20 Dec: Yellen underpins the dollar with upbeat comments of jobs/wages growth. BOJ today.

By | December 20, 2016

Markets have been mixed and have traded mostly sideways on Monday, with the US$ picking up a little ground late in the session after Janet Yellen said, at a university graduation speech, that she sees a strong job market and wage growth picking up a little in coming months. Otherwise it was generally fairly quiet, with stocks and commodities both fairly rangebound.

Looking ahead, Asia will be busy on Tuesday with the release of the BOJ Interest Rate Decision, where no change in policy is expected, and the statement/press conference will be the main focus, and which will be followed by the RBA Minutes of the last meeting. It then all goes quiet, with little to come from either the EU (PPI, German Current Account) or the US, suggesting that it may be a fairly quiet session as we wind down towards Christmas.

CURRENCIES
EURUSD: 1.0397
Res  1.0430  1.0480  1.0500
Sup  1.0365  1.0335  1.0300
USDJPY: 117.32
Res  117.65  118.00  118.40
Sup  117.00  116.80  116.55
GBPUSD: 1.2397
Res  1.2425  1.2460  1.2505
Sup  1.2375  1.2355  1.2300
USDCHF: 1.0273
Res  1.0285  1.0310  1.0345
Sup  1.0240  1.0220  1.0195
AUDUSD: 0.7252
Res  0.7280  0.7310  0.7340
Sup  0.7220  0.7200  0.7180
NZDUSD: 0.6932
Res  0.6970  0.7005  0.7045
Sup  0.6930  0.6890  0.6840
INDICES / COMMODITIES
S+P: 2259
Res  2268  2278  2290
Sup  2252  2240  2230
DJI: 19832
Res  19895  20000  19965
Sup  19760  19700  19600
ASX SPI: 5523
Res  5532  5550  5572
Sup  5500  5480  5462
GOLD: 1138
Res  1142  1150  1164
Sup  1130  1122  1110
SILVER: 15.94
Res  16.30  16.45  16.60
Sup  15.85  15.60  15.35
OIL (WTI): 52.13
Res  52.50  52.75  53.35
Sup  51.45  51.00  50.50
Indices/commodities
S&P Futures 2259

The S+P has ranged between 2253/63 on Monday leaving the outlook unchanged

The 4 hour charts and the dailies have been looking a little negative but appear to be flattening out so some caution is warranted by shorts, although with little data out today it could be another sideways session ahead. On the topside, resistance will be seen at 2265/70 and again at the all-time high of 2777, above which would see the slow grind continue to 2300, albeit this now seems delayed for a while. On the downside, support will be seen at 2250 and again at 2235/40. I still mildly prefer to trade from the short side, but with a tight SL placed just above the 2277 all-time high.

24 Hour: Prefer to sell rallies

Medium term: Prefer to sell rallies

 

                                         Resistance Support
2280 Minor 2253 Session low/200 HMA
2275 Minor 2247 15 Dec low/ H/S Neckline
2277 All-time high/14 Dec high 2235 Minor
2267 15 Dec high 2225 Minor
2263 16 Dec high/Session high 2220 (23.6% of 2028/2276)
DJI Futures 19832

Ditto S+P. The DJI has ranged between 19791/19858 on Monday. The momentum indicators seem to be turning more neutral, requiring a cautious stance. I still prefer to be short, but with a tight SL placed above the all-time high of 19964, or preferably above 20,000.

24 Hour: Prefer to sell rallies

Medium term: Prefer to sell rallies

 

Resistance Support
22000 Minor 19791 Session low
21000 Minor 19740 15 Dec low
20000 Minor 19700 Minor.
19964 All-time high/14 Dec high 19600 Minor
19894 15 Dec high 19500 Minor.
ASX SPI 5523

The ASX jumped higher at the open yesterday ahead of the MYEFO and has done little since, trading in a tight range near 5525.The shorter term momentum indicators suggest the chance of a similar session today, with support sitting at 5500 and at 5480.Further out, below here could see a run towards the 7 Dec low of 5447 and then to the 6 Dec low of 5422. On the topside, resistance will be seen at 5535 and at the 5550 area. Trading from the short side and selling into strength with a SL placed above 5560 remains the preferred trade.

24 Hour: Prefer to sell rallies

Medium term: Prefer to sell rallies

 

Resistance Support
55600 Minor 5500 Minor
5580 Minor 5480 Minor
5570 Minor 5462/57 16 Dec low/(23.6% of 5029/5681)
5549 14 Dec high 5410 100 DMA
5532 Session high 5388 5 Dec low
GOLD 1138

Gold has had a rangebound session (1134/1142) leaving the outlook unchanged

Below the session low, 1120 will continue to provide strong support but below there would allow a move to 1100, a break of which could then see a run towards 1090 and even to 1070. While the weekly charts suggest that this could eventually happen, the dailies are now becoming oversold, and the 4 hour charts hint at the chance of a bounce, beyond Monday’s 1142 high, providing better levels to sell into.

