28 Oct: US$ remains firm despite mixed data. Provisional Q3 US GDP in focus today.

By | October 27, 2016

The US dollar is generally a bit firmer on Thursday without doing too much against its major counterparts, with the exception of the Yen, which has seen the dollar head to new 3 month highs. The US data was mixed, with the Initial jobless claims falling 3k to 258k, while continuing claims dropped -15k to 2.04m. Durable goods orders dropped by   -0.1% in September, below expectation of +0.1%, although the Ex-transport orders rose 0.2%, in line with consensus. September Pending Home Sales beat expectations, coming in at 1.5% (exp 1.2%).

Friday will get under way with the release of the NZ Business Confidence for October, the Australian New Home Sales and the Q3 PPI, while from Japan comes the CPI (Oct)and Unemployment  data (Sept). Later on, from the EU we get the German CPI (exp 0.1% mm, 0.7% yy; HICP: exp 0.1% mm, 0.6 %yy), Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate. Finally, from the US we get the Provisional Q3 GDP (exp 0.1%mmp), the Personal Consumption/Expenditure figures and the Rts/Michigan Consumer Sentiment Index (exp 88.1). With the FOMC and the US election around the corner, expect it to be fairly rangebound for much of the day, and with month end approaching liquidity will be thinner than normal. Have a good w/e.

CURRENCIES
EURUSD: 1.0896
Res  1.0945  1.0970  1.1000
Sup  1.0875  1.0850  1.0820
USDJPY: 105.25
Res  105.35  105.60  105.80
Sup  105.00  104.80  104.40
GBPUSD: 1.2167
Res  1.2230  1.2270  1.2335
Sup  1.2150  1.2100  1.2050
USDCHF: 0.9937
Res  0.9960  0.9985  1.0000
Sup  0.9905  0.9880  0.9850
AUDUSD: 0.7584
Res  0.7600  0.7630  0.7645
Sup  0.7580  0.7560  0.7535
NZDUSD: 0.7119
Res  0.7135  0.7165  0.7185
Sup  0.7105  0.7080  0.7060
INDICES / COMMODITIES
S+P: 2125
Res  2140  2150  2160
Sup  2120  2110  2100
DJI: 18088
Res  18150  18200  18250
Sup  18065  18000  17965
ASX SPI: 5281
Res  5306  5330  5360
Sup  5280  5250  5220
GOLD: 1269
Res  1276  1282  1292
Sup  1260  1250  1242
SILVER: 17.63
Res  17.75  17.90  18.00
Sup  17.55  17.50  17.40
OIL (WTI): 49.59
Res  50.05  50.95  51.60
Sup  48.85  47.65  47.00

 

Indices/commodities
S&P Futures 2125
Resistance Support
2180 Minor 2124/3 26 Oct low/21 Oct low
2172/74 22 Sept high/(76.4% of 2191/2120) 2120/17 18 Oct low /17 Oct low
2160 11 Oct high 2107/06 14 Oct low  /9 Sept low
2150/49 Minor descending trend resistance/25 Oct high 2100 (23.6% of 1847/2191)
2137/36 100 DMA /Session high 2075 200 DMA

Bias                                                                                                           

Another day, another choppy but sideways session (2126/43), adding nothing new. Out of choice, I prefer to be short rather than long, but not overly convinced.

The momentum indicators remain flat, so a neutral stance is again required although, as before, with the increasing chance of a Fed rate hike I prefer to err on the side of selling into rallies. The 100 DMA (2137) looks as though it will continue to act as a pivot and another move to the topside would again find sellers at 2145/50. Above 2155 may see a squeeze towards 2170 although in the near term this seems a little unlikely and the choppy conditions look set to persist. On the downside, below 2120 will find buyers at the strong support at 2105/10. A break of this area could see a quick run below 2100 towards the 200 DMA at around 2070 albeit that this is some way off right now.S+P

24 Hour: Mildly bearish Medium: Prefer to sell rallies   
DJI Futures 18088
Resistance Support
18445 (76.4% of 18622/17880) /Descending trend resistance 18063 Session low
18336 (61.8% of 18622/17880) 17972/65 18 Oct low/21 Oct low
18273 11 Oct high 17867 13 Oct low
18181 Session high 17790 (50% of 16957/18622)/(23.6% of 15163/18622)
18150 26 Oct high /100 DMA 17590 (61.8% of 16957/18622)/200 DMA

Bias

Ditto S+P. The DJI is again settling the day at the 18100 level (18063/18181), with the topside once again pretty much capped by the 100 DMA (18150).

