2 Dec: US$ slips, Sterling higher; WTI too. NFP in focus and then on weekend political event risk (Italy/Austria).

By | December 2, 2016

The US$ and stocks are generally a little softer on Thursday as traders book some profits ahead of the US jobs data due later in the session. In the currency markets, Sterling in particular had a good session, on hopes of a “softer” Brexit while the commodity currencies are generally weak along with the Yen, despite the surge in oil prices following yesterday’s OPEC deal, with WTI adding a further 4% to yesterday’s 10% gains.

Friday is going to be mostly very quiet while waiting on the US employment report, where the expectations are for the NFP to rise by 175K, although following this week’s very strong ADP figure, we could see a surprise to the topside, in which case the dollar could soar in anticipation of a December Fed rate hike being a done deal. The headline unemployment rate is expected to be unchanged at 4.9%, while the Average Hourly Earnings are expected to rise by 0.3%. Australia will have the October Retail Sales (exp 0.3%) and could see some waves if too far from expectations.

Have a good weekend and don’t forget about the major political action taking place on Sunday, ahead of next Monday’s market opening. http://www.fxchartsdaily.com/dont-let-politics-interfere-good-trade-watch-euro-monday-fx-forex/

CURRENCIES
EURUSD: 1.0650
Res  1.0660  1.0685  1.0715
Sup  1.0615  1.0585  1.0550
USDJPY: 114.00
Res  114.60  114.80  115.25
Sup  113.80  113.50  113.05
GBPUSD: 1.2578
Res  1.2600  1.2650  1.2695
Sup  1.2535  1.2485  1.2425
USDCHF: 1.0113
Res  1.0140  1.0175  1.0205
Sup  1.0105  1.0050  1.0080
AUDUSD: 0.7415
Res  0.7430  0.7450  0.7480
Sup  0.7400  0.7380  0.7360
NZDUSD: 0.7080
Res  0.7100  0.7120  0.7135
Sup  0.7060  0.7045  0.7030
INDICES / COMMODITIES
S+P: 2187
Res  2200  2214  2220
Sup  2180  2170  2160
DJI: 19165
Res  19215  19250  19300
Sup  19100  19040  18990
ASX SPI: 5488
Res  5500  5514  5528
Sup  5470  5450  5430
GOLD: 1172
Res  1184  1192  1200
Sup  1160  1150  1140
SILVER: 16.52
Res  16.70  16.85  17.00
Sup  16.40  16.30  16.15
OIL (WTI): 50.82
Res  51.75  52.20  53.00
Sup  50.00  49.50  49.00

 

Indices/commodities
S&P Futures 2187
The S+P is lower today as profit taking set in ahead of the US employment figure, finishing towards the lows of 2186. With the dailies looking increasingly toppish, if we do head lower after the jobs report, support levels to watch will be at the 2196, 29 Nov low and then again at 2140/50 although it would have to be a very disappointing jobs report to see it back down here. On the topside, in the event of a strong number, resistance will arrive at 2213, above which we might expect the slow grind higher to continue, towards 2220.
24 Hour: Neutral Medium term: Neutral

 

Resistance Support
2225 Minor 2187 Session low
2220 Minor 2178 21 Nov low
2215 Minor 2169 (23.6% of 2028/2213)
2213 30 Nov high  / All time high 2160 Minor
2200 Minor 2150 Minor
DJI Futures 19165
As with the S+P, a neutral stance is required but given the look of the daily DJI chart, buying near term dips still seems to be the longer term plan as the slow creep higher appears set to continue. Note though that the dailies may be reaching a tipping point, so I would be keeping stops tight under 18900. Even better, square up ahead of the NFP and then go with the flow.
24 Hour: Neutral Medium term: Neutral

 

Resistance Support
19500 Minor 19099 30 Nov low
19400 Minor 19041 28 Nov low
19350 Minor 18973 23 Nov low
19300 Minor 18911 22 Nov low
19214 30 Nov high/All time high 18832 21 Nov low
ASX SPI 5488

 The SPI had another decent session, heading to a high of 5513 before finishing the day back below 5500. The momentum indicators generally look supportive although decent resistance lies ahead at the session high above which would meet the 5517, 28 Nov high and the 25 Nov high of 5527. Beyond there though, further gains will find little to stop the SPI heading on to the August high of 5568, which should be strong resistance but beyond which could see a run to 5600 and above, and then we could then see a run towards the August 2015 high at 5671.

