2 Nov: US$, Stocks hit by poll showing Trump in line with Clinton. FOMC coming up today

By | November 1, 2016

Both the US$ and stocks headed sharply lower on Tuesday , weighed down by the release of a poll showing that Trump now leads Clinton  as we head towards next week’s election. Also not helping was the weak US construction spending data, which unexpectedly fell in September and could lead to a mild downward revision to the third-quarter economic growth estimate. The Yen, Chf and the metals have been beneficiaries, all making strong gains on the back of safe-haven demand as traders remain cautious ahead of the upcoming FOMC and US Jobs data.

Wednesday gets off with bang with the release of the NZ Building Permits and the RBNZ Inflation Expectations. The ECB Non-Monetary Policy Meeting, EU Markit Manufacturing PMIs will be released later in European trade, ahead of the  US ADP Jobs data, the  ISM NY Index and the main event of the day, the FOMC decision, at which no one expects any change ahead of Friday’s NFP result and then next Tuesday’s US election. More exciting possibly, given the current volatility in the oil price, could be the EIA Crude Oil Stocks Weekly Change, although the focus will lie elsewhere.

CURRENCIES
EURUSD: 1.1055
Res  1.1070  1.1085  1.1115
Sup  1.1020  1.0985  1.0960
USDJPY: 104.07
Res  104.40  104.60  104.80
Sup  103.80  103.50  103.15
GBPUSD: 1.2241
Res  1.2280  1.2300  1.2330
Sup  1.2200  1.2150  1.2115
USDCHF: 0.9750
Res  0.9780  0.9800  0.9830
Sup  0.9725  0.9690  0.9650
AUDUSD: 0.7652
Res  0.7670  0.7690  0.7710
Sup  0.7640  0.7620  0.7600
NZDUSD: 0.7183
Res  0.7200  0.7220  0.7240
Sup  0.7150  0.7135  0.7110
INDICES / COMMODITIES
S+P: 2102
Res  2110  2120  2130
Sup  2090  2080  2066
DJI: 17925
Res  17975  18050  18110
Sup  17855  17790  17710
ASX SPI: 5225
Res  5250  5280  5300
Sup  5202  5184  5170
GOLD: 1287
Res  1292  1304  1316
Sup  1284  1274  1264
SILVER: 18.36
Res  18.50  18.70  18.90
Sup  18.15  18.00  17.80
OIL (WTI): 46.32
Res  47.30  48.00  49.00
Sup  45.75  45.00  43.95

 

Indices/commodities
S&P Futures 2102
Resistance Support
2144/49 Minor descending trend resistance/25 Oct high 2090 Session low
2139 100 DMA 2080 200 DMA
2130 31 Oct high /200 HMA 2066 6 July low
2115 (23.6% of 2191/2090) 2056 30 June low/100 DMA
2110 Minor 2050 Minor

Bias                                                                                                           

US stocks finally broke out of their choppy consolidation area with the S+P diving to a low of 2090 on the back of the US election poll showing Trump going head to head with Clinton, with weak construction spending data not helping the cause.

The S+P has been to 2090, and a break of this, which is suggested by the 4 hour/daily momentum indicators, could now see a run towards the 200 DMA at around 2080 and then towards 2050/60. Much will depend on the US election headlines, and if Clinton is again perceived to be in front we could see a quick recovery in stocks, where resistance will now be found in the S+P at 2105/10 and again at 2120, which if seen would appear to be a decent area to sell into, with a SL placed above the 100 DMA, which has capped it recently. Today’s FOMC could provide some volatility but with no surprises expected it should be the election which dictates the direction.S+P

24 Hour: Mildly bearish Medium: Prefer to sell rallies   
DJI Futures 17925
Resistance Support
18171 28 Oct high 17854 Session low
18145/50 31 Oct high /100 DMA 17790 (50% of 16957/18622)/(23.6% of 15163/18622)
18110 (50% of 18364/17854) 17710 200 DMA
18050 (38.2% of 18364/17854) 17617 6 July low
17975 (23.6% of 18364/17854) 17590 (61.8% of 16957/18622)

Bias

Ditto S+P. The Dow has headed sharply lower, reaching 17854 before a bounce to close at 17940. While the dailies remain fairly flat, but with the 4 hourlies pointing lower, I suspect that selling into strength towards 18000 may be the plan, with a SL now placed above 18050.

