29 Nov: Month end profit-taking curbs US$ strength. Q3 US GDP revision today

By | November 29, 2016

The dollar suffered a substantial correction in Asian trade on Monday, led lower by a selloff in US$Jpy which had become extremely overbought, although we have since seen a turnaround after a supportive economic growth outlook from the OECD. The semi-annual report indicated that Donald Trump is expected to undertake some fiscal stimulus in the early months of his presidency which could boost US growth to 2.3% in 2017, up from the prior forecast of 1.9%. For 2018, US growth could top 3.0%, up from the prior projection of 2.2%. The other major mover today was oil, which rallied in choppy trading ahead of Wednesday’s OPEC meeting, in the hope that members may yet come to an agreement to cut production.

Apart from the German CPI (exp 0.1% mm, 0.9% y, HICP; 0.1%/0.8%), Tuesday will be fairly thin until the US get in, when the US Provisional Q3 GDP is due (exp 3% annualised) and could cause some volatility if too far from expectations. The US Consumer Confidence is also due, as is the API Weekly Crude Oil Stock Inventory which could add to the already volatile conditions in the oil market ahead of tomorrow’s OPEC Meeting.

CURRENCIES
EURUSD: 1.0594
Res  1.0630  1.0660  1.0685
Sup  1.0560  1.0515  1.0460
USDJPY: 112.18
Res  112.70  113.00  113.30
Sup  112.00  111.65  111.35
GBPUSD: 1.2410
Res  1.2430  1.2460  1.2500
Sup  1.2385  1.2360  1.2300
USDCHF: 1.0138
Res  1.0165  1.0190  1.0225
Sup  1.0110  1.0030  1.0075
AUDUSD: 0.7475
Res  0.7490  0.7505  0.7520
Sup  0.7450  0.7430  0.7410
NZDUSD: 0.7068
Res  0.7085  0.7100  0.7115
Sup  0.7050  0.7035  0.7010
INDICES / COMMODITIES
S+P: 2199
Res  2212  2220  2230
Sup  2200  2190  2180
DJI: 19059
Res  19110  19150  19200
Sup  19040  19015  18960
ASX SPI: 5471
Res  5500  5516  5528
Sup  5450  5430  5404
GOLD: 1192
Res  1200  1210  1220
Sup  1180  1170  1160
SILVER: 16.60
Res  16.70  16.85  17.00
Sup  16.45  16.30  16.15
OIL (WTI): 46.82
Res  47.65  48.50  49.20
Sup  46.00  45.10  44.15

 

Indices/commodities
S&P Futures 2199
Resistance Support
2230 Minor 2200 Session low
2225 Minor 2191 23 Nov low
2220 Minor 2183 200 HMA
2215 Minor 2178 21 Nov low
2211 25 Nov high 2164 (23.6% of 2028/2207)

Bias

US stocks are mildly lower on Tuesday, although the S+P remains above 2200 heading into the US close.

As before, the dailies still look positive although they may be on the point of tipping over, so a cautious stance is required given that the 4 hour charts are showing a degree of bearish divergence, and ahead of Friday’s 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. On the topside, resistance will be seen at 2211 above which we might expect a slow grind towards 2220. This looks unlikely right now, but watch for the release of the US GDP figure, which may decide otherwise. 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.

24 Hour: Neutral

Medium Term: Neutral

DJI Futures 19059
Resistance Support
19500 Minor 19041 Session low
19400 Minor 18973 23 Nov low
19300 Minor 18950 200 HMA
19200 Minor 18911 22 Nov low
19146 24 Nov high   /All time high 18832 21 Nov low

Bias

Ditto S+P. The DJI is a little lower, after session of consolidation while waiting on for the US GDP figure, due later today.

The dailies remain positive although may be at the point of rolling over, so a cautious stance is required while the 4 hour indicators show a degree of bearish divergence. Cautiously maintaining a long position, but with a tight SL under 19000, does seem to be the preferred strategy while waiting on today’s GDP and then on Friday’s NFP figure.

24 Hour: Neutral

Medium Term: Neutral

ASX SPI 5471
Resistance Support
5568 1 August high 5450 Session low
5540 Minor 5425 200 HMA
5527 25 Nov high 5405 23 Nov low/ (23.6% of 5029/5527)
5517 Session high 5375 Minor
5500 Minor 5335 (38.2% of 5029/5527)

Bias                

 

The ASX had suffered a setback on Monday, falling quite hard from the opening 5517 to a low of 5450 before recovering to close the day at 5475. The 4 hour/daily momentum indicators are mixed, suggesting a cautious stance heading into Tuesday trade. On the topside, resistance will be seen at 5500 and at the 5517 session high and then the Friday high of 5527. Beyond there, 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 5450, support will be seen at 5425/30, a break of which could see a run back to 5400, although this looks unlikely today. A range trade looks likely today, with 5500/5430 looking likely to cover it.

