28 Nov: A big week ahead. OPEC, US GDP & Unemployment data in focus. Draghi speaking today.

By | November 28, 2016

The dollar ended the week mixed in thin holiday trading conditions as traders await key economic calendar due in the coming week. In terms of data, Friday saw the US trade deficit fall to US$ -62.0b in October, worse than expectation of US$ -59.2b while the UK Q3 GDP was left unrevised at 0.5% qq. The main interest on Friday was in the oil market which fell more than 2%, dragged down by uncertainty over whether OPEC will be able to reach an output deal after Saudi Arabia said it will not attend talks on Monday with non-OPEC producers to discuss supply cuts.

While the week might start with a reasonably empty calendar, things will heat up as we head towards Friday’s US Jobs report for November. Monday will be thin, with Mario Draghi being the key focus when he speaks later in the session. Tuesday will focus on the German CPI (exp 0.1% mm, 0.9% yy, HICP; exp 0.1%mm/0.8%yy) and the US Provisional Q3 GDP (exp 3% annualised). Wednesday will be action packed, with the oil price likely to be in focus due to the OPEC Meeting, while there is also plenty of data to come from both the EU (CPI) the US (ADP Jobs data (exp +160K), Personal Consumption/Expenditure/Income/Spending). Thursday will see the global Mfg PMIs but the main event will be the Jobs/NFP/Average Hourly Earnings data, due on Friday (exp 4.9%, +174K, 0.3%).

CURRENCIES
EURUSD: 1.0581
Res  1.0630  1.0660  1.0700
Sup  1.0560  1.0515  1.0460
USDJPY: 113.00
Res  113.55  113.85  114.20
Sup  113.00  112.55  112.10
GBPUSD: 1.2476
Res  1.2495  1.2510  1.2555
Sup  1.2445  1.2415  1.2375
USDCHF: 1.0130
Res  1.0195  1.0225  1.0250
Sup  1.0145  1.0065  1.0100
AUDUSD: 0.7434
Res  0.7460  0.7480  0.7500
Sup  0.7420  0.7405  0.7390
NZDUSD: 0.7040
Res  0.7060  0.7085  0.7110
Sup  0.7025  0.7000  0.6970
INDICES / COMMODITIES
S+P: 2211
Res  2214  2220  2230
Sup  2200  2190  2180
DJI: 19146
Res  19150  19200  19250
Sup  19090  19015  18975
ASX SPI: 5514
Res  5526  5540  5568
Sup  5500  5486  5470
GOLD: 1184
Res  1190  1200  1210
Sup  1180  1170  1160
SILVER: 16.48
Res  16.60  16.70  16.85
Sup  16.15  16.00  15.80
OIL (WTI): 45.93
Res  46.60  47.10  47.90
Sup  45.15  44.85  44.40

 

Indices/commodities
S&P Futures 2211
Resistance Support
2230 Minor 2202 Friday Low
2225 Minor 2191 23 Nov low
2220 Minor 2183 200 HMA
2215 Minor 2178 21 Nov low
2211 Friday high 2164 (23.6% of 2028/2207)

Bias

In thin holiday conditions on Friday the S+P managed another all-time high reaching 2211, closing on its highs and seemingly suggesting that the grind higher is set to continue.

As before, the dailies still look positive so it would not surprise if do see a test of higher ground in the days ahead, although the 4 hour charts do show a degree of bearish divergence so some caution is required, and ahead of Fridays US Jobs data we may be in for some consolidation. On the downside, back under 2200 will find bids at 2191 (23 Nov low), beneath which will find bids at 2180 and again at 2165. 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 19146
Resistance Support
19500 Minor 19089 Friday Low
19400 Minor 19015 100 HMA
19300 Minor 18973 23 Nov low
19200 Minor 18911 22 Nov low
19146 24 Nov high   /All time high 18832 21 Nov low

Bias

Ditto S+P. The DJI made a new all-time high of 19146 on Friday, closing on the highs, suggesting more of the same in the days ahead

The dailies remain positive so buying dips still seems to be the plan although a cautious stance is required while the 4 hour indicators do show a degree of bearish divergence. Maintaining a core long position does seem to be the preferred strategy while waiting on Friday’s NFP figure.dji

24 Hour: Neutral Medium Term: Prefer to buy dips
ASX SPI 5520
Resistance Support
5630 Minor 5500 Minor
5590 Minor 5483 Friday Low
5568 1 August high 5476/70 24 Nov low /100 HMA
5540 Minor 5430 100 HMA
5527 Friday high 5405 23 Nov low/ (23.6% of 5029/5527)/200 HMA

Bias                

The ASX had a positive end to the week, heading up to a high of 5527, before closing at 5520. Further gains will find little to stop the SPI heading on to the August high of 5568, which should be strong resistance but beyond which could see a run to 5600 and above, and then we could then see a run towards the August 2015 high at 5671.

