4 Nov: Cable higher after High Court ruling over Brexit. NFP today, with all eyes on the US election.

By | November 3, 2016

Ongoing election jitters kept the US$ under pressure during that Asian session although that minor selloff has since largely been reversed and currency markets have been relatively stable since then, with the exception to the rule being Sterling which jumped sharply on a High Court ruling that Prime Minister Theresa May’s trigger of Article 50 for Brexit must get parliamentary approval. It was also underpinned by the BOE decision to leave rates unchanged, but more importantly, to drop its signal for further economic stimulus as well as upwardly revised revisions for the economy to grow 2.2% in 2016 and 1.4% in 2017. Elsewhere, US stocks were rangebound but heavy, the metals took a hit but have since recovered, while oil remains under pressure.

Today could be a session of sitting around as we wait on the US employment data due later in the session (exp 4.9%, +175K, AHE +0.3%), with many traders now sitting it out until the US election. Before then we do see some action, notably from the Australian Retail Sales (+0.4%, Sept) and the RBA Monetary Policy Statement. We also get the global October Composite/Services PMIs and the EU PPI. That is about it though, and it will be a day of watching for political headlines coming from the US while waiting on the NFP. Have a good weekend

CURRENCIES
EURUSD: 1.1105
Res  1.1125  1.1150  1.1175
Sup  1.1060  1.1040  1.1020
USDJPY: 102.89
Res  103.25  103.50  104.00
Sup  102.80  102.55  102.15
GBPUSD: 1.2461
Res  1.2495  1.2550  1.2600
Sup  1.2415  1.2365  1.2330
USDCHF: 0.9739
Res  0.9760  0.9800  0.9830
Sup  0.9695  0.9670  0.9650
AUDUSD: 0.7683
Res  0.7690  0.7710  0.7735
Sup  0.7660  0.7635  0.7610
NZDUSD: 0.7335
Res  0.7340  0.7370  0.7415
Sup  0.7300  0.7275  0.7265
INDICES / COMMODITIES
S+P: 2084
Res  2100  2114  2130
Sup  2080  2066  2056
DJI: 17854
Res  17935  17970  18050
Sup  17820  17790  17710
ASX SPI: 5166
Res  5180  5200  5226
Sup  5144  5130  5110
GOLD: 1304
Res  1308  1314  1320
Sup  1294  1286  1274
SILVER: 18.36
Res  18.70  18.90  19.10
Sup  18.20  18.00  17.80
OIL (WTI): 44.59
Res  45.00  45.90  46.40
Sup  44.30  44.10  43.40

 

Indices/commodities
S&P Futures 2084
Resistance Support
2144/49 Minor descending trend resistance/25 Oct high 2080 Session low /200 DMA
2139 100 DMA 2066 6 July low
2130 31 Oct high /200 HMA 2056 30 June low/100 DMA/100WMA
2115 (23.6% of 2191/2090) 2050 Minor
2099 Session high 2043 (38.2% of 1803/2191)

Bias                                                                                                           

US stocks have had a rangebound session while waiting on the upcoming US jobs data/ election, allowing them to partially recover their near term, oversold condition.

 The S+P has been down to 2080 late in the day, where the 200 DMA is underpinning further losses, but a break of which could see a run towards 2050/60 and eventually to the Fibo support at 2043. Resistance will be found at 2105/10 and again at 2120, which if seen would appear to be a decent area to sell into, with a SL placed above the 100 DMA, which has capped it recently.S+P

24 Hour: Prefer to sell rallies

Medium: Mildly bearish    

DJI Futures 17854
Resistance Support
18145/50 31 Oct high /100 DMA 17820 Session low
18110 (50% of 18364/17854) 17790 (50% of 16957/18622)/(23.6% of 15163/18622)
18050 (38.2% of 18364/17854) 17710 200 DMA
17958/75 2 Nov high/(23.6% of 18364/17854) 17617 6 July low
17933 Session high 17590 (61.8% of 16957/18622)

Bias

Ditto S+P. The DJI has had a rangebound session (17820/17933), allowing the shorter term momentum indicators to partially recover their near term, oversold situation.