On the downside, back below the session low of 5457 will once again see support at 5425/30, a break of which could see a run back to 5400, although this looks unlikely today. A range trade looks likely again today while waiting on the NFP figure, although given the constructive look of the longer term momentum indicators, buying into weakness still seems to be the plan.

24 Hour: Neutral Medium term: Neutral

 

Resistance Support
5568 1 August high 5465 200 HMA
5540 Minor 5457 Session low
5527 25 Nov high 5426 30 Nov low
5517 28 Nov high 5405 23 Nov low/ (23.6% of 5029/5527)
5513 Session high 5335 (38.2% of 5029/5527)
GOLD 1172

Gold again traded under pressure on Thursday, breaking below the 1170 support and heading to a low of 1161 before a bounce to finish the day back at 1170.

Today’s direction will depend on the strength of the dollar following the release of the US jobs data. A strong number is likely to keep Gold under pressure and if so we could see a quick return to the 1161 lows, below which we would find bids at 1155, but under here there is little to hold the price up until 1120. On the topside, resistance will be seen at 1180/85 and then again in the 1195/1200 area although this looks unlikely to be seen for a while. Given that the weeklies point lower I still prefer to trade strategically from the short side.

24 Hour: Prefer to sell rallies Medium term: Mildly bearish

 

Resistance Support
1220 (23.6% of 1375/1270) 1161 Session low
1210 (23.6% of 1337/1170)/200 HMA 1157 4 Feb low
1195/97 200 HMA/28 Nov high 1140 Minor
1185 100 HMA 1130 Minor
1180 Minor 1122 (76.4% of 1046/1375)
SILVER 16.52

Silver had a rangebound session (16.25/67) leaving the outlook unchanged.

Once again the short term momentum indicators are flat and the next move will come via the US jobs data. As we said before, it could be that Silver is building a minor reverse head/shoulder formation, with a neckline at 16.85, which if that were the case, would have an objective at around 17.50. If seen it would suggest a medium term sell opportunity although given the strength of the dollar it seems unlikely that this will come about. With that in mind, below today’s low of 16.25 could see a test of 16.00, beneath which would allow a run towards 15.80 and potentially to 15.40.  I still prefer to trade from the short side although an underperforming NFP figure would see the commodities rally sharply as the dollar heads lower.

24 Hour: Prefer to sell rallies Medium term: Prefer to sell rallies

 

Resistance Support
17.23 (38.2% of 18.98/16. 17)/16 Nov high 16.25 Session low
17.00 Minor 16.16 25 Nov Low/23 Nov low
16.85 (23.6% of 18.98/16. 17)/28 Nov high 16.00 Minor
16.76 30 Nov high 15.81 1 June low
16.67 Session high 15.50 Minor
OIL (WTI) 50.82

Oil prices again surged higher on Thursday by more than 4%, extending gains after OPEC and Russia agreed to restrict output to reduce the global supply glut.

Technically, WTI has now rallied sharply back to test the descending trend resistance at 5130,  reaching a high of 51.77 before closing back just under 51.00. As we said previously, the weekly charts do show the potential for a reverse head and shoulders, and a sustained break of the neckline at 51.30 would have an objective of 82.00! Don’t get excited, but worth keeping in the back of your mind. Nearer home, if we do head higher 52.20 would see sellers, beyond which the next level to watch would be at 53.50. A weekly close above 51.30 would build on the bullish outlook. On the downside, support will be seen at 50.00 and again at49.50. Buying dips now seems to be the plan, albeit cautiously.

24 Hour: Prefer to buy dips Medium term: Mildly bullish
Resistance Support
53.52 9 July 2015 high 50.40 Minor
53.00 Minor 50.00 Minor
52.19 19 Oct high 49.50 (23.6% of 42.19/51.77)
51.77 Session high 49.00 Minor
51.30 Descending trend resistance 48.10 (38.2% of 42.19/51.77)

EURUSD: 1.0650

The Euro has had another rangebound session, chopping around either side of 1.0600 as option expiries dominated the action, leaving the outlook unchanged. The generally upbeat US data (ISM Mfg PMI 53.2 vs exp 52.2) was ignored while traders await on today’s US employment data, with expectations of a rise in the NFP of 175K.