24 Hour: Neutral

Medium Term: Neutral

GOLD 1192
Resistance Support
1233 16 Nov high 1182 Session low
1220 (23.6% of 1375/1270) 1171 25 Nov Low / (61.8% of 1046/1375)
1210 (23.6% of 1337/1170)/200 HMA 1164 8 Feb low
1200 100 HMA 1157 4 Feb low
1197 Session high 1122 (76.4% of 1046/1375)

Bias

Gold rallied strongly from the 1182 session lows on the back of the weaker dollar, reaching 1197 before running out of steam but currently not too far away, at 1192.

The 4 hour momentum indicators look  more positive today and with the dailies also showing early signs of having bottomed out, it may be that we see a squeeze back to 1200, above which could see a run to 1215/20, although this seems unlikely in the next 24 hours. On the downside, support will be seen at the 1182 session low, a break of which, another test of 1170 is possible although with the bullish divergence is now appearing on the 4 hourlies this looks unlikely. If wrong, below 1170 would find bids at 1155, but below which there is little to hold the price up until 1120.

24 Hour: Mildly bullish

Medium Term: Prefer to sell rallies

SILVER 16.60
Resistance Support
17.50 14 Nov high 16.16 25 Nov Low/23 Nov low
17.23 (38.2% of 18.98/16. 17)/16 Nov high 16.00 Minor
17.00 Minor 15.81 1 June low
16.85 (23.6% of 18.98/16. 17)/Session high 15.50 Minor
16.70 200 HMA 15.38 (76.4% of 13.64/21.13)

Bias

Silver headed up from the 16.45 lows to reach 16.85 before easing back to finish the Monday session at 16.60.

As with Gold, the 4 hour charts are showing some bullish divergence and further, near-term upside momentum could carry Silver back to the session highs and possibly on to 17.00, where I would again be looking to sell it, but with a tight SL placed above 17.20. Further out a test of 16.00 would not surprise, below which would allow a run towards 15.80 and potentially to 15.40.

24 Hour: Mildly bullish – Prefer to sell rallies

Medium Term:  Prefer to sell rallies

OIL (WTI) 46.82
Resistance Support
49.85 76.4% of 52.19/42.18 46.90 200 HMA
49.17 22 Nov high 46.35 Minor
48.50 Minor 45.86 25 Nov Low/100 DMA/100 WMA
48.20 (76.4% of 49.17/45.12) 45.12 Session low
47.62 Session high /61.8% of 49.17/45.12 44.85/90 61.8% of 42.18/49.17/200 DMA

Bias

Oil prices jumped in choppy trade on Monday after Iraq’s oil minister said he was “optimistic” that Wednesday’s crunch OPEC meeting will yield an agreement on output cuts. Having seen an early fall to 45.12 it later rebounded strongly to 47.62 before ending up at 46.80.

A Technical outlook is a little pointless ahead of the outcome of the meeting and thus a neutral stance is required.

Amongst the big players, JP Morgan has put the chances of an agreement between producers at 60%, but warned that a lack of a deal could take prices down to $35 to $40. On the other hand, Morgan Stanley warned that, although unlikely, “a strong announcement from OPEC to cut production substantially could lift oil prices by US$5 p.b., particularly if supported by strong words from non-OPEC members, such as Russia.

24 Hour: Neutral

Medium Term: Neutral


EURUSD: 1.0594
Resistance Support
1.0745 17 Nov high 1.0563 Session low
1.0703/10 (23.6% of 1.1282/1.0517) /17 Nov high 1.0537 25 Nov Low
1.0685 Session high 1.0517 24 Nov low/3 Dec 2015 low
1.0655 Minor 1.0500 Minor
1.0615 200 HMA 1.0462 March 2015 low

Bias                                                                                         

The Euro squeezed up to a high of 1.0685 in Asia as the dollar came under pressure from the selloff in US$Jpy. It has since rebounded and the Euro is currently trading above session lows of 1.0563, currently at close to 1.0600.

Technically, the short term charts a neutral, suggesting further choppy trade above the recent trend lows may be in store today. The dailies still point lower but may be attempting to from a base, and caution is warranted in case we see another dollar selloff, although plenty of long positions would have been stopped out today, meaning that the market will be less heavily weighted to holding long dollar positions. If we do see a directional move, the downside will again see good 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 yet. 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, minor resistance will now be seen 1.0615, above which could then carry on to the 1.0685 session 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. Looking ahead, it could end up being a fairly rangebound week as we wait on Friday’s US Jobs/NFP/Average Hourly Earnings, although today’s Q3 US GDP could provide some action.

24 Hour: Prefer to sell rallies

Medium Term: Cautiously Bearish

Economic data highlights will include:

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

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 112.18
Resistance Support
114.20 (61.8% of 121.05/98.94) 112.00 Minor
114.00 Minor 111.65 Weekly cloud base
113.89 25 Nov high 111.35/25 Session low/Daily Tenkan
112.96 Session high 110.88 (23.6% of 101.18/103.89)
112.70 Minor 110.25 Minor

Bias

Monday’s steep selloff reached 111.35 in early Asian trade, partially unwinding the overbought extremes seen in the 4 hour charts, before a steady recovery that has allowed it to regain 112.00.