Below the 17854 low, we could then see a move towards 17800, and possibly 17700 although much will depend on election headlines. The FOMC will provide interim volatility, so be nimble.DJI

24 Hour: Mildly bearish Medium Term: Prefer to sell rallies
ASX SPI 5225
Resistance Support
5335 (50% of 5435/5234) 5201 Session low
5310 (38.2% of 5435/5234) 5174 15 Sept low
5304 31 Oct high 5152 13 Sept low
5280 (23.6% of 5435/5234) /100 HMA 5110 (50% pivot of 4643/5568)
5250 Minor 5100 6 July low

Bias            

As with yesterday, some short term consolidation near 5230 may be in store, but the momentum indicators are pointing lower so I don’t think we have seen the lows yet, and we could see another run towards the session low of 5201, towards 5170. On the topside, back above current levels will find offers at 5250, at 5280/85 and again at 5300/10, above which we could head to 5335/40 although this looks over the horizon for now.  Structurally, I still prefer to sell into strength, looking for an eventual run below 5230 level for a look at 5200 and lower, possibly for a test of the 13 Sept low at 5152.SPI
24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
GOLD 1287
Resistance Support
1319 (76.4% of 1343/1240) 1284 Minor
1315 100 DMA 1274 200 DMA
1304 (61.8% of 1343/1240) 1271 31 Oct low
1300 Minor 1262 25 Oct low/4 Oct low /28 Oct low
1292 (50% of 1343/1240)/Session high 1254 18 Oct low

Bias                              

We have now seen the break on the topside that we thought could be in store, with a quick run up to the resistance at 1292. With the 4 hour/daily momentum indicators now aligned higher, a test of 1300 would not surprise beyond which would allow a move towards 1315/20.

On the downside, the 200 DMA is now at 1274 and rising, which will attract decent buying interest. Under that, 1260/65 still provides support ahead of 1250 and the recent low at 1246, below which, the next downside target would allow another run towards 1240. This should again be strong, but below which there is not much to prop it up until 1210.Gold

24 Hour: Prefer to buy dips Medium Term: Neutral
SILVER 18.36
Resistance Support
19.35 (76.4% of 20.06/17.10) 18.16 (23.6% of 17.10/18.48)
18.92/95 (61.8% of 20.06/17.10)/100 DMA 17.95 (38.2% of 17.10/18.48)
18.70 Minor 17.80 (50% pivot of 17.10/18.48)
18.56 (50% of 20.06/17.10) 17.75 31 Oct low
18.48 Session low 17.55 28 Oct low

Bias                                                                                                 

Silver took a leap today, taking out various resistance levels in reaching a high of 18.49 and with the 4 hour/daily momentum indicators now aligned higher it looks as though we could be in for a squeeze towards the next major resistance level at 18.90/95. The hourlies are overbought so we could see a dip back towards 18.00 although at this stage, if seen it would appear to present a buying opportunity, but with a tight SL placed below 17.80.Silver
24 Hour: Prefer to buy dips Medium Term: Neutral
OIL (WTI) 46.32
Resistance Support
49.850 (50% pivot of 52.19/46.75) 46.45 (61.8 of 42.98/52.19)/100 DMA/100 WMA
49.15 100 HMA 46.17 Session low
48.80 (38.2% of 52.19/46.75) 45.65 (50% pivot of 39.17/52.19)Weekly Kijun
48.05 (23.6% of 52.19/46.75) 45.25/15 (76.4% of 42.98/52.19)/Daily cloud top
47.32 Session high 44.33 28 Sept low

Bias

WTI had a choppy session, making a new trend low at 46.17 but closing the day pretty much unchanged from the previous session. With the 4 hour/daily momentum indicators both pointing lower, a break of 46.00 could see a further acceleration to the downside, where the next decent target is at around 45.65 and then at around 45.15. On the topside, the session high has been 47.32 and as with yesterday, selling rallies seems the name of the game, where offers should arrive at 47.50 and then at 48.00.WTI
24 Hour: Prefer to sell rallies Medium Term: Mildly bearish