If so, the topside will see offers at 1145/50 and again at 1160/65. Selling rallies is preferred.

24 Hour: Neutral

Medium term: Prefer to sell rallies

 

Resistance Support
1172 (23.6% of 1337/1122) 1133 Session low
1165 14 Dec high /12 Dec high 1123/22 15 Dec low/(76.4% of 1046/1375)
1157 Minor 1108 28 Jan low
1150 Minor 1090 Minor
1142/44 Session high/15 Dec high 1071 14 Jan low
SILVER 15.94

Silver has had a rangebound session (15.92/16.20) leaving the outlook unchanged

The short term momentum indicators are mixed, suggesting further choppy trade ahead although the dailies are still pointing lower and below 15.80 could quickly see a run towards 15.35/30, below which 15.00 and 14.80 would attract.

On the topside, 16.25/30 will again provide minor resistance, beyond which we could see a squeeze towards 16.60, above which would then open the way towards 17.00, albeit doubtful today. Selling rallies is preferred.

24 Hour: Prefer to sell rallies

Medium term: Neutral

 

Resistance Support
17.05 (38.2% of 18.98/15.88) 15.90 16 Dec low
16.88 200 HMA 15.50 Minor
16.60 (23.6% of 18.98/15.88) 15.35/38 11 April low/(76.4% of 13.64/21.13)
16.45 Minor 15.00 Minor
16.27 16 Dec high 14.78 1 April low
OIL (WTI) 52.13

WTI traded a tight 51.48/52.49 on Monday and another sideways session looks possible today although the API Weekly Crude Oil Stock Inventory will be released late in the day.

 On the topside, above the session high the next resistance will be seen at the 15 Dec high of 52.75. Beyond there could see a return to 53.00+ and on to the recent 54.48 peak although this looks some way off at this stage. Support will arrive at the session low and then nearby, at the neckline of the major reverse head shoulder formation, at 51.15. Below that may see a return to the 16 Dec low of 50.48 although this looks a little unlikely in the near term. Under there though could see a return to 50.00/49.75, which should be strong support, but below which could see an acceleration towards 48.00/50, below which could see a run to 46.50/00

24 Hour: Neutral

Medium term: Neutral

 

Resistance Support
54.48 12 Dec high 51.48 Session low
54.00 Minor 50.48 16 Dec low
53.30 Minor 49.92 15 Dec low
52.75 14 Dec high 49.58 8 Dec low
52.49 Session high 48.30 (50% pivot of 42.18/54.48)

EURUSD: 1.0397

The Euro was unable to take advantage of the better than expected German IFO (111.0 in December, up from 110.4 in November and above expectation of 110.7.) and is trading towards its session lows as the dollar made some late gains following the speech from Janet Yellen.

Technically, below today’s low (1.0395), last week’s low of 1.0365 will provide support ahead of the 1.0334 Jan 2013 low but, with the daily/weekly momentum indicators picking up downside momentum a test of parity would seem to be a matter of time. Indeed the head/shoulder formation, seen on the weekly charts, suggests that eventually we are heading much, much lower. In the meantime, selling rallies appears to be the plan.

The 4 hour momentum indicators still hint at the chance of another short term squeeze, possibly back towards 1.0490/1.0550, but I would not be looking for too much more in the short term. With little data due, another sideways session may be in store, possibly using 1.0400 as a pivot.

24 Hour: Neutral – Prefer to sell rallies

Medium term: Mildly bearish

 

Resistance Support
1.0600 Minor 1.0395 Session low
1.0560 (38.2% of 1.0365/1.0872) 1.0365 15 Dec low
1.0520 Minor 1.0334 Jan 2003 low
1.0485 (23.6 of 1.0365/1.0872) 1.0300 Minor
1.0478 Session high 1.0250 Minor

Economic data highlights will include:

German PPI, EU Current Account, US API Weekly Crude Oil Stock Inventory

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 117.32

 US$Jpy is lower today, currently above 117.00, having earlier fallen to a low of 116.55  on the back of softer US yields, and pressured lower as traders took profit on long positions ahead of today’s BOJ Meeting.

The move has allowed some relief to the overbought nature of the daily charts, although there is plenty of room for further downside. The point to watch seems to be the session low, where the rising trend support will look to hold the dollar up. A break of this could see a deeper move towards 115.00/114.50 although that remains to be seen.

It may be that we spend a while chopping around below 120.00 ahead of Christmas, allowing the dailies to continue to unwind, and there are easier pairs to trade right now but looking further out, with the weeklies pointing strongly higher, a retest of 125.85 (7 June 2015 high) would seem to be on the cards at some stage in 2017.

24 Hour: Neutral

Medium term: Prefer to buy dips

 

Resistance Support
120.00 Psychological 116.54 Minor
119.35 (76.4% of 125.85/98.94) 116.15 Minor
118.80 Descending trend resistance 115.85 200 HMA
118.65 15 Dec high 115.50 Minor
118.42 16 Dec high 115.00 Minor

Economic data highlights will include:

BOJ Interest Rate Decision/Statement/Press Conference

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2397

Cable has been under pressure today, mostly due to  sales of Gbp/Jpy but currently sits back at 1.2400 after having earlier fallen from a high of 1.2500 to a low of 1.2355.

