22 Nov: US$ mixed as FOMC Minutes come into focus. Sterling higher on positive Brexit headlines.

By | November 22, 2016

Currency markets have had a mixed session on Monday, with Sterling the big winner after some slightly more positive Brexit headlines as the UK PM, May hinted at a the chance of a transitional deal with the EU in order to avoid a “cliff edge” for business when Britain’s two-year Brexit negotiating period comes to an end. Elsewhere, the commodity bloc currencies are also a little higher, assisted by a more positive attitude to risk as US stocks remained firm, with the S+P today making a new all time high. Commodities have also been underpinned, with the energy sector and WTI in particular, having a good session (+4%). The big loser of the day, once again, has been the Yen which is currently sitting close to session lows against the dollar and which appears to be heading higher still in the days ahead.

Today is pretty much a free day as far as economic data goes until the release of the US Existing Home Sales figures, and as we approach the Thanksgiving Day long weekend on Thursday it may be a day of consolidation. Some profit taking ahead of the holidays would not surprise either, which could push the dollar a little lower. Aud$ traders should look out for the RBA Asst Governor, Kent, who will be speaking in early European trade

CURRENCIES
EURUSD: 1.0619
Res  1.0650  1.0695  1.0745
Sup  1.0570  1.0520  1.0500
USDJPY: 111.10
Res  111.35  111.50  111.85
Sup  110.80  110.45  110.00
GBPUSD: 1.2491
Res  1.2510  1.2560  1.2600
Sup  1.2460  1.2415  1.2365
USDCHF: 1.0096
Res  1.0125  1.0150  1.0195
Sup  1.0075  1.0025  1.0055
AUDUSD: 0.7362
Res  0.7380  0.7400  0.7425
Sup  0.7345  0.7310  0.7285
NZDUSD: 0.7054
Res  0.7075  0.7110  0.7145
Sup  0.7030  0.6985  0.6935
INDICES / COMMODITIES
S+P: 2193
Res  2200  2210  2220
Sup  2180  2170  2160
DJI: 18909
Res  18920  19000  19050
Sup  18810  18700  18575
ASX SPI: 5388
Res  5400  5420  5440
Sup  5370  5346  5330
GOLD: 1212
Res  1220  1230  1240
Sup  1202  1190  1180
SILVER: 16.57
Res  16.85  17.00  17.15
Sup  16.45  16.25  16.00
OIL (WTI): 48.33
Res  48.50  49.00  49.80
Sup  47.75  47.00  46.45

 

Indices/commodities
S&P Futures 2193
Resistance Support
2215 Minor 2178 Session low
2210 Minor 2172 17 Nov low
2205 Minor 2160 200 HMA
2200 Psychological 2150 (23.6% of 2028/2187)/100 DMA
2195 Session high/All time high 2125 (38.2% of 2028/2184)

Bias

US stocks have been underpinned by the energy sector at the start of the week, allowing the S+P to make a new all-time high at 2194, closing the day just about at its peak. The dailies still look constructive, and it is not out of the question that we could now see a stern test of 2200 and beyond, although I would be doubtful of running away to the topside ahead of the FOMC Minutes (Wednesday) and then the Thanksgiving long weekend, beginning on Thursday. On the downside, below the 2178 session low will find bids at 2160 and then there is strong support at 2150. For the time being a neutral stance is required, but given the look of the dailies, buying near term dips still seems to be the longer term plan. Just be aware of the short term wedge shape that seems to be building. A downside break could see an acceleration lower, so stops on long positions should be kept tight.sp

24 Hour: Neutral

Medium Term: Prefer to buy dips

DJI Futures 18909
Resistance Support
19300 Minor 18832 Session low
19200 Minor 18792 16 Nov low
19100 Minor 18755 15 Nov low
19000 Minor 18682 11 Nov low
18916 Session high/14 Nov high /All time high 18560 (23.6% of 17417/18916)

Bias

As with the S+P, the DJI was underpinned on Monday and managed to reach, and then to close at the previous all time high of 18916.