As before, while I prefer to be structurally short, the near term momentum indicators suggest that it may be a little too early for any real downside momentum and more of the same sideways choppy action looks likely. On the topside, a daily close above the 100 DMA (18150)  would suggest a continuation of the choppy sideways trade within the 18000/350 area and would delay any hope of increased downside momentum and means the DJI is probably best left alone, or used as a range trade. Any decent rally though would appear to be a sell opportunity, looking for an eventual move below the 17970 support area and on towards the 13 Oct, 17867 low, and then further out towards 17800, and possibly 17600. In the meantime, the 17960/80 area seems to offer reasonable support.DJI

24 Hour: Mildly bearish Medium Term: Prefer to sell rallies
ASX SPI 5281
Resistance Support
5367 100 DMA 5285/80 200 WMA/(61.8% of 5152/5488)
5344 Session high 5260 Rising trend support
5330 Minor 5249 Session low
5315 Minor 5230 200 DMA/(76.4% of 5152/5488)
5305 (23.6% of 5388/5249) 5219 15 Sept low

Bias            

The ASX took a dive following the release of the strong CPI data yesterday on the basis that the RBA will not be cutting grates any time soon. The SPI headed quickly down to reach a session low of 5249, taking out the 5260 target (rising trend support) in the process.

The hourlies are recovering from having become oversold and some short term consolidation may be in store but further out the momentum indicators are pointing lower so I don’t think we have seen the lows yet and below 5260 would allow a run towards 5230 and towards 5200. In the near term the 200 WMA at 5285 may be a bit of a pivot.  On the topside, back above current levels will find offers at 5300 and at 5330, above which we could head to 5365 (100 DMA), which should be strong but looks unlikely to be bothered today. Structurally, I still prefer to sell into strength, looking for an eventual run below 5260 level for an eventual look at 5200.SPI

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
GOLD 1269
Resistance Support
1305 (61.8% of 1343/1240) 1267 200 DMA
1300 Minor 1262/1 25 Oct low/19 Oct low/24 Oct low
1292 (50% of 1343/1240) 1254 18 Oct low
1280 200 WMA/ (38.2% of 1343/1240) 1246 14 Oct low
1277/7 25 Oct high/5 Oct high 1240 7 Oct low/(76.4% of 1199/1375)

Bias                              

Gold had another tight session, unable to overcome the recent high at 1277 (1272/65) and leaving little room for any interesting trade

If we see a return to the topside, 1277/80 will again see offers, above this could see a run to 1290/1300, although this currently looks unlikely.

On the downside, 1260/65  still provides support  ahead of 1250 and the recent low at 1246, below which, the next downside target would allow another run towards 1240. This should again be strong, but below which there is not much to prop it up until 1210. Right now there are better things to trade and Gold is probably best left alone, as we could well continue the current sideways action, using the 200 DMA (1267) as a pivot.Gold

24 Hour: Neutral-Prefer to sell rallies Medium Term: Looking for eventual downside move
SILVER 17.63
Resistance Support
18.56 (50% of 20.06/17.10) 17.45 24 Oct low
18.38 29 Aug low 17.39 21 Oct low
18.23 (38.2% of 20.06/17.10) 17.30 14 Oct low/200 DMA
18.05 (23.6% of 21.13/17.10) 17.10 7 Oct low/(76.4% of 15.81/21.13)
17. 87 24 Oct high 16.93 9 June low

Bias                                                                                                 

 

As with Gold, Silver had another tight session (17.55//72) finishing in the middle of the range, leaving the outlook unchanged.

The shorter term momentum indicators are flat, suggesting further consolidation, but  if 17.85/90 can be taken out we may see a run to 18.00, above which would see a squeeze towards previous support – now resistance – at the August low at 18.38. In the longer term, with the prospect of a stronger dollar, I prefer to be structurally short, looking for an eventual downside break, albeit probably not yet as the dailies are now turning slightly more positive and appear to be losing a little of their potential downside momentum, so it maybe that we continue the current choppy, sideways trade this week. If we do head lower though, we may yet see a return to test the downside targets, which will initially be at the 200 DMA (17.35) and then at the Fibo support at 17.10, but below which could see a run towards 16.50. A sustained retest of the downside looks unlikely in the near term and further choppy sideways trade seems to be the most likely outcome. Silver

24 Hour: Neutral Medium Term: Looking for eventual downside move
OIL (WTI) 49.59
Resistance Support
52.19 19 Oct high 48.85 26 Oct low
51.60 Minor 48.65 (38.2% of 42.98/52.19)
50.95/51.00 24 Oct high/21 Oct high 47.60 (50% pivot of 42.98/52.19)
50.35 200 HMA 47.02 30 Sept low/H/S Neckline
50.03 Session high 46.50 (61.8 of 42.98/52.19)

Bias

WTI has had a tight 49.00/50 range leaving the outlook unchanged.

