22 Dec: Markets trading sideways ahead of a busy US data schedule.

By | December 22, 2016

Stock markets have traded sideways and the US$ is mixed on Wednesday, giving back some of the recent gains against the EU majors as traders took profits ahead of Christmas, while firmer against the commodity bloc, which remain heavy, near trend lows. Metals have also traded sideways while WTI is a little lower after U.S. crude stocks unexpectedly rose in the latest weekly inventory figures. In other data, U.S. existing home sales unexpectedly rose in November by 0.7%, reaching their highest level in nearly 10 years.

Thursday has the making of a wild ride late in the day, with a heavy US data schedule due in what will be an illiquid session. The day kicks off with the NZ Q3 GDP (exp 0.9%qq, 3.7% yy) and Current Account (exp -5.01 bio) and there is then little to be seen until the US get going when a raft of numbers are due, including the Chicago Fed National Activity Index, US Personal Consumption/Expenditure/Income, weekly Jobless Claims (exp +256k), Q3 GDP (exp 3.3% annualised), Durable Goods Orders (exp -4.7%, November) and the House Price Index. Given the diminishing interest, we could see some exaggerated moves so keep stops in place.

This will be the last update before Christmas so we hope that you have a good holiday. From early January we will have a new web address at www.fxcharts.net

CURRENCIES
EURUSD: 1.0426
Res  1.0450  1.0480  1.0525
Sup  1.0400  1.0350  1.0300
USDJPY: 117.56
Res  117.90  118.25  118.65
Sup  117.25  117.00  116.70
GBPUSD: 1.2341
Res  1.2390  1.2425  1.2490
Sup  1.2250  1.2315  1.2200
USDCHF: 1.0260
Res  1.0290  1.0320  1.0345
Sup  1.0225  1.0200  1.0170
AUDUSD: 0.7245
Res  0.7280  0.7310  0.7340
Sup  0.7220  0.7200  0.7180
NZDUSD: 0.6904
Res  0.6930  0.6950  0.6990
Sup  0.6880  0.6850  0.6820
INDICES / COMMODITIES
S+P: 2265
Res  2270  2278  2290
Sup  2260  2250  2240
DJI: 19907
Res  19935  20000  19965
Sup  19850  19790  19740
ASX SPI: 5576
Res  5590  5600  5620
Sup  5562  5550  5536
GOLD: 1132
Res  1142  1150  1160
Sup  1122  1110  1100
SILVER: 15.94
Res  16.20  16.45  16.60
Sup  15.65  15.50  15.35
OIL (WTI): 52.42
Res  53.20  53.75  54.55
Sup  52.05  51.70  51.15

 

Indices/commodities
S&P Futures 2265
No change (2663/2268 range). Today’s direction will depend on the outcome of the heavy data schedule.  On the topside, resistance will be seen 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 2260 and again at 2250. 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: Neutral Medium term: Prefer to sell rallies

 

                                         Resistance Support
2290 Minor 2259 20 Dec low
2285 Minor 2253 19 Dec low/200 HMA
2280 Minor 2247 15 Dec low/ H/S Neckline
2277 All-time high/14 Dec high 2235 Minor
2269 20 Dec high 2220 (23.6% of 2028/2276)
DJI Futures 19907
Ditto S+P.  The DJI has traded a range of 19891/19928, pulling up short of last week’s 19964 and the magnet that seems set to attract, at 20,000. A good run of data today, could see the 20,000 barrier tests. The momentum indicators are pretty much 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: Neutral Medium term: Prefer to sell rallies

 

Resistance Support
22000 Minor 19832 20 Dec low
21000 Minor 19791 19 Dec low
20000 Minor 19740 15 Dec low
19964 All-time high/14 Dec high 19700 Minor.
19931 20 Dec high 19600 Minor
ASX SPI 5576
The ASX had another firm session, reaching 5589 before giving up some of the gains to finish the day at 5575.

A neutral stance is again required although the 4 hour charts do hint at further gains, where above 5590 could see a quick run to 5600 and above, with not a lot to then stop it heading to 5680. On the downside, support will be seen at the 5555 session low and again at the 20 Dec low at 5511. This seems unlikely to be seen today although while the near term momentum indicators look positive, I am still wary of the bearish divergence that can be seen in the weekly charts. In the meantime, buying dips seems to be the plan.