While the 4 hour momentum indicators still suggest limited, near-term upside momentum, the dailies remain positive, so buying dips still seems to be the plan.  Until Wednesday, a cautious stance is required and further rangebound trade seems likely as we await the FOMC Minutes.dji

24 Hour: Neutral

Medium Term: Prefer to buy dips

ASX SPI 5388
Resistance Support
5459 12 Oct high 5370 #m
5440 (76.4% of 5568/5029) 5350 Minor
5220 Minor 5336 Session low
5400 Minor 5330 200 HMA
5387 (Session high/100 DMA 5300 (23.6% of 5029/5387)

Bias                

The SPI has now taken out the 5370/75 resistance and has pushed on to 5389, leaving the outlook unchanged.  The daily indicators still look constructive, so the current rally could see a move to 5400+ where the next target would be at 5435/40. On the downside, dips look likely to hold 5370 and then 5355/60, and below there 5330 (200 HMA) should provide support.. The preference is to be long rather than short, but with the FOMC minutes due on Wednesday it may end up being rangebound until then.spi

24 Hour: Neutral

Medium Term: Mildly bullish

GOLD 1212
Resistance Support
1254 (38.2% of 1337/1203) 1203 Friday low
1240 Minor 1200 31 May low
1235 200 HMA / (23.6% of 1337/1203) 1190 16 Feb low
1233 16 Nov high 1181 10 Feb low
1217 Session high 1172 (61.8% of 1046/1375)

Bias

Gold has again traded under some pressure from the strong dollar, but has today held on above Friday’s low of 1203 and the support seen at 1,200, and currently sits in the middle of the days 1205/17 range, leaving the outlook unchanged.

With the dailies pointing still lower, further declines look to be in store in the days ahead, and a break below 1200 would head towards support levels layered at $10 increments, starting at 1190, down to 1170, so any downside progress, if seen, may be slow. The topside will again find offers at 1215/20 and then again 1230/35 although this is now looking over the horizon unless we see a sharp selloff in the dollar. Staying short is preferred, looking to sell into the 1220 area. SL above 1235.gold

24 Hour: Prefer to sell rallies

Medium Term: Mildly bearish

SILVER 16.57
Resistance Support
17.40  (38.2% of 18.98/16. 48) 16.51/48 Session low/(61.8% of 13.64/21.13)
17.30 (23.6% of 20.06/16. 48) 16.43 Friday low
17.23 16 Nov high 16.23 7 June low
17.04 (23.6% of 18.98/16. 48) 16.00 Minor
16.76 Session high 15.81 1 June low

Bias

Silver traded sideways on Monday (16.51/76), holding on above the important Fibo support at 16.48.

The 4 hour momentum indicators are recovering from having become oversold and further near term consolidation may be in store, but given that the dailies still point lower, Silver appears to be headed, eventually, for a test 16.25/00, below which would allow a run towards 15.80 and potentially to 15.40. Short term rallies should be limited to 16.85, possibly 17.00, which if seen would now appear to be a decent sell area, with a SL placed above 17.30.silver

24 Hour: Prefer to sell rallies

Medium Term:  Mildly bearish

OIL (WTI) 48.33
Resistance Support
51.50 Minor 47.75 Minor
50.90 25 Oct high 47.00 (23.6% of 42.18/48.48)
49.80 (76.4% of 52.19/42.18) 46.44 Monday gap low
49.00 Minor 46.05/00  (38.2% of 42.18/45.46.38) /100 DMA
48.40/48 (61.8% of 52.19/42.18)/Session high 45.15 Friday low

Bias

Oil prices climbed to a 3 week high on Monday, with WTI up by 4%, as the OPEC countries appeared to be moving closer to agreeing to limit output ahead of their meeting in Vienna on 30 Nov. The dailies look increasingly positive, so the structural view of buying dips remains intact, and having reached the 48.00 target, the possibility of the reverse head/shoulder formation would now suggest an objective of 50.60.