A cautious stance is again required as the Monday are mixed, suggesting further choppy sideways trade for the session ahead, although the US data may provide something more directional. On the downside, below the 48.98 session low, we could then see a return to 48.20/50 and possibly to 47.00 although at this stage this would appear doubtful.

On the topside, we need to regain the 26 Oct high of 50.07 in order to allow another test of the resistance at 50.95/51.00. Above this will find further sellers at around 51.50/60, beyond which could see us back at the Wednesday high at 52.19, a break of which will not find too much resistance  too stop it from heading towards the Fibo resistance level seen at 53.90 although this now looks a little unlikely right now. As I said before, the bigger picture appears to point towards a reverse head shoulder move, so in the longer term I still err on the side of buying dips if we see the price head back towards 47.00/48.00. If the head/Shoulder move proves correct, the longer term objective is going to be around 57.00. It would take a break back below the neckline, now at 47.00 to negate the head/shoulder theory, so until then the longer term strategy is to cautiously buy the dips.WTI

24 Hour: Neutral Medium Term: Prefer to buy dips

EURUSD: 1.0896
Resistance Support
1.1070 Weekly cloud base 1.0874 26 Oct low
1.1038 20 Oct high/(38.2% of 1.1326/1.0858) 1.0821 10 March low
1.1000 Minor 1.0800 Minor
1.0970 (23.6% of 1.1326/1.0858) 1.0775 (76.4% of 1.0775/1.1616)
1.0941/45 200 HMA /26 Oct high / Descending trend resistance 1.0710 5 Jan low

Bias

The Euro made another attempt at the topside on Thursday, reaching 1.0941, but again failing at the 200 HMA/descending trend resistance, and reversing to the daily lows of 1.0881 before settling at 1.0900.

The shorter-term momentum indicators are mixed and thus it could be another choppy session ahead but the 4 hourlies do hint that we could see another squeeze to the topside, to where 1.0940/50 will again provide the resistance ahead of 1.0970. As before, selling into this strength may be an idea although a break of 1.0970 could bring about a stronger rally towards 1.1000, and if this does happen it would be little surprise. If so, once again, looking to sell into the strength would seem to be the plan, with a SL placed above 1.1040 or ideally above 1.1070.   Above here could see a steeper reversal towards 1.1040. On the downside, support will be seen at 1.0850 below which would seem to open the way to the March low at 1.0821. Under here there is again only minimal support until 1.0775 and then again, little until the 2016 low at 1.0710 (Jan 5).  The dailies suggest that it will be the downside that eventually remains in focus and trading from the short side, selling into near term rallies seems to be the ongoing plan while keeping SL above 1.0970.

24 Hour: Mildly bullish but prefer to sell rallies

Medium Term: Mildly bearish

Economic data highlights will include:

German Provisional CPI (Octg), US Provisional GDP (Q3), Personal Consumer Expenditiure, Rts/Michigan Consumer Sentiment Index

Meta Trader
EURUSD: 4 Hour

Euro


USDJPY: 105.25
Resistance Support
106.54 27 June high 105.00 Minor
106.10 55 MMA 104.80 Minor
105.80 200 MMA 104.40 Rising trend support
105.61 29 July high 104.00 Minor
105.34 Session high 103.50 Daily cloud top/21 Oct low

Bias

As expected, the dollar has finally taken out the resistance levels ahead of 105.00 and has headed beyond there to reach 105.34, closing the US session near the highs.

The 4 hour/daily momentum indicators are looking increasingly positive, so trading from the long side is preferred, looking for a test of 105.60 and then 105.80, which should see good sellers (200 MMA).  Beyond there look for a run towards 106+, but possibly not today. Further out, 107.25 (200 DMA) and 108.30 (Descending trend resistance/Fibo resistance) would seem to attract. On the downside, if we were to head back below 105.00 and the previous top at 104.87, then we may be in for further consolidation but overall I prefer to buy dips as long as we sit above the rising trend support, now at 104.40. Watch out for the Japanese CPI and Unemployment data today.

