24 Nov: Strong US data, FOMC Minutes fuels thoughts of a December rate hike, sending the US$ higher.

By | November 24, 2016

The US$  resumed its strong upside momentum on Thursday after  the October Durable Goods orders jumped strongly, by 4.8% versus expectation of 0.8%, with the Ex-transport orders also  much better than expected at 1.0% versus expectation of 0.1%. US stock indices made yet new all time highs, while the metals remained under pressure from the stronger dollar. With markets having already made their move, the release of the FOMC Minutes saw a relatively muted reaction, but the upshot was that most Fed voters agreed that the case for a rate hike continued to strengthen and said that such a move could well become appropriate ‘relatively soon’.

The coming session will largely be spent reassessing the FOMC Minutes outlook although being a long weekend in the US, both liquidity and interest will be diminished. Japan will have the Nikkei Flash Mfg PMI and Europe gets the Q3 GDP (exp 0.2% qq, 3.2%yy) and the German IFO Business Climate (exp 110.6)/Expectations (exp 106.3) but that is about it and it could end up being a fairly tight session, with the focus being on the “long dollar” trade.

CURRENCIES
EURUSD: 1.0548
Res  1.0585  1.0615  1.0660
Sup  1.0525  1.0500  1.0460
USDJPY: 112.57
Res  112.95  113.35  113.80
Sup  112.00  111.80  111.40
GBPUSD: 1.2444
Res  1.2470  1.2510  1.2555
Sup  1.2410  1.2385  1.2360
USDCHF: 1.0169
Res  1.0180  1.0195  1.0225
Sup  1.0130  1.0065  1.0100
AUDUSD: 0.7386
Res  0.7400  0.7420  0.7445
Sup  0.7370  0.7335  0.7310
NZDUSD: 0.7007
Res  0.7035  0.7060  0.7090
Sup  0.6995  0.6980  0.6950
INDICES / COMMODITIES
S+P: 2199
Res  2204  2210  2220
Sup  2190  2180  2170
DJI: 19033
Res  19045  19100  19150
Sup  19000  18970  18930
ASX SPI: 5487
Res  5500  5520  5540
Sup  5466  5440  5420
GOLD: 1188
Res  1200  1210  1220
Sup  1180  1170  1160
SILVER: 16.38
Res  16.65  16.85  17.00
Sup  16.15  16.00  15.80
OIL (WTI): 47.92
Res  48.50  49.20  49.80
Sup  47.60  47.10  46.40

 

Indices/commodities
S&P Futures 2199
Resistance Support
2225 Minor 2191 22 Nov low/100 HMA
2220 Minor 2180 200 HMA
2215 Minor 2178 21 Nov low
2210 Minor 21602 (23.6% of 2028/2202)
2203 Session high  /All time high 2150 100 DMA

Bias

The S+P did make another all time high today at 2203 and although it has failed to carry on, finishing the day just under 2200, the outlook remains unchanged.

The dailies still look constructive so it would not surprise if do see a test of higher ground in the days ahead, although I would be doubtful of running away to the topside ahead as we head into the Thanksgiving Day long weekend. On the downside, below the 2191 session low will find bids at 2180 and then there is further support at 2160. 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.sp

24 Hour: Neutral Medium Term: Prefer to buy dips
DJI Futures 19033
Resistance Support
19400 Minor 18973 Session low
19300 Minor 18911 22 Nov low
19200 Minor 18832 21 Nov low
19100 Minor 18792 16 Nov low
19045 Session high  /All time high 18755 15 Nov low

Bias

Ditto S+P. The DJI made it up to a new high of 19045 on Wednesday and closed the day nearby.

While the 4 hour indicators still suggest limited upside momentum, the dailies remain positive so buying dips still seems to be the plan.  A cautious stance is required heading into the US holiday but maintaining a core long position does seem to be the preferred strategy.dji

24 Hour: Neutral Medium Term: Prefer to buy dips
ASX SPI 5487
Resistance Support
5590 Minor 5465 Minor
5568 1 August high 5430 Minor
5540 Minor 5405 Session low
5520 Minor 5385 (23.6% of 5029/5500)
5500 Session high 5360 200 HMA

Bias                

The ASX has had another strong session in reaching 5500, and with the dailies picking up momentum further gains in the days ahead would seem to be on the cards. Above 5500 will find little to stop it heading on to the August high of 5568 above which could then see a run towards the August 2015 high at 5671.