The downside would seem a bit limited in the short term, and buying dips is again preferred. Levels to watch would be at 47.75/80 and then at 47.00. Back below 46.75 would negate the head/shoulder theory and could then bring about a sharp decline, so keep stops tight, sub 46.50/40.   wti

24 Hour: Prefer to buy dips

Medium Term: Mildly bullish


EURUSD: 1.0619
Resistance Support
1.0758 16 Nov high 1.0585/78 Major rising trend support /Session high
1.0740/45 (23.6% of 1.1282/1.0628) /17 Nov high 1.0568 17 Nov low
1.0695 100 HMA 1.0522 3 Dec 2015 low
1.0660 Minor 1.0500 Minor
1.0648 Session high 1.0462 March 2015 low

Bias                                                                                         

After holding on above the long term rising trend support at around 1.0580 on Monday, the Euro did manage a squeeze to 1.0648 although it has since reversed lower again, to currently sit back at 1.0600, leaving the outlook unchanged.

The 4 hour indicators still recovering from their previous oversold levels and we could see another bounce to the session highs, above which could head on to 1.0680 and possibly back to 1.0700/1.0720. Above this, although unlikely, could then bring about a move towards the 17 Nov high at 1.0745 and even the previous day’s high at 1.0758. The dailies though still point lower, and further Euro weakness looks likely in the sessions ahead and a break of Friday’s low (1.0568) would then head towards the Dec 2105 low at 1.0522 and then possibly to the March 2013 low at 1.0461. As before, trading from the short side and selling into near term strength, with a SL above 1.0745 seems to be the plan.

24 Hour: Becoming Oversold -Prefer to sell rallies

Medium Term: Bearish

Economic data highlights will include:

T: EU Provisional Consumer Confidence, US Existing Home Sales, Richmond Fed Mfg Index, API Weekly Crude Oil Stock Inventory

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 111.10
Resistance Support
112.57 1 April high 110.80 Minor
112.00 Weekly Cloud Base 110.46 Session low
111.88 28 April high 110.00 100 HMA
111.44 30 May high 109.80 Friday low
111.29 (50% pivot of 121.05/98.94)/Session high 109.00 Minor

Bias

The US$Jpy uptrend remains firmly intact and the daily momentum indicators still point higher so, having headed up to a peak, so far, of 111.36,  the next minor resistances are seen at 111.45 and at 111.90, with the next Fibo level not seen until 114.20 (61.8% of 121.05/98.94) although that remains over the horizon at this stage. As with the previous outlook, although the dollar remains strong, the 4 hour momentum indicators are extremely overbought and continue to show a degree of bearish divergence, so some caution is warranted. If we do see a profit-taking dip, minor support will arrive at the 110.46, session low and at Friday’s low at 109.80, below which, would open the way to 109.00 and even back to the 200 Month MA at 108.30, albeit that this looks unlikely in the near term. Buying dips still seems the longer term plan.

24 Hour: Becoming Overbought – Prefer to buy dips

Medium Term:  Bullish

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2491
Resistance Support
1.2700 Minor 1.2455 200 HMA
1.2673 11 Nov high 1.2415 100 HMA
1.2600 Minor 1.2360 Minor
1.2560 Minor 1.2311 Session low
1.2511 Session high 1.2301 18 Nov low

Bias                                                                         

Although Sterling’s move higher on Tuesday seemed to begin on the back of a Stg/Yen buy order, it soared once NY got in after the UK PM had hinted at a transitional Brexit deal and the possibility of a UK corporate tax cut. A quick move from 1.2350 to 1.2511 followed, and we have since consolidated at around 1.2460, holding on to most of the gains. The 4 hour momentum indicators have now turned to look a little more constructive, while further out, the dailies are now flat, suggesting a cautious stance. Above the session high could see Sterling head to the 14 Nov high of 1.2592, and beyond there, towards the mid November high at 1.2673. The downside will now see bids at 1.2400 and then again at the session low, just above 1.2300.Public Sector Net Borrowing Requirements are due today.