On the downside, if we head back below 5500, support will be seen at the Friday low of 5483 and then again at 5465 and at 5430. Buying dips is preferred.spi

24 Hour: Neutral Medium Term: Mildly bullish
GOLD 1184
Resistance Support
1233 16 Nov high 1171 Friday Low / (61.8% of 1046/1375)
1220 (23.6% of 1375/1270) 1164 8 Feb low
1210 (23.6% of 1337/1170)/200 HMA 1157 4 Feb low
1200 100 HMA 1122 (76.4% of 1046/1375)
1193 Friday high 1110 Minor

Bias

Gold fell through the 1180 support on Friday and headed quickly to the next area of interest, reaching 1170 before a bounce, to close the week at 1183.

With the 4-hour momentum indicators aligning with the dailies to point lower another test of 1170 is possible although some bullish divergence is now appearing on the 4 hourlies so some caution is warranted. Below 1170 would find bids at 1155, but below which there is little to hold the price up until 1120.

The topside will again find offers at 1190, 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 16.48
Resistance Support
17.23 16 Nov high 16.16 Friday Low/23 Nov low
17.00 Minor 16.00 Minor
16.85 (23.6% of 18.98/16. 17) 15.81 1 June low
16.70 200 HMA 15.50 Minor
16.58 Friday high 15.38 (76.4% of 13.64/21.13)

Bias

Silver was again rangebound on Friday (16.16/58), leaving the outlook unchanged.

In the short term, as with Gold, the 4 hour charts are showing some bullish divergence and some caution is warranted early in the week, but further out deeper losses seem to be in store and a test of 16.00 seems likely at some stage, below which would allow a run towards 15.80 and potentially to 15.40. On the topside, above Friday’s high of 16.58, resistance will be seen 16.65, and again at 16.85, which if seen would now appear to be a decent sell area, with a SL placed above 17.00. A break of 17.00 could see a return to 17.40 although this seems unlikely at this stage.silver

24 Hour: Prefer to sell rallies Medium Term:  Mildly bearish
OIL (WTI) 45.93
Resistance Support
48.40 76.4% of 49.17/45.86 45.86 Friday Low/100 DMA/100 WMA
47.90 61.8% of 49.17/45.86 45.15 18 Nov low
47.50 50% pivot of 49.17/45.86 44.85/90 61.8% of 42.18/49.17/200 DMA
47.10 38.2% of 49.17/45.86 40.40 Minor
46.60 23.6% of 49.17/45.86 43.80 76.4% of 42.18/49.17

Bias

WTI had a tough day on Friday, falling hard following the news that Saudi Arabia had told OPEC producers that it will not attend talks on Monday with non-OPEC producers to discuss limiting supply as it wants to focus on having consensus within OPEC first. The Monday gathering takes place ahead of Wednesday’s official OPEC Meeting, the result of which will likely define the oil price heading into 2017.

Having broken down through the 47.00 support on Friday, WTI did head sharply lower as we expected it might and reached 45.85 before finding some decent bids at the 100 WMA/200 DMA, although it closed on its lows and does not look healthy at the start of the week. The dailies are yet to turn lower and the current support may hold the price up but the 4 hour charts do hint at a move towards back to the 200 DMA(44.90) and possibly to 44.00/50 although any such move would depend on a negative outcome from the OPEC Meeting.

On the topside, offers will now be seen at various minor Fibo levels all the way back up to the recent trend high of 49.17. At some stage, selling into rallies seems to be the play, although all will depend on the outcome of the OPEC gathering and until then a cautious stance is required. Note that in the longer term, weekly, chart below, the potential for a reverse head and shoulders, which if OPEC ever get their act together could see the price of oil rise sharply. The neckline of the head shoulder is at 51.20, a break of which would have an objective of 82.00. Don’t get excited, but worth keeping in the back of your mind.wti

24 Hour: Mildly bearish Medium Term: Neutral

EURUSD: 1.0581
Resistance Support
1.0745 17 Nov high 1.0560 Minor
1.0703/10 (23.6% of 1.1282/1.0517) /17 Nov high 1.0537 Friday Low
1.0657 22 Nov high 1.0517 24 Nov low/3 Dec 2015 low
1.0627 200 HMA /Friday high 1.0500 Minor
1.0615 Minor 1.0462 March 2015 low

Bias                                                                                         

The Euro traded with a slightly firmer bias to finish the week in thin holiday conditions, climbing to a high of 1.0627 but, unable to carry on a late slide saw it finish back at just below 1.0600.