The shorter term charts look neutral although the dailies seem to be pointing increasingly lower, so below the session low could see a run towards 1.2300 and perhaps back to 1.2200. Short term resistance lies at 1.2440 and 1.2500, which is likely to be toppish if seen again today.

24 Hour: Neutral

Medium term: Mildly bearish

 

Resistance Support
1.2635 (76.4% of 1.2723/1.2354) 1.2354 Session low
1.2581 (61.8% of 1.2723/1.2354) 1.2300 (50% pivot of 1.1821/1.2775)
1.2536 (50% 1.2723/1.1.2354) 1.2250 Minor
1.2496 (38.2% 1.2723/1.1.2354) 1.2190 (61.8% of 1.1821/1.2775)
1.2440 (23.6% 1.2723/1.1.2354) 1.2135 Minor

Economic data highlights will include:

CBI Distributive Trade Survey – realised

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0273

US$Chf has traded a tight 1.0220/1.0282, leaving the outlook unchanged.

Further consolidation looks likely in the session ahead, but with the dailies leaning bullish I think that buying dips, with a SL placed either tight below the session low, or preferably  under the  1.0140, 61.8% Fibo support may be the way to go.

In the longer term, the dollar has taken out all the nearby resistance levels and there is now not too much to stop it heading on towards 1.0600+. Short term dips are likely, where the downside currently looks supported at 1.0220, with SL best placed below the 1.0195 Friday low.

24 Hour: Neutral

Medium term: Bullish

                                                                

Resistance Support
1.0500 Minor 1.0220 Session low
1.0400 Minor 1.0225 (38.2% of 1.0019/1.0343)
1.0343 15 Dec high 1.0195 15 Dec low
1.0310 16 Dec high 1.0180 (50% of 0.9549/1.0343)
1.0285 Session high 1.0140 (61.8% of 0.9549/1.0343)

Economic data highlights will include:

Trade Balance

Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7252

The Aud has managed to hang on to its AAA rating, although it has not had much of an effect as the currency has fallen to a 6 month low of 0.7241, coming under pressure late in the day form the generally stronger US$.

The hourly charts still suggest the chance of some minor bullish divergence, and if so, selling into rallies towards 0.7300/20 would seem to be the way forward. The 4 hour/daily momentum indicators are both heading lower so we may not see much of a bounce, and a break of 0.7240 would then open the way to 0.7220/0.7200, below which there is little to support the Aud until 0.7145.

Further out, I think we may have started the move to 0.7000, and eventually lower. Given the potential for diverging monetary policy between the RBA/Fed heading into 2017 as well as the increasing chance of a cut in the Australian AAA credit rating, we could eventually be looking towards a move to the January lows of 0.6825.

24 Hour: bearish – Prefer to sell rallies

Medium term: Bearish

 

Resistance Support
0.7428 200 HMA 0.7241 Session low
0.7382 (50% of 0.7524/0. 7241) 0.7218 3 June low
0.7348 (38.2% of 0.7524/0. 7241) 0.7200 2 June low
0.7308/12 (23.6% of 0.7524/0.7241) /Session high 0.7180 Minor
0.7280 Minor 0.7144 24 May low

Economic data highlights will include:

CB Leading Economic Index, MYEFO, WBC Leading Indicator, RBA Minutes, China Leading Economic Index

Meta Trader
AUDUSD: 4 Hour

audaud-1


NZDUSD: 0.6932

The  Kiwi did squeeze up to 0.6988 earlier in the session but is now lower, sitting on the 0.6930 support and looking heavy, with a chance of seeing a test of the 0.6900/15 area and possibly lower.

In the short term, the hourly charts do suggest some minor bullish divergence, so selling into rallies towards the session high would again seem to be the way forward, should we see it. The 4 hour/daily/weekly momentum indicators are all heading lower though, so we may not see much of a bounce and further out a break of 0.6900 would then open the way to the major rising trend support at 0.6820.

Watch out for the GTI tonight.

24 Hour: bearish – Prefer to sell rallies

Medium term: Bearish

 

Resistance Support
0.7083 (50% of 0.7238/0. 6930) 0.6930 16 Dec low/Session low
0.7047 (38.2% of 0.7238/0. 6930) 0.6915 (50% of 0.6347/0.7484)
0.7002 (23.6% of 0.7238/0.6930) 0.6890 Minor
0.7688 Session high 0.6840 Minor
0.6970 H/S Neckline 0.6820 Rising trend support

Economic data highlights will include:

Global Dairy Trade Index

Meta Trader
NZDUSD: 4 Hour

nzdnzd1

The post 20 Dec: Yellen underpins the dollar with upbeat comments of jobs/wages growth. BOJ today. appeared first on FX Charts Daily.