24 Hour: Neutral Medium term: Prefer to sell rallies

                                                                         

Resistance Support
5640 Minor 5555 Session low
5620 Minor 5535 200 HMA
5600 Minor 5511 20 Dec low
5591 13 Dec high 5480 Minor
5589 Session high 5462/57 16 Dec low/(23.6% of 5029/5681)
GOLD 1132
Unchanged. Below the 20 Dec 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 remain oversold and could yet lead to a bounce providing better levels to sell into. If so, the topside will see offers at 1140, at 1150 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) 1125 20 Dec low
1165 14 Dec high /12 Dec high 1123/22 15 Dec low/(76.4% of 1046/1375)
1147 200 HMA 1108 28 Jan low
1142/44 19 Dec high/15 Dec high 1090 Minor
1139 20 Dec high 1071 14 Jan low
SILVER 15.94
Unchanged. The short term momentum indicators are mixed, suggesting further choppy trade ahead although the dailies are still pointing lower and below the 20 Dec low of 15.63 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 Session low
16.80 Minor 15.63 20 Dec low
16.60 (23.6% of 18.98/15.88) 15.50 Minor
16.45 200 HMA 15.35/38 11 April low/(76.4% of 13.64/21.13)
16.27 16 Dec high 15.00 Minor
OIL (WTI) 52.42
WTI is a bit lower after the unexpected rise in stockpiles, which the EIA reported had risen by 2.256 million barrels after a drop of 2.563 million barrels the previous week.

The short term momentum indicators are now pointing a little lower although the longer term charts remain positive and therefore, on the topside, back above 53.00 and the session high/20 Dec high of 53.75,  the next resistance will be seen at the 54.48, beyond which there is not too much resistance ahead of 57.10 (38.2% of 107.65/26.03) .On the downside, support will arrive at the session low and then at the  20 Dec low (52.04) and at the neckline of the major reverse head shoulder formation, at 51.15. As long as this holds, the head/shoulder objective remains at $82.00. Below 51.00 may see a return to the 16 Dec low of 50.48 although this looks a little unlikely in the near term. Under there 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: Mildly bullish

 

Resistance Support
56.00 Minor 52.04 20 Dec low
55.00 Minor 51.48 19 Dec low
54.48 12 Dec high 51.15 H/S Neckline
54.00 Minor 50.48 16 Dec low
53.75 Session high/20 Dec high 49.92 15 Dec low

EURUSD: 1.0426
There is little change today, with the Euro sitting close to 1.0400 after trading a 1.0382/1.0450 range.

Technically, below 1.0400 and the recent low at 1.0351 would allow a move to the 1.0334, Jan 2003 low and further out, with the daily/weekly momentum indicators picking up downside momentum, a test of parity would seem to be a matter of time. There is not very much support at all below 1.0300 until 1.0050, which should be a strong Fibo level (76.4% of 0.8225/1.6037) but below which 1.0000 would quickly beckon. Indeed the head/shoulder formation, seen on the weekly charts, suggests that eventually we are heading much lower.

In the meantime, selling rallies appears to be the plan and, as before, the 4 hour momentum indicators still hint at the chance of another short term squeeze, possibly back towards 1.0450/1.0500. It could be a busy session ahead with plenty of data to come. Overall selling into strength is preferred.

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

 

Resistance Support
1.0548 (38.2% of 1.0351/1.0872) 1.0400 Minor
1.0525 Minor 1.0382 Session low
1.0500 Minor 1.0351 20 Dec low
1.0472 (23.6 of 1.0351/1.0872) 1.0334 Jan 2003 low
1.0450 Session High 1.0300 Minor

Economic data highlights will include:

EU Economic Bulletin, Chicago Fed National Activity Index, US Personal Consumption/Expenditure/Income, Jobless Claims Q3 GDP, Durable Goods Orders, House Price Index

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 117.56
US$Jpy has traded a 117.10/118.06 range on Wednesday, leaving the outlook unchanged.

More of the same looks possible as we approach major descending trend resistance levels at around 119.00 and then again at 120.50. On the downside, support will be seen at the 20 Dec low at 117.00, where the rising trend support will look to hold the dollar up. A break of this could see a deeper move towards 116.50 and even to 115.00/114.50 although that is a long way off and seems unlikely to be seen ahead of Christmas unless there is a need for major safe haven demand.

As we said previously, 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.

The data due later today may provide some volatility but overall I would expect further choppy consolidation in the increasingly thin conditions.