24 Hour: Mildly bullish

Medium Term: Mildly Bullish

Economic data highlights will include:

Japan CPI, Unemployment

Meta Trader
USDJPY: 4 Hour

Yen


GBPUSD: 1.2167
Resistance Support
1.2470 7 Oct high 1.2148 Session low
1.2400 (38.2% of 1.3444/1.1821) 1.2100 Minor
1.2332 19 Oct high 1.2088/81 11 Oct low/25 Oct low
1.2297 20 Oct high 1.2050 Minor
1.2271 Session high 1.2000 Minor

Bias                                                                                     

Cable rose to a session high of 1.2271 on the back of the solid UK Q3 GDP data (0.5%  v exp 0.3%) but that was as good as it got and it is now back at the lows, near 1.2150.

As before, the 4 hour charts are flat, and further choppy trade within the recent 1.2050/1.2250 range may be in order today. Once again, there are better pairs to trade, but if we can make a sustained run above 1.2300, we could see a run towards 1.2430/75.

24 Hour: Neutral

Medium Term: Neutral.

Economic data highlights will include:

Consumer Credit, Net Lending to Individuals

Meta Trader
GBPUSD: 4 Hour

Gbp


USDCHF: 0.9937
Resistance Support
1.0040 Minor 0.9918 200 HMA
0.9998 25 Oct high 0.9903 26 Oct low
0.9985 (61.8% of 1.0327/0.9443) 0.9854/50/42 Weekly cloud top /Daily Tenkan/20 Oct low
0.9958 26 Oct high 0.9800 Minor
0.9935 Descending trend resistance 0.9785 200 DMA

Bias                                                                             

US$Chf has had another tight day (0.9911/50) leaving the outlook unchanged.

Technically, the short term momentum indicators are flat and further consolidation may be in store. It could be that we have put in a short term top at 0.9999 on Tuesday, and I still suspect that we may have the potential to retest 0.9900 and lower, but would be looking to buy dips below there. The dailies still look mildly constructive, so if looking to buy into weakness, the support arrives at the 0.9900/10 area, and below there, towards 0.9840/50. I suspect stops should now be left below 0.9820. Eventually I am looking for a run above the 25 Oct high (0.9999) and beyond parity, although this seems unlikely today and we could see better levels to buy dollars.

24 Hour: Neutral

Medium Term: Prefer to buy dips

Meta Trader
USDCHF: 4 Hour

Chf


AUDUSD: 0.7584
Resistance Support
0.7708 26 Oct high 0.7587/81 Daily Cloud top/Session low
0.7675 Minor 0.7568/62 Daily cloud base /100 DMA
0.7645 200 HMA 0.7555 14 Oct low/(61.8% of 0.7441/0.7733)
0.7625 100 HMA 0.7535 Rising trend support
0.7600 Minor 0.7505 13 Oct low

Bias

The Aud has traded heavily in the latter half of the session, by breaking down below 0.7600, to come to rest on the decent support seen at around 0.7580.

Further losses appear to be on the cards, with the short term momentum indicators aligning to point lower although decent support lies all the way down to 0.7500 so progress, if seen, may be slow. Resistance now lies above 0.7600, at 0.7630/40/50 and looking to sell into strength is preferred. If wrong, on the topside, further strength could take us back towards 0.7700 where I would again be looking to sell, with a SL above the recent high at 0.7733.

24 Hour: Mildly Bearish

Medium Term : Prefer to sell rallies     

Economic data highlights will include:

PPI, New Home Sales

Meta Trader
AUDUSD: 4 Hour

Aud


NZDUSD: 0.7119
Resistance Support
0.7200 Minor 0.7107 Session low
0.7183/86 26 Oct high /100 DMA 0.7087 (76.4% of 0.7034/0.7265)
0.7166/70 Session high/200 HMA 0.7076 17 Oct low
0.7150 100 HMA 0.7060 Rising trend support
0.7135 Minor 0.7034 13 Oct low

Bias                                                   

The Kiwi is heavy at the end of the session, unable to maintain gains towards the 0.7166 highs and is closing the US session near the lows but so far holding on above 0.7100.

The 1 and 4 hour momentum indicators appear to lining up to point lower, so a break of 0.7100 is now looking more likely, in which case we could head towards support at 0.7085 and below there at 0.7060, which I expect to see eventually, although progress may be slow, possibly dependent on the US data late in the day. Below 0.7060 would open 0.7035 (13 Oct low) but not yet.Selling rallies, with a SL placed above 0.7185 is preferred.

24 Hour: Mildly Bearish

Medium Term : Prefer to sell rallies    

Economic data highlights will include:

ANZ Business Confidence

Meta Trader
NZDUSD: 4 Hour

Nzd