While the dailies still look fairly flat, they do seem to be picking up some downside momentum so I suspect that selling into strength towards 17950/18000 may again be the plan, with a SL now placed above 18050. Below the 17820 low, we could then see a move to sub 17800, and possibly to 17700 although much will depend on the NFP.DJI

24 Hour: Prefer to sell rallies

Medium: Mildly bearish    

ASX SPI 5166
Resistance Support
5245 200 DMA 5144 Session low
5238 (23.6% of 5288/5162) 5120 (76.4% of 4982/5568)
5225 (23.6% of 5435/5162)/2 Nov high 5110 (50% pivot of 4643/5568)
5213 Session high 5100 6 July low
5200 Minor 5071 29 June low

Bias            

The ASX did as we hoped, by jumping to a high of 5213, allowing us to sell into the strength which eventually faltered and we are now back at 5170, and with the daily momentum indicators looking heavy, continuing to trade from the short side is preferred.

The 4 hour charts are in recovery mode as they attempt to correct their oversold situation and we could yet see  another squeeze higher, which will again  find offers at 5180/5200, and then again at 5220/30 and would again present a sell opportunity.  Structurally, I still prefer to be short, looking for an eventual run below the 5144 session low, for a look at 5120/00, but possibly not seen until next week, depending on the local Retail Sales and then on the NFP results.SPI

24 Hour: Prefer to sell rallies

Medium Term: Mildly bearish

GOLD 1304
Resistance Support
1337 Descending trend resistance 1295 Minor
1324 (61.8% of 1375/1240) 1285 Session low/200 HMA
1319 (76.4% of 1343/1240) 1276 200 DMA
1315 100 DMA 1271 31 Oct low
1308/06 2 Nov high/Session high 1262 25 Oct low/4 Oct low /28 Oct low

Bias                              

Gold was sold off sharply on Thursday, reaching our buy zone at 2185, before a bounce to currently sit back at 1302. While it may remain choppy, near current levels for much of the day, the dailies remain positive so further gains could see a run back to the 1308 highs and on to decent resistance at 1315/20. On the downside, we could see another move back towards 1285/90, and if so, with the dailies looking positive, buying the dips with a SL placed below the 200 DMA could be a plan.Gold

24 Hour: Prefer to buy dips

Medium Term: Neutral

SILVER 18.36
Resistance Support
19.55 (61.8% of 21.13/17.10) /Descending trend resistance 18.15 100 HMA
19.35 (76.4% of 20.06/17.10) 18.00 Session low
19.10 (50% pivot of 21.13/17.10) 17.92 (50% pivot of 17.10/18.73)
18.92/95 (61.8% of 20.06/17.10)/100 DMA 17.75 (38.2% of 17.10/18.73)
18.73 2 Nov high 17.55 28 Oct low

Bias                                                                                                 

The shorter term indicators were correct on Thursday, with Silver falling sharply from around 18.50 to a low of 18.00, allowing us to buy into the weakness before a decent bounce to 18.64, prior to a minor retreat to close the day at 18.35.  Further choppy trade in the 18.00/65 range would not really surprise, although the dailies still look constructive, so buying dips is still preferred, looking for an eventual run back towards the 18.73 trend high and then possibly on towards the 100 DMA at 18.95. SL on long positions, below 17.80.Silver

24 Hour: Prefer to buy dips

Medium Term: Neutral

OIL (WTI) 44.59
Resistance Support
46.85 100 HMA 44.33/34 28 Sept low/Session low
46.44 2 Nov high/100 DMA/100 WMA 44.10 (61.8% of 39.12/52.19)
46.19 (23.6% of 52.19/44.34) 43.40 200 DMA
45.88 Session high           42.98 1 Sept low
45.00 Minor 42.40 Minor

Bias

WTI is lower again today as it continues to suffer from the large inventory build reported by the EIA in the previous session. WTI is not being helped by the possibility that oil producers could walk away empty-handed from the November meeting after Iraq, Iran, Nigeria and Libya all signalled they might not take part in the proposed production cut deal, while Russia’s unclear stance is also fuelling uncertainty.