The daily momentum indicators still point higher but do appear to be on the point of tipping over and with the 4 hour charts also looking negative, selling into near term strength may now be the short term trade plan. If we do head higher, then above the session high of 112.96 we could see a run towards 113.30 and then to Friday’s trend high of 113.89. Above that, although unlikely today, 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). The 4 hour momentum indicators are negative and thus the topside may be somewhat limited over the next 24 hours, and back below 112.00 could see another run to the session lows of 111.35, a break of which, the next realistic support is not seen until 110.85. As we said yesterday, watch out for the OPEC result and the NFP figure this week which will be key drivers along with the US/Jpy yield spread and the direction of stocks.

24 Hour: Prefer to sell rallies

Medium Term:  Neutral

Economic data highlights will include:

Japan Unemployment, Retail Trade

Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2410
Resistance Support
1.2600 Minor 1.2385 Rising trend support/Session low
1.2560 Minor 1.2360 23 Nov low
1.2531 Session high 1.2301 18 Nov low
1.2485 Minor 1.2250 (50% pivot of 1.1822/1.2673)
1.2430 200 HMA 1.2210 Minor

Bias                                                                         

Cable reached 1.2532 in Asia but that was as good as it got and it then fell sharply in early European trade, only pulling up when it met the rising trend support, currently at 1.2385, before ending the US session at just above 1.2400.

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 Tuesday and 1.2385/1.2485 may cover it while we wait on the US GDP figure.  If we do see a move, a break to the topside could see a retest of the session 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. On the downside, the rising trend support at 1.2385 should provide decent support but back below the session low, we could head towards.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.

24 Hour: Neutral

Medium Term:  Neutral

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0138
Resistance Support
1.0307 2 Dec  2015 high 1.0105 200 HMA
1.0255 29 Jan high 1.0078 Session low
1.0223 2 Feb high 1.0060 18 Nov low
1.0193/91 3 Feb high/24 Nov high 1.0030  (23.6% of 0.9548/1.0091)
1.0167 Session high 1.0000 Minor

Bias                                                                                                                                16 Nov

US$Chf fell to 1.0078 before a recovery to 1.0167 on Monday.

The daily momentum indicators still look constructive and hint that we could yet see a sterner test of 1.0200 and possibly to 1.0250 at some stage although the 4 hour charts currently suggest that we may need further near term consolidation, possibly confined to within Monday’s range, at least until the release of the US GDP figure, later in the session. If we do see a dip, then back below today’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 before, 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). Buying dips remains preferred.

24 Hour: Bearish divergence – Prefer to buy dips

Medium Term: Bullish

Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7475
Resistance Support
0.7580/83 100 DMA 0.7450 Minor
0.7542 (50% of 7777/0.7310) 0.7432 Session low
0.7518 200 DMA 0.7410 Channel base/200 HMA
0.7500/05 17 Nov high/Channel top 0.7385 Minor
0.7488/93 (38.2% of 7777/0.7310) Session high 0.7363/61 24 Nov low/22 Nov low

Bias                               

The Aud has performed well on Monday, reaching a high of 0.7493 and then holding on to the bulk of those gains despite the US$ recovery seen against the EU majors and the Yen.

The 4-hour momentum indicators look positive, so we could see further near term gains, possibly to the topside of the channel that we currently seem to be trading in, where the resistance would be at 0.7500/05.

The dailies also appear to be turning higher, adding to the cautiously bullish tone at the start of the week although there is decent resistance in the 0.7520/80 area and if seen, somewhere in that area would appear to be a decent level to sell into. On the other hand, the weekly momentum indicators still point lower, so further downside pressure would seem to be in store at some stage in the days ahead and back below the session low of 0.7432 could then head towards the channel base at around 0.7405. Further out,  a break of the support at 0.7360 could then head towards 0.7335 and then to 0.7300/10. For the next 24 hours a topside squeeze would not surprise although I would be looking for areas to sell into.

24 Hour: Mildly bullish – Prefer to sell rallies.

Medium Term:  Prefer to sell rallies

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7068
Resistance Support
0.7185 (50% of 0.7400/0.6983) 0.7050 Minor
0.7170 Minor 0.7035/32 200 DMA /Session low
0.7145 15 Nov high 0.7000 Minor
0.7135 (38.2% of 0.7400/0.6983) 0.6983 25 Nov Low
0.7101/07 Session high/17 Nov high 0.6971 24 Nov low

Bias

The Kiwi squeezed higher and made it to 0.7101 on Monday, before closing the day at 0.7070.

The 4 hour/daily momentum indicators do look slightly more positive today, so if we do see another run above 0.7100, then the next targets would be in the 7135/45 area. I would again be looking to sell it here, with a SL placed above 0.7170. On the downside, good support is seen at the session low of 0.7042, where the 200 DMA has propped it up. Below there would find further support 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.

A cautious stance is required as the RBNZ Governor, Wheeler, will be talking later today (during European trade) 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: Prefer to sell rallies

Economic data highlights will include:

RBNZ Governor Wheeler Speech

Meta Trader
NZDUSD: 4 Hour

nzd

The post 29 Nov: Month end profit-taking curbs US$ strength. Q3 US GDP revision today appeared first on FX Charts Daily.