EURUSD: 1.1055
Resistance Support
1.1200 Descending trend resistance 1.1020 (23.6% of 1.0850/1.1068)
1.1140 100 DMA /(61.8% of 1.1325/1.0850) 1.0985 (38.2% of 1.0850/1.1068)
1.1115 Weekly cloud base 1.0960 (50% pivot of 1.0850/1.1068)
1.1085 55 WMA/Weekly Tenkan 1.0935 (61.8% of 1.0850/1.1068)
1.1068 Session high 1.0900 (76.4% of 1.0850/1.1068)

Bias

€/Usd has headed strongly higher on Tuesday, taking gout the 1.1040 resistance and heading, so far, to a high of 1.1068, with the dollar under heavy pressure from the latest election poll.

Technically, the 4 hour charts suggest that we could now head towards the 1.1085/1.1115 area, which should be strong resistance and may be worth selling into although the dailies are increasingly picking up some positive momentum, and above 1.1115 would suggest a move towards 1.1200.

On the downside, with the hourlies now becoming overbought, we could see a dip back towards 1.1040, below which would potentially test 1.1000 although any such move would seem to be an intraday buying opportunity. Below here, which seems unlikely in the short term would allow a run back into the 1.0940/80 consolidation area. It will be all about electioneering today until the release of the FOMC decision, and until the US get going again it may be fairly rangebound.

24 Hour: Mildly bullish Medium Term: Neutral

Economic data highlights will include:                                                         

ECB Non-Monetary Policy Meeting, EU Markit Manufacturing PMIs, US ADP Jobs data, ISM NY Index, EIA Crude Oil Stocks Weekly Change, FOMC Meeting

Meta Trader
EURUSD: 4 Hour

Euro


USDJPY: 104.07
Resistance Support
105.52 28 Oct high 103.80 Session low
105.23 31 Oct high 103.50 Daily cloud top/21 Oct low
105.11 Session high 103.16 19 Oct low
104.80 100 HMA 103.00 Minor
104.40 200 HMA 102.80 (50% pivot of 100.05/105.52) /Daily Kijun

Bias

US$Jpy has reverted to risk-off, safe- haven mode and has headed sharply lower following the release of the poll that shows Trump going head to head with Clinton. After making a high of 105.11, the dollar is now back down at 104.00 having traded down to 103.80.

Further downside, below the 103.80 low, will find support at the daily cloud top at 103.50, where I would still be a cautious buyer but with a tight stop near 103.10.  Below there would allow a test of 102.80 and under there would open the way towards 102.00/15.On the topside, resistance will be seen at the 200 HMA at 104.40 and then at the 100 DMA at 104.80, ahead of the session high at 105.11 which looks unlikely to be seen again today.With the momentum indicators currently aligning to point lower, selling intraday rallies seems the plan for the next 24 hours although a hawkish FOMC outlook would quickly change that theory and send the dollar higher again.

24 Hour: Prefer to sell rallies Medium Term: Neutral

Economic data highlights will include:

Consumer Confidence

Meta Trader
USDJPY: 4 Hour

Yen


GBPUSD: 1.2241
Resistance Support
1.2470 7 Oct high 1.2143 31 Oct low
1.2400 (38.2% of 1.3444/1.1821) 1.2113 28 Oct low
1.2332 19 Oct high 1.2088/81 11 Oct low/25 Oct low
1.2297 20 Oct high 1.2050 Minor
1.2280 Session high 1.2000 Minor

Bias                                                                                     

Cable was largely left out of the action on Tuesday and remains stuck within the familiar range.

As before, the 4 hour charts are flat and further choppy trade, within the recent 1.2050/1.2300 range may be in order today although the outcome of the FOMC decision could cause some increased volatility. Once again, there are better pairs to trade but the dailies still look mildly constructive and if we can make a sustained run above 1.2300, we could see a run towards 1.2430/75.

