mildly bullish

Economic data highlights will include:

Retail Sales

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0023
Resistance Support
1.0180 Minor 0.9983 Session low
1.0117 (76.4% of 1.0327/0.9443) 0.9935 (23.6% of 0.9548/1.0057)
1.0092 10 Mar high 0.9910 Minor
1.0080 Descending trend resistance 0.9885 Minor
1.0057 Session high 0.9865 (38.2% of 0.9548/1.0057)

Bias                                                                                                                                Session

US$Chf made it up to a high of 1.0058 on Wednesday before dipping a little at the end of the session. The 4 hour/daily momentum indicators remain constructive and now hint that we could head towards the descending trend resistance at 1.0080, above which could head on towards 1.0120 and then possibly on towards 1.0250, albeit that this is a long way off right now. On the downside, back under parity,  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

Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7480
Resistance Support
0.7580/88 (38.2% of 0.7777/0.7549)/100 DMA 0.7460 Session low/(50% pivot of 0.7144/0.7777)
0.7550 100 HMA 0.7441 13 Sept low
0.7535 (23.6% of 0.7777/0.7459) 0.7420 27 July low
0.7510 200 DMA 0.7400 Minor
0.7490 100 WMA 0.7385 (61.8% of 0.7144/0.7777)

Bias

The Aud has slipped through the 0.7500 support area in heading to a low of 0.7460, not helped by the generally stronger US$ or by the sharp reversals in the price of iron ore/copper, before finding some stability to close at 0.7480, almost right on the 100 WMA..

The dailies seem to be picking up some downside momentum, so I prefer to remain structurally short, and if we do see a break of 0.7460 we could see a run towards 0.7440 and possibly to 0.7420, below which there is not much support until we reach 0.7385.  As with yesterday, selling into short term strength seems to be the plan, where resistance will now be seen at 0.7510/35, with SL to be left above 0.7580.  The Australian unemployment figure is expected to be a decent number today (+20K, PR 64.4%) but it is extremely volatile and normally causes a sharp gyration in the Aud. A failure to meet expectations could see a slide towards the July/Sept lows.

24 Hour: Mildly bearish -Prefer to sell rallies.

Medium Term:  Mildly bearish

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7073
Resistance Support
0.7205 100 DMA 0.7060 Head/Shoulder neckline
0.7175 (38.2% of 0.7401/0.7035) 0.7035 13 Oct low/Session low
0.7140 14 Nov high 0.7015 200 DMA
0.7120 (23.6% of 0.7401/0.7035) 0.7000 Minor
0.7113 Session high 0.6951 21 July low

Bias

The Kiwi remains under pressure due to the strength of the US$, and today fell below the supports seen at 0.7060/70, trading down to the next support at 0.7035 before a recovery, to finish the day back at 0.7070.

The downside will continue to  find decent bids at 0.7070/60, but as we said before, note that in the longer term, the Kiwi could be building a decent sized head/shoulder formation, with a neckline at 0.7060, which, if broken on a sustained basis would have an objective at 0.6570. If we see a trade below the 0.7035 double bottom, then we could be on our way although the 200 DMA at 0.7015 will provide decent support.  On the topside, sellers will again arrive at 0.7100/10 and then again at the Tuesday high of 0.7141, which if seen (doubtful) would again be a sell area with a SL placed above 0.7160. The Financial Stability Report may create some waves today as could the Retail Sales.

24 Hour: Mildly bearish

Medium Term: Mildly bearish

Economic data highlights will include:

RBNZ Financial Stability Report, Q3 PPI, Retail Sales (Oct)

Meta Trader
NZDUSD: 4 Hour

nzd