Technically, the short term charts remain neutral, while the dailies still appear to be trying to find a base although a strong NFP number will see the dollar resume its recent rally, keeping the Euro under pressure. With regards to the charts, on the topside, resistance will be seen at 1.0665, above which we could then head to the 1.0685 28 Nov high, a break of which would allow a run towards 1.0700/10 and possibly to 1.0745.

The downside will again see bids at the 1.0551, 30 Nov low, a break of which could head to the 1.0517 lows seen last Thursday, below which would eventually open the way to the March 2013 low at 1.0461. Under this, there is very little to hold the Euro up ahead of 1.0300 and then again, not a lot until we reach parity. The NFP will be the sole focus today, and until then it could day to catch up with the admin!

24 Hour: Prefer to sell rallies Medium term: Prefer to sell rallies
Resistance Support
1.0725 Minor 1.0600 200 HMA
1.0703/10 (23.6% of 1.1282/1.0517) /17 Nov high 1.0551 29 Nov low
1.0685 28 Nov high 1.0537 25 Nov Low
1.0666 30 Nov High 1.0517 24 Nov low/3 Dec 2015 low
1.0655 Session high 1.0462 March 2015 low

Economic data highlights will include:

EU PPI, US Jobs/NFP/Average Hourly Earnings data, ISM NY Index, Baker Hughes Oil Rig Count

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 114.00
US$Jpy retains its bid tone, with the Yen under pressure on all fronts, particularly today against Sterling which saw the cross rally from 142.60 to as high as 145.19, taking out the 200 DMA in the process for the first time since 3 Dec 2015. Against the dollar, the range has been a steadier 113.82/114.82, and currently sitting towards the lower end of that, the outlook is unchanged.

The daily charts do remain extremely overbought, so corrections seem inevitable, although buying dips remains the medium term theme, and a strong NFP reading today would likely see the dollar head higher still. If so, on the topside the 100 DMA at 114.60 will be the first hurdle ahead of the 114.82 session/trend high. Above there, there is little to stop the dollar heading on to 115.50/60, beyond which we could see a run towards 116.00 and even to 117.80 (76.4% of 121.05/98.94). On the downside, support will be seen at 113.80/90, below which the rising trend support comes in at 113.50. I would keep stops tight under there as there is then little support until 112.15.

Note the bearish divergence that is building in the 4 hour chart which could be an early warning of a correction but at the same time the weeklies are beginning to point strongly higher, so buying dips remains the overall theme.

24 Hour: Neutral – Possible awaiting a correction Medium term: Mildly bullish  –  Prefer to buy dips
Resistance Support
115.50 (61.8% of 125.85/98.94)/Weekly cloud top 113.82 Session low
115.25 Minor 113.50 Rising trend support
115.00 Minor 113.05 100 HMA
114.82 Session high 112.80 Minor
114.60 100 DMA 112.15 Minor

Economic data highlights will include:

Foreign Bond/Stocks Investment, Nikkei Mfg PMI

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2578

Sterling took off like a rocket after the UK Brexit minister hinted at EU market access post-Brexit, reaching a high of 1.2695, taking out the mid November high at 1.2673 in the process. Today’s direction will depend on the US employment data, and a strong reading would make it difficult for Sterling to build on its gains as the US$ head higher.

Technically, minor support is now seen at 1.2530, and then again at 1.2485 and at the rising trend support, now at 1.2425. A soft NFP outcome would allow Sterling to head back to the 1.2695 high, above which could see a run towards the 100 DMA at 1.2785 although that currently looks rather distant, albeit that the daily charts do appear to be building some positive momentum. Watch out for the UK Construction PMI today.