With the 4 hour/daily momentum indicators both still pointing lower, a break of the session low would find bids at the next decent target, at around 44.10, but below which there is little to support it until 43.40 (200 DMA ). On the topside, the session high has been 45.88, a break of which could see a run back to 46.44, where the 100 WMA/DMAs has previously capped it and thus would again strong resistance, although unlikely to be seen today. Note that WTI has broken below the 9 month rising trend support which could be an early warning of further losses to come.WTI

24 Hour: Prefer to sell rallies

Medium Term: Mildly bearish


EURUSD: 1.1105
Resistance Support
1.1212 (76.4% of 1.1325/1.0850) 1.1058 (23.6% of 1.0850/1.1225)/Session low
1.1175 200 DMA 1.1018 (38.2% of 1.0850/1. 1225)
1.1150 100 WMA/Weekly cloud top/Weekly Kijun 1.0986 (50% pivot of 1.0850/1. 1222)
1.1135/40 100 DMA /(61.8% of 1.1325/1.0850) 1.0953 (61.8% of 1.0850/1. 1225)
1.1125/15 Session high/Weekly cloud base 1.0915 (76.4% of 1.0850/1. 1225)

Bias

€/Usd has done pretty much as expected today, trading within a range of 1.1060/1.1125  while waiting for the US jobs data due late in the coming session, and with the momentum indicators being mixed a cautious stance is required. The 4 hour momentum indicators point lower, with buyers again likely to be found at around 1.1050 and at 1.1020, with stronger support likely to be seen at the previous 1.1000 pivot.  The dailies though remain positive, and the longer term charts still favour a more sustained test of the weekly cloud base, above which would run into sellers in the 1.1140/50 area, and then increasingly so as we approach 1.1200, with the 200 DMA at 1.1175 likely to provide stern resistance.

 While the Jobs/NFP/Average Hourly Earnings data will be in focus today it will be next week’s US election that traders will be more concerned about, so unless we see anything too far from expectations today (4.9%, +175K) then it could end up being a volatile session but one largely without too much direction. The EU Services/Composite PMIs are due in European trade.

24 Hour:  Neutral

Medium Term: Prefer to buy dips

Economic data highlights will include:

EU Services/Composite PMIs, US Jobs data/NFP/Average Hourly Earnings data, Baker Hughes Oil Rig Count

Meta Trader
EURUSD: 4 Hour

Euro


USDJPY: 102.89
Resistance Support
104.80 (76.4% of 105.52/102.54) 102.80 (50% pivot of 100.05/105.52) /Daily Kijun /100 DMA
104.35 200 HMA /(61.8% of 105.52/102.54) 102.54 Session low
104.02 (50% of 105.52/102.54) 102.15 (61.8% of 100.05/105.52)
103.67 (38.2% of 105.52/102.54) 102.00 Minor
103.43 Session high 101.80 Daily cloud base

Bias

General dollar selling on the back of the ongoing election jitters was the early theme of the previous Asian session, led by US$Jpy breaking below 103.00 and falling quickly to 102.54. This turned out to be the low of the day, since when the dollar has bounced around at higher levels, using 103.00 as a pivot.

With the daily momentum indicators pointing lower, structurally selling rallies still seems to be the plan looking for a retest of 102.50, a break of which would open the way towards 102.00/15 and possibly to the daily cloud base at 101.80.. Closer to home though, the 4 hour charts do appear to be attempting to form a base, so some choppy trade may be the near term outlook , with a view to selling into strength near the session high of 103.48, with a SL placed above 103.75 or ideally above 104.00.

24 Hour: Neutral

Medium Term: Mildly bearish

Economic data highlights will include:

Foreign Bond/Stocks Investment

Meta Trader
USDJPY: 4 Hour

Yen


GBPUSD: 1.2461
Resistance Support
1.2680 Minor 1.2415 Minor
1.2628/35 (38.2% of 1.3443/1.1821) /Weekly Tenkan 1.2365 Minor
1.2600 Minor 1.2335 (23.6% of 1.1821/1.2494)
1.2550 Minor 1.2280 Minor
1.2494 Session high 1.2235 (38.2% of 1821/1.2494)

Bias                                                                                     

Cable finally did as we thought it might, even taking out our most distant target of 1.2475 by rallying from 1.2296 to a high of 1.2494 following the UK High Court ruling over Brexit/Article 50. With both the 4 hour/daily momentum indicators looking increasingly positive, buying dips would seem the way to go, with little resistance seen ahead of 1.2600. A weak NFP reading would help it on its way.