24 Hour: Neutral Medium Term: Neutral.
Meta Trader
GBPUSD: 4 Hour

Gbp


USDCHF: 0.9750
Resistance Support
0.9864 (50% pivot of 0.9999/0.9728) 0.9728 Session low
0.9832 (38.2% of 0.9999/0.9728) 0.9714 (61.8% of 0.9538/0.9999)
0.9790 (23.6% of 0.9999/0.9728) 0.9690 Minor
0.9780 200 DMA 0.9650 (76.4% of 9538/0.9999)
0.9765 100 DMA 0.9630 26 Aug low

Bias                                                                             

The Chf was in heavy demand as a safe-haven on Tuesday, with the dollar falling sharply, from 0.9899, to a low of 0.9727.

Technically, we have now broken below the 200 DMA/100 DMA supports, which will act as resistance ahead of 0.9800, and with the momentum indicators aligning to point lower further downside pressure would seem possible. If so, 0.9700/15 will provide some support but below which could see a run towards 0.9650.The topside today looks likely to be contained at 0.9800. If we do see a break above 0.9800, then sellers should arrive at 0.9840/60, although I am doubtful of seeing it up here again today.

24 Hour: Prefer to sell rallies Medium Term: Neutral
Meta Trader
USDCHF: 4 Hour

Chf


AUDUSD: 0.7652
Resistance Support
0.7756 10 Aug low 0.7620 200 HMA
0.7733 20 Oct 0.7600 Minor
0.7708 26 Oct high 0.7587/82 Daily Cloud top /31 Oct low
0.7688 Session high 0.7570/65 Daily cloud base /100 DMA
0.7670 Minor 0.7557/54 28 Oct low/(61.8% of 0.7441/0.7733)

Bias

With the RBA now seeming set to stay on hold for the medium-to-longer term, and with the improving China manufacturing data, seen yesterday, the Aud would seem set to remain underpinned for a while to come and indeed it found decent buying interest through the session by reaching 0.7688, helped in part by the rally in metal prices.

Further choppy trade within the broad 0.7500/0.7700 range seems likely although given the current US$ weakness, another intraday test of the topside would not surprise. Above that would run into decent offers at 0.7700/10, which I suspect would cap it, at least until the FOMC result in 24 hours time. As before, selling into 0.7700 with a SL above 0.7733, or preferably above 0.7760 is preferred. The dailies look flat and it could therefore remain choppy near current levels over the next few days as we head towards the NFP on Friday. The downside looks a little limited today and good support lies below 0.7600, in the 0.7570/85 area, a break of which would find further decent support all the way down to 0.7500.

24 Hour: Neutral Medium Term : Prefer to sell rallies     

Economic data highlights will include:

Building Permits

Meta Trader
AUDUSD: 4 Hour

Aud


NZDUSD: 0.7183
Resistance Support
0.7265 20 Oct high 0.7146 Session low
0.7240 Neckline 0.7136 31 Oct low
0.7220 Minor 0.7107 28 Oct low/27 Oct low
0.7200 Descending trend resistance 0.7087 (76.4% of 0.7034/0.7265)
0.7186/90 100 DMA/Session high 0.7070 Rising trend support

Bias                                                   

The Kiwi has had a volatile day, in reaching a high of 0.7190, helped along initially by the general US$ weakness and then by the release of the Global Dairy Trade Index (Fonterra GDT PI +11.4 %, WMP +19.8%).

We are now trading just below the highs, with the Kiwi currently capped by the 100 DMA and descending trend resistance at 0.7200, but a break of which would allow a move back towards 0.7265.The short term momentum indicators do suggest a topside break. On the other hand, further choppy trade could be the outcome today as we wait on the FOMC outcome but if we do head back to the downside, decent support will now arrive at  0.7135/45 ahead of the strong 0.7100/10 area. Further out, a  break below 0.7100 could head towards support at 0.7085 and below there at 0.7060, which I expect to see eventually, although progress may be slow, Below 0.7060 would open 0.7035 (13 Oct low) but not yet.A test of slightly higher ground may be in order today but from a structural outlook, selling rallies above 0.7220 is preferred, with a SL placed above 0.7265. Watch out for the NZ Unemployment and the RBNZ Inflation Expectations coming up shortly.

24 Hour: Neutral Medium Term : Prefer to sell rallies    

Economic data highlights will include:

NZ Unemployment, RBNZ

Meta Trader
NZDUSD: 4 Hour

Nzd