On the downside, support will today be seen at 5465 and then again at 5430, with the session low of 5405 currently looking pretty safe.spi

24 Hour: Neutral Medium Term: Mildly bullish
GOLD 1188
Resistance Support
1240 (38.2% of 1337/1181) 1181 Session low /10 Feb low
1233 16 Nov high 1172 (61.8% of 1046/1375)
1218 (23.6% of 1337/1181) 1164 8 Feb low
1210 100 HMA 1157 4 Feb low
1200 Minor 1122 (76.4% of 1046/1375)

Bias

Gold was unable to withstand the dollar’s strength and finally broke below 1200; also taking out the 1190 support and heading on to 1182. With the 4 hour momentum indicators now aligning with the dailies to point lower, a sterner test of 1180 would seem to be on the cards, below which would find bids at 1165/70 and again at 1155 but below which there is little to hold the price up  until 1120.

The topside will find offers at 1200 and then again 1215/20 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 1200/05 area. SL above 1220.gold

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
SILVER 16.38
Resistance Support
17.30 (23.6% of 20.06/16. 48) 16.51/48 21 Nov low/(61.8% of 13.64/21.13)
17.23 16 Nov high 16.43 18 Nov low
17.00 200 HMA 16.23 7 June low
16.85 (23.6% of 18.98/16. 17) 16.00 Minor
16.65 100 HMA 15.81 1 June low

Bias

Silver finally broke lower and reached our initial target of 16.25 by trading down to 16.16 before a mild bounce. Further losses seem to be in store, and a test of 16.00 seems likely, below which would allow a run towards 15.80 and potentially to 15.40. Short term rallies should again be limited to 16.65, possibly 16.85, which if seen would now appear to be a decent sell area, with a SL placed above 17.00.silver
24 Hour: Prefer to sell rallies Medium Term:  Mildly bearish
OIL (WTI) 47.92
Resistance Support
51.50 Minor 47.15 22 Nov low
50.90 25 Oct high 46.70 100 HMA
49.80 (76.4% of 52.19/42.18) 46.44 (38.2% of 42.18/45.49.17) /Monday gap low
49.17 22 Nov high 46.00 100 DMA
48.40 Session high 45.15 18 Nov low

Bias

WTI has had a choppy, sideways session leaving the outlook unchanged.

While the dailies remain positive, the 4 hour momentum indicators have turned sharply lower following the strong rejection of the Monday rally to 49.17, so a cautious stance is warranted. As with yesterday, buying dips, towards 47.00, is mildly preferred, with a SL placed at around 46.70. wti

24 Hour: Prefer to buy dips Medium Term: Mildly bullish

EURUSD: 1.0548
Resistance Support
1.0710 (23.6% of 1.1282/1.0525) /17 Nov high 1.0525/22 Session low/3 Dec 2015 low
1.0657 22 Nov high 1.0500 Minor
1.0615 100 HMA 1.0462 March 2015 low
1.0600 Minor 1.0400 Minor
1.0580 Minor 1.0335 Minor

Bias                                                                                         

€/Usd was choppy in Europe, trading within a tight 1.0600/43 range. Once the US got in the dollar took off following the strong Durable Goods Orders, sending the Euro below the 1.0570/80 support, and which has since headed to a session low of 1.0525, pulling up at the December 2015 low. The 4 hour indicators have again turned to point lower, backing up the negative look of the daily charts, and below 1.0525 would open the way to the March 2013 low at 1.0461. Below there, there is very little to hold the Euro up ahead of 1.0300 and then again, not a lot until we reach parity. As before, trading from the short side and selling into near term strength, seems to be the plan, with resistance levels now seen at 1.0580, 1.0600 and at 1.0615. Selling into these areas with a SL placed above 1.0660 is the preferred strategy.

24 Hour: Becoming Oversold -Prefer to sell rallies

Medium Term: Bearish

Economic data highlights will include:

US Thanksgiving Day, German Q3 GDP, German IFO Business Climate/Expectations

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 112.57
Resistance Support
114.20 (61.8% of 121.05/98.94) 112.00 Minor
114.00 Minor 111.80 Weekly cloud base
113.80 29 March high 111.40 Minor
113.35 Minor 111.00 Minor
112.96 Session high 110.80 100 HMA

Bias

The strong Durable Goods Orders has propelled US$Jpy strongly higher, with the pair reaching 112.96 before finding any selling interest, which has caused a minor pullback.

The daily momentum indicators still point higher and above 113.00, the next Fibo level is seen at 114.20 (61.8% of 121.05/98.94) beyond which, we could see a run towards 116.00 and even to 117.80 (76.4% of 121.05/98.94) As before, although the dollar remains strong and maintaining a core long dollar position seems desirable,  the 4 hour momentum indicators are still overbought and continue to show a degree of bearish divergence so some caution is warranted as a correction could happen at any time and it could be quite a sharp one.  If we do see a profit-taking dip, minor support will arrive at 112.00/111.80, at 111.30/40, with the first Fibo support not seen until 110.20, albeit that this looks unlikely to be seen again in the near term.  With the Thanksgiving holiday now upon us, it may be a quieter day ahead as we take stock of the latest sharp rise.