A cautious stance is required at the beginning of this week and the short-term momentum indicators are currently neutral. The dailies still point lower but may be attempting to from a base, and for Monday, a rangebound day may be in store with any direction likely to be driven by Mario Draghi. Further downside momentum would find decent bids at the 1.0517/20 lows seen last Thursday, below which would open the way to the March 2013 low at 1.0461 although that seems unlikely to be seen early in the week. 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.

On the topside, resistance will now be seen at Friday’s high, above which could then carry on to the 1.0657, 22 November high. A break of that would allow a run towards 1.0700, which given the ongoing demand for dollars would seem to be an area to sell into, with a SL placed above 1.0750. It could end up being a fairly range bound week as we wait on Friday’s US Jobs/NFP/Average Hourly Earnings, and I would not be looking for too much of a directional move until then, although tomorrow’s Q3 US GDP could provide some action.

24 Hour: Mildly bullish   -Prefer to sell rallies Medium Term: Bearish

Economic data highlights will include:

M: German Import Price Index, EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, ECB Governor, Mario Draghi Speech

T: German CPI, US Provisional Q3 GDP, Case Shiller House Price Index, Consumer Confidence, API Weekly Crude Oil Stock Inventory

W: OPEC Meeting, German Retail Sales, Unemployment, EU Provisional CPI (Nov), US ADP Jobs data, US Personal Consumption/Expenditure, Personal Income/Spending, Chicago Purchasing Managers Index, Pending Home Sales, EIA Crude Oil Stocks Weekly Change, Beige Book

T: EU Manufacturing PMIs, Unemployment, ISM Mfg PMI/Prices Paid, Construction Spending, Total Vehicle Sales, EIA Crude Oil Stocks Weekly Change

F: EU PPI, US Jobs/NFP/Average Hourly Earnings data, ISM NY Index

Meta Trader
EURUSD: 4 Hour

euroeuro1


USDJPY: 113.00
Resistance Support
114.60 100 DMA 113.00 Minor
114.20 (61.8% of 121.05/98.94) 112.54 Friday Low
114.00 Minor 112.10 Minor
113.89 Friday high 111.35 Minor
113.45 Minor 110.85 (23.6% of 101.18/103.89)

Bias

Having made a new trend high of 113.89 in Asia on Friday, US$Jpy then dipped to 112.55 before recovering to finish the week at 113.00 with US/Japan yield spreads and a rampant US stock market seen as providing support into any weakness as risk sentiment continues to improve.

The daily momentum indicators still point higher, and above 113.50/55 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 extremely overbought so some caution is warranted as further corrections could happen, where below Friday’s low, the next realistic support is not seen until 110.85. Watch out for the OPEC result and the NFP figure this week which will be key drivers along with the yield spread and the direction of stocks.

24 Hour: Becoming Overbought – Prefer to buy dips Medium Term:  Bullish

Economic data highlights will include:

M: Retail Trade

T: Japan Unemployment

W: Capital Spending, Industrial Production, Housing Starts, Construction Orders

T: Foreign Bond/Stocks Investment, Nikkei Mfg PMI

F:

Meta Trader
USDJPY: 4 Hour

yenyen-1


GBPUSD: 1.2476
Resistance Support
1.2600 Minor 1.2415 Friday Low
1.2560 Minor 1.2401 24 Nov low
1.2511 22 Nov high/21 Nov high 1.2375 Rising trend support
1.2491 24 Nov high 1.2360 23 Nov low
1.2476 Friday high 1.2301 18 Nov low

Bias                                                                         

Cable had another choppy, sideways session on Friday (1.2415/80), leaving the outlook unchanged.

The 4-hour momentum indicators are still flat, as are the dailies, suggesting a cautious stance is needed ahead of what looks likely to be another choppy session on Monday. Above the minor resistance at 1.2480/90 and the 21/22 Nov high of 1.2511 could then see Sterling head to the 14 Nov high of 1.2592, and beyond that, towards the mid November high at 1.2673 although further dollar strength would curb any upside momentum unless there is some positive Brexit news, which seems unlikely while the bickering seems to be on the rise. Back below 1.2400, the downside will again see bids at the rising trend support, now at 1.2375 and then again at various levels down to 1.2300, below which could then see another run towards 1.2245/50. Overall, another choppy sideways session would not really surprise, with OPEC, the NFP and Brexit to be the key drivers this week.