24 Hour: Neutral Medium term: Prefer to buy dips
Resistance Support
1.2785 100 DMA 1.2530 Minor
1.2725 Minor 1.2500 Minor
1.2695 Session high 1.2485 (23.6% of 1.1822/1.2695)
1.2650 Minor 1.2450 Minor
1.2600 Minor 1.2425 Rising trend support

Economic data highlights will include:

UK Construction PMI

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0113

US$Chf had another rangebound session (1.0104/1.0178) leaving the outlook unchanged.

The momentum indicators are fairly neutral now, but if the dollar does move higher, then above the session high, we could yet see a sterner test of 1.0200, beyond which could then head on to 1.0250 and to 1.0300/25 at some stage. Good buyers remain right here at 1.0100/10 although they are being heavily tested towards the end of the US session, below which could see a move back to 1.0050/60 and possibly to 1.0000. As we said before, with the weekly charts seemingly picking up steam we could be in for something much bigger going into 2017, with 1.0325 (Nov 2105 high) now coming into view, above which could see a run towards 1.0700 and feasibly to 1.1380 ((38.2% of 1.8309/0.7080). Buying dips remains preferred.

24 Hour: Prefer to buy dips Medium term: Prefer to buy dips                                                        
Resistance Support
1.0307 2 Dec  2015 high 1.0104 Session low
1.0255 29 Jan high 1.0078 28 Nov low
1.0223 2 Feb high 1.0060 18 Nov low
1.0204 30 Nov high 1.0048  (23.6% of 0.9548/1.0204)
1.0178 Session high 1.0000 Psychological
Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7415

The Aud has had a choppy session either side of 0.7400, but after bouncing off its 0.7369 low it is finishing the day at its highs, as the US$ comes under some minor profit taking pressure of its own, to finish the day  sitting right on the 200 HMA.

The momentum indicators today offer little hint in either direction and it looks like being a generally steady session ahead of tonight’s US employment figure, although the local Retail Sales could see some short term directional volatility (exp 0.3%mm). Back below 0.7400 could then head back to the support at 0.7360/70, below which could then see a move towards 0.7335 and then to 0.7300/10. On the topside, resistance will be seen at 0.7430 and again at 0.7450, both relatively minor levels, ahead of the 0.7495/0.7500 area but which looks unlikely to be seen again in the short term unless the NFP disappoints and sends the US$ lower. If the Aud were to break above 0.7500, there is then not too much to stop it heading on towards 0.7545/50.

24 Hour: Neutral 24 Hour: Prefer to sell rallies.
Resistance Support
0.7496 29 Nov high/30 Nov high 0.7369            Session low /30 Nov low
0.7480 Minor 0.7363/61 24 Nov low/22 Nov low
0.7450 100 HMA 0.7335 Weekly cloud base
0.7430 Minor 0.7310 21 Nov low
0.7419/22 Session high/200 HMA 0.7288/84 (76.4% of 0.7144/0.7834)/16 June low

Economic data highlights will include:

Retail Sales (Oct)

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7080

The Kiwi has had a choppy session in falling to a low of 0.7043 (200 DMA) following the strong US data before recovering later, as the US$ came under pressure, to finish the day at 0.7080, pretty much where it started.

The 4 hour/daily momentum indicators are mixed, with the dailies currently still looking mildly supportive although the 4 hour charts hint that we may yet see a retest of the lows, where the 200 DMA again propped it up today. Under there could then see another run towards 0.7000 and if the NFP is strong we could then continue towards 0.6970 and 0.6950. On the topside, resistance will again be seen at 0.7100 and then at 0.7135 and at 0.7150, both minor, ahead of the 30 Nov high of 0.7169.

24 Hour: Prefer to sell rallies Medium term: Prefer to sell rallies
Resistance Support
0.7185 (50% of 0.7400/0.6983) 0.7043 Session low
0.7170 Minor 0.7035/32 200 DMA
0.7159 30 Nov high 0.7000 Minor
0.7135 Minor 0.6971 24 Nov low
0.7100 Minor 0.6951 21 July low

Economic data highlights will include:

Building Permits

Meta Trader
NZDUSD: 4 Hour

nzd

The post 2 Dec: US$ slips, Sterling higher; WTI too. NFP in focus and then on weekend political event risk (Italy/Austria). appeared first on FX Charts Daily.