24 Hour: Becoming Overbought – Prefer to buy dips

Medium Term:  Bullish

Economic data highlights will include:

Nikkei Flash Mfg PMI

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2444
Resistance Support
1.2673 11 Nov high 1.2410 100 HMA
1.2600 Minor 1.2385 Minor
1.2560 Minor 1.2360 Session low
1.2511 22 Nov high/21 Nov high 1.2325 Rising trend support
1.2468 Session high 1.2301 18 Nov low

Bias                                                                         

Sterling remains choppy and but managed to make a stand against the dollar’s latest rally and has climbed from the session lows of 1.2360 to finish near the day’s high of 1.2468.

The 4 hour momentum indicators are flat, as are the dailies, suggesting a cautious stance is needed ahead of what looks likely to be another choppy session, but if the US$ rally continues Cable will find it hard to make too much positive headway. If wrong, above the session high could then head to the 1.2510, 22 Nov high, above which could then see Sterling head to the 14 Nov high of 1.2592, and beyond that, towards the mid November high at 1.2673. The downside will again see bids at 1.2360 and then again at various levels down to 1.2300, below which could then see another run towards 1.2245/50. Overall, a choppy sideways session would not really surprise.

24 Hour: Neutral

Medium Term:  Neutral

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0169
Resistance Support
1.0130 Minor
1.0255 29 Jan high 1.0100 100 HMA
1.0223 2 Feb high 1.0060 18 Nov low
1.0193 3 Feb high 1.0030  (23.6% of 0.9548/1.0091)
1.0181 Session high 1.0000 Minor

Bias                                                                                                                                16 Nov

US$Chf has performed well on Wednesday in heading up to a high of 1.1082, settling the end of the US session nearby.

The daily momentum indicators still look constructive and hint that we could head towards 1.0200 and possibly to 1.0250 at some stage. The shorter term the 4 hour charts suggest that we may need further, near term consolidation although they are also pointing towards the chance of further gains, so trading from the long side still seems to be the deal. 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). That is a long way off, and in the meantime, on the downside, support will be seen at 1.0100/20 and then at 1.0030 and at 1.0000. Buying dips remains preferred.

24 Hour: Prefer to buy dips

Medium Term: Bullish

Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7386
Resistance Support
0.7488 (38.2% of 7777/0.7310) 0.7372 Session low
0.7460 200 HMA 0.7361 22 Nov low
0.7444 Session high 0.7335 Weekly cloud base
0.7435 Minor 0.7310 21 Nov low
0.7420 Minor 0.7288/84 (76.4% of 0.7144/0.7834)/16 June low

Bias                               

The Aud squeezed up to 0.7444 in late Asian trade but then reversed, moving sharply lower after the  US Durable Goods Orders, in trading down to 0.7372 before finding any balance.

The 4 hour momentum indicators have run out of steam on the topside and look neutral so a cautious stance is required today, but the daily and weekly momentum indicators still point lower so further downside pressure would seem to be in store in the days ahead, where a break of minor support at 0.7360 could then head towards 0.7335 and then to 0.7300/10. Under there 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, although that will be for another day. On the topside, 0.7410/20 will provide intraday resistance ahead of the 0.7445/50 area although I don’t think we are heading back up here in the next 24 hours.

24 Hour: Prefer to sell rallies.

Medium Term:  Mildly bearish

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7007
Resistance Support
0.7143/42 14 Nov high/ (38.2% of 0.7400/0.6983) 0.6993 Session low
0.7110 Minor 0.6983 21 Nov low
0.7090 Minor 0.6951 21 July low
0.7080/85  (23.6% of 0.7400/0.6983)/22 Nov high 0.6933 (50% pivot of 0.7743/0.7485)
0.7060 Minor 0.6900 Minor

Bias

The Kiwi squeezed up to 0.7060 in late Asian trade but then reversed, moving sharply lower after the  US Durable Goods Orders in trading down to 0.6994 before finding any balance and finishing the day back at just above 0.7000.

The 4 hour momentum indicators have now turned to point lower and seem to be aligning themselves with the dailies and weeklies so the downside does seem to be the focus again. A break below the session low would find bids at 0.6985 below which would open the way to 0.6950 beneath which, decent bids should arrive at 0.6935. If we break 0.6890 there is nothing to hold it up until we reach 0.6830 although this seems unlikely to be seen for a while. On the topside, resistance will be seen at 0.7040, and above there at 0.7060 and at 0.7085, which if seen would seem to be a sell area with a SL placed above 0.7100.As with yesterday, in the short 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
Meta Trader
NZDUSD: 4 Hour

nzd