24 Hour: Neutral Medium Term:  Neutral

Economic data highlights will include:

M:

T: UK Consumer Credit, Financial Stability Report

W:

T: UK Manufacturing PMI

F: UK Construction PMI

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0130
Resistance Support
1.0327 27 Nov 2015 high 1.0150 Minor
1.0307 2 Dec  2015 high 1.0104 Friday Low
1.0255 29 Jan high 1.0060 18 Nov low
1.0223 2 Feb high 1.0030  (23.6% of 0.9548/1.0091)
1.0193/91 3 Feb high/24 Nov high 1.0000 Minor

Bias                                                                                                                                16 Nov

US$Chf had a bit of a dip, to a low of 1.0104 on Friday, but recovered to finish the week at 1.0150.

The daily momentum indicators still look constructive and hint that we could see a sterner test of 1.0200 and possibly to 1.0250 at some stage. The shorter term the 4 hour charts though, suggest that we may need further near term consolidation and they are beginning to show a degree of bearish divergence so some caution is warranted today. If we do see a dip, then back below Friday’s low could see a move back to 1.0060 and possibly to 1.0030, although any such decline would seem to offer a buying opportunity. As we said last week, 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 1.0100/05 and then at 1.0060, 1.0030 and at 1.0000. Buying dips remains preferred.

24 Hour: Bearish divergence – Prefer to buy dips Medium Term: Bullish
Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7434
Resistance Support
0.7542 (50% of 7777/0.7310) 0.7420 200 HMA
0.7500 Minor 0.7405 100 HMA
0.7488 (38.2% of 7777/0.7310) 0.7385 Minor
0.7467 Friday high 0.7363/61 24 Nov low/22 Nov low
0.7450 Minor 0.7335 Weekly cloud base

Bias                               

The Aud had an underlying bid tone all day on Friday, squeezing sharply higher in early London trade, reaching 0.7467 on the back of a slightly softer US$ before drifting lower to finish the week at 0.7440 as the US$ found new legs.

The 4-hour momentum indicators look neutral, possibly slightly positive, so a cautious stance is required today and it seems that we are currently trading within an upward sloping channel, with parameters at 0.7390/0.7485, so use this as a guide. The dailies appear to be flattening out, adding to the cautious tone at the start of the week but the weekly momentum indicators still point lower, so further downside pressure would seem to be in store at some stage in the days ahead, where, back below the 0.7390/0.7400 channel base, a break of the support at 0.7360 could then head towards 0.7335 and then to 0.7300/10. Under there should find decent buyers at 0.7290, 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, 0.7465/70 will again provide intraday resistance ahead of the 0.7490, where I would be looking to sell the Aud, with a SL place above 0.7510 or ideally above 0.7550. While stock markets remain firm; underpinning risk sentiment, the downside for the Aud looks a little limited, but any sudden turnaround could then potentially see a sharp selloff.  As before, note that the Iron Ore price is still strong, at $US 75 per tonne, and will likely help to support the $Aud.

24 Hour: Prefer to sell rallies. Medium Term:  Prefer to sell rallies

Economic data highlights will include:

M:

T:

W: HIA New Home Sales, Private Sector Credit, Building Permits

T: AIG Performance of Mfg index, Private Capital Expenditure (Q3), China Mfg/Non Mfg PMI, Caixin China Mfg PMI

F: MYEFO, Retail Sales (Oct)

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7040
Resistance Support
0.7135 (38.2% of 0.7400/0.6983) 0.7000 Minor
0.7107 17 Nov high 0.6983 Friday Low
0.7080/85  (23.6% of 0.7400/0.6983)/22 Nov high 0.6971 24 Nov low
0.7061 Friday high 0.6951 21 July low
0.7040 200 DMA 0.6933 (50% pivot of 0.7743/0.7485)

Bias

As with the Aud, the Kiwi had an underlying bid tone all day on Friday, squeezing higher inearly London trade, reaching 0.7062 before drifting lower to finish the week at 0.7040.

The 4 shorter term momentum indicators look neutral and the dailies are also flattening out, suggesting some near-term consolidation although the weeklies still favour an eventual move to the downside. Support will today be seen at 0.7000 and at Friday’s low of 0.6983, but a break below 0.6970 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, back above 0.7060/65, resistance will be seen at 0.7085, which if seen would seem to be a sell area with a SL placed above 0.7100

As before, some consolidation could be in order today although I still think the downside will eventually be the direction to concentrate on. The RBNZ Governor, Wheeler, will be talking tomorrow and the RBNZ Financial Stability Report is due Wednesday, which will be key this week ahead of Friday’s US Jobs data.

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish

Economic data highlights will include:

M:

T: RBNZ Governor Wheeler Speech

W: RBNZ Financial Stability Report, Building Permits (Oct)

T: Terms of Trade Index(Q3)

Meta Trader
NZDUSD: 4 Hour

nzdnzd1