24 Hour: Neutral Medium term: Prefer to buy dips

 

Resistance Support
119.35 (76.4% of 125.85/98.94) 117.10 Session low
118.80 Descending trend resistance 116.70 200 HMA
118.65 15 Dec high 116.50 Minor
118.24 20 Dec high 116.00 Minor
118.06 Session high 115.50 Minor

Economic data highlights will include:

Foreign Bond/Stocks Investment

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2341
Cable has had a rangebound session (1.2323/1.2390) leaving the outlook unchanged

The shorter term charts look neutral although the dailies seem to be pointing lower so below 1.2310/20 could see a test of 1.2300 and lower, with not too much support to be seen until 1.2190/1.2200. Above the session high, short term resistance lies at 1.2420, 1.2440 and 1.2500, which is likely to be toppish if seen again today. Selling rallies is favoured.

24 Hour: Neutral Medium term: Mildly bearish

 

Resistance Support
1.2536 (50% 1.2723/1.1.2354) 1.2312 20 Dec low
1.2496 (38.2% 1.2723/1.1.2354) 1.2300 (50% pivot of 1.1821/1.2775)
1.2440 (23.6% 1.2723/1.1.2354) 1.2250 Minor
1.2415 20 Dec high 1.2190 (61.8% of 1.1821/1.2775)
1.2390 Session high 1.2135 Minor

Economic data highlights will include:

Consumer Confidence,

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0260
US$Chf has traded a little lower, to 1.0226, but at the end of the session is pretty much rangebound, with 1.0300 providing a cap.

Further consolidation near current levels looks likely, but with the dailies leaning bullish, I think buying dips, with a SL placed either tight below 1.0195, 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 once back above 1.0340 there is now not too much to stop it heading on towards 1.0600+. Short term dips are likely, where the downside looks supported at 1.0220, with SL best placed below the rising trend support 1.0195 low.

24 Hour: Prefer to buy dips Medium term: Bullish

                                                                

Resistance Support
1.0500 Minor 1.0226 Session low
1.0400 Minor 1.0220 (38.2% of 1.0019/1.0343) 200 HMA
1.0343 15 Dec high 1.0200 Minor
1.0319 20 Dec high 1.0180 (50% of 1.0019/1.0343)
1.0295 Session high 1.0140 (61.8% of 1.0019/1.0343)
Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7245
The Aud remains heavy going into Thursday, unable to head beyond the 0.7280 highs and slipping lower heading into the close.

The 4 hour momentum indicators still look mildly constructive so further gains back towards the session high would still seem possible. Above there, 0.7290/0.7310 would see decent offers, and if seen would provide a decent opportunity to get short. On the downside, support will be seen at the 0.7222, 20 Dec low ahead of 0.7200. Under there, would open the way to 0.7180 and then to the 7 month mow at 0.7144.

Further out, with the longer term momentum indicators pointing down, 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: Prefer to sell rallies Medium term: Bearish

 

Resistance Support
0.7370 (50% of 0.7524/0. 7222) 0.7240 Session low
0.7336 (38.2% of 0.7524/0. 7222) 0.7222/18 20 Dec low/3 June low
0.7312 19 Dec high 0.7200 2 June low
0.7292 (23.6% of 0.7524/0. 7222) 0.7180 Minor
0.7279 Session high 0.7144 24 May low

Economic data highlights will include:

WBC Leading Index

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.6904
The Kiwi made it up to 0.6946 but was unable to maintain the gains and is now back towards the 0.9896 lows.

The short term momentum indicators still look mildly constructive so another bounce towards the session high is possible, above which could the squeeze towards 0.6970, which should be good resistance although I don’t think we see it today.

On the downside, support will be seen below 0.6900 at the recent low, at 0.6882, and below there, a break of 0.0.6880 would then open the way to the major rising trend support at 0.6820.  The Q3 GDP is coming up.

24 Hour:  Prefer to sell rallies Medium term: Bearish

 

Resistance Support
0.7060 (50% of 0.7238/0. 6882) 0.6896 Session low
0.7015 (38.2% of 0.7238/0. 6882) 0.6882 20 Dec low
0.7000 Minor 0.6840 Minor
0.6965/70 (23.6% of 0.7238/0.6882) / H/S Neckline 0.6820 Rising trend support
0.6946 Session high 0.6800 Minor

Economic data highlights will include:

Q3 GDP, Current Account

Meta Trader
NZDUSD: 4 Hour

nzd

The post 22 Dec: Markets trading sideways ahead of a busy US data schedule. appeared first on FX Charts Daily.