24 Hour: Prefer to buy dips

Medium Term: Mildly bullish.

Meta Trader
GBPUSD: 4 Hour

Gbp


USDCHF: 0.9739
Resistance Support
0.9864 (50% pivot of 0.9999/0.9728) 0.9695 2 Nov low /Session low
0.9832 (38.2% of 0.9999/0.9728) 0.9670 Minor
0.9790 (23.6% of 0.9999/0.9728) 0.9650 (76.4% of 9538/0.9999)
0.9780 200 DMA 0.9630 26 Aug low
0.9765/59 100 DMA /Session high 0.9600 Minor

Bias                                                                             

US$Chf has traded a sideways range of 0.9695/0.9759  and with the momentum indicators looking mixed it could be another choppy session ahead so I would not be too involved at these levels, although the daily momentum indicators do hint at lower levels in the days ahead.

As before, having broken below the 200 DMA/100 DMA supports, these will act as resistance ahead of 0.9800. With the daily momentum hinting at further downside pressure, a retest of 0.9695/0.9700 would not surprise, below which could see a run towards 0.9650. If we do see a break above 0.9800, then sellers should arrive at 0.9840/60, although I am doubtful of seeing it up here again today unless the NFP surprises to the topside.

24 Hour: Neutral

Medium Term: Prefer to sell rallies

Meta Trader
USDCHF: 4 Hour

Chf


AUDUSD: 0.7683
Resistance Support
0.7773 22 April high 0.7636 Session high
0.7756 10 Aug low 0.7612 2 Nov low
0.7733 20 Oct 0.7587/82 Daily Cloud top /31 Oct low
0.7708 26 Oct high 0.7570/65 Daily cloud base /100 DMA
0.7688/83 1 Nov high /Session high 0.7557/54 28 Oct low/(61.8% of 0.7441/0.7733)

Bias

The Aud was choppy on Thursday, initially sold off from early highs due to the US election doubts that flowed into a general risk off-attitude, taking it briefly down to 0.7636 before a recovery, to currently trade at session highs of 0.7687.

More of the same seems possible today; at least until the NFP result and 0.7640/0.7700 would seem to have it covered although if we see the local Retail Sales (exp 0.4% – Sept) come in  too far from expectations we could see a directional move. Look out also for the RBA Monetary Policy Statement.Further out, a continuation of the choppy trade within the broad 0.7500/0.7700 range seems likely and as before, selling above 0.7700, with a SL above 0.7733, or preferably above 0.7760 is preferred, although waiting for today’s data before jumping in might be wise.The downside looks a little limited today and good support lies below 0.7600, in the 0.7570/85 area, a break of which would find further decent support all the way down to 0.7500.

24 Hour: Neutral

Medium Term : Prefer to sell rallies      

Economic data highlights will include:

Retail Sales, RBA Monetary Policy Statement

Meta Trader
AUDUSD: 4 Hour

Aud


NZDUSD: 0.7335
Resistance Support
0.7413 9 Sept high 0.7300 Minor
0.7400 Minor 0.7277 Session low
0.7380 (76.4% of 0.7485/0.7035) 0.7265 (23.6% of 0.7035/0.7337)
0.7368 22 Sept high 0.7220 (38.2% of 0.7035/0. 7337)
0.7333/37 Session high 0.7187 (50% of 0.7035/0. 7337)

Bias                                                   

The Kiwi has maintained its strength of the previous session and currently trades near the 0.7333 high.

The daily indicators still look constructive so further gains in the days ahead could see a run towards the mid- September high at 0.7368 and even towards 0.7400 although much will depend on the NFP/US election, and then later next week, on the RBNZ, where the consensus is that they will cut rates at the Nov 10th meeting as there is still no sign of impending CPI inflation pushing up towards the RBNZ target, and which would limit further upside momentum. On the downside, support will be seen today at 0.7265/75 and again at 0.7240 although below there looks doubtful. If wrong look for a run back to 0.7200, where it would seems to be a buy area, with a SL placed sub 0.7170.

24 Hour: Neutral

Medium Term : Mildly bullish but prefer to sell rallies    

Economic data highlights will include:

Labor Cost Index

Meta Trader
NZDUSD: 4 Hour

Nzd