24 Hour: Neutral

Medium Term:  Neutral

Economic data highlights will include:

T: PSNBR, CBI Distributive Trends Survey – Orders

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0096
Resistance Support
1.0255 29 Jan high 1.0080 Major descending trend resistance, turned support
1.0223 2 Feb high 1.0074 Session low
1.0193 3 Feb high 1.0055 100 HMA
1.0150 Minor 0.9993/88 17 Nov low/(23.6% of 0.9548/1.0122)/200 HMA
1.0117/22 (76.4% of 1.0327/0.9443) /Friday high 0.9940 Minor

Bias                                                                                                                                16 Nov

US$Chf traded sideways on Tuesday (1.0074/1.0116), once again capped by the major Fibo resistance at 1.0120,  before closing unchanged at 1.0100.

The daily momentum indicators remain constructive and hint that we could head towards 1.0200 and possibly to 1.0250 at some stage,  although in the shorter term the 4 hour charts suggest that we may need some near term consolidation. With the weekly charts seemingly picking up steam though, 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). That is a long way off, and in the meantime on the downside, should we see a healthy correction, then 1.0050/60 will provide support ahead of 1.0000 and then, further out, 0.9900/10. Buying dips remains preferred.

24 Hour: Prefer to buy dips

Medium Term: Bullish

Economic data highlights will include:

Trade Balance

Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7362
Resistance Support
0.7450 Minor 0.7335 Weekly cloud base
0.7435 (23.6% of 7777/0.7330) 0.7310 Session low
0.7410/17 Weekly cloud top/Friday high 0.7288/84 (76.4% of 0.7144/0.7834)/16 June low
0.7400 Minor 0.7217 31 May low
0.7381 Session high 0.7200 (76.4% of 6006/1.1080)

Bias

The Aud squeezed up to 0.7381 in US trade on Monday before drifting back off when  some US$ buying emerged and pushed it back to 0.7345, followed by a mild bounce to close at 0.7360. The 4 hour momentum indicators do look a little more positive so we could yet see another topside squeeze, but selling into short term strength again seems to be the plan, where resistance will now be seen at 0.7385 and 0.7400, with SL to be left on short positions above 0.7435.

With the daily and weekly momentum indicators still pointing lower, further downside pressure would seem to be in store in the days ahead, where a break of 0.7300 should find decent buyers at 0.7285, but below which there is little support to be seen until 0.7217 and below that, at 0.7200. I think we are probably heading there and eventually lower, where distant targets would be at the May low at 0.7145.

24 Hour: Prefer to sell rallies.

Medium Term:  Mildly bearish

Economic data highlights will include:

RBA Asst Governor Kent Speech

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7054
Resistance Support
0.7143/42 14 Nov high/ (38.2% of 0.7400/0.6983) 0.7015/12 200 DMA
0.7110 Minor 0.0.6983 Session low
0.7090 Minor 0.6951 21 July low
0.7075/80 Session high (23.6% of 0.7400/0.6983) 0.6933 (50% pivot of 0.7743/0.7485)
0.7060 Minor 0.6915 (50% pivot of 0.6345/0.7485)

Bias

 After opening on its lows, the Kiwi headed up to a high of 0.7077 before drifting lower again, to finish the day at 0.7050 .The 4 hour momentum indicators hint at the chance of a further topside squeeze and sellers will again arrive at 0.7075 and then at 0.7100/10, which if seen would seem to be be a sell area with a SL placed above 0.7145.On the downside, a break below 0.7000 would quickly head towards 0.6950, below which, decent bids should arrive at 0.6915/35, although if we break 0.6890 there is nothing to hold it up until we reach 0.6830.

In the near term some consolidation could be in order, although I still think the downside will eventually be the direction to concentrate on.

24 Hour: Prefer to sell rallies

Medium Term: Mildly bearish

Economic data highlights will include:

NZ Visitor Arrivals

Meta Trader
NZDUSD: 4 Hour

nzd