6 Dec:US$ lower, stocks firm. Euro soars, after the early dip on the Italian vote result. RBA, US GDP today.

By | December 6, 2016

The Euro has bounced strongly on Monday after the initial knee-jerk reaction to Italy’s referendum and, judging from today’s price action, appears to have put in a near-term base. Cable is sitting near 1.2700 as it trades on the back of the headlines coming from the High Court appeal over Brexit and is currently flat on the day. Elsewhere in the currency markets, the US dollar has been markedly weaker on all fronts, while the Yen and the commodity bloc are firmer at the end of the US session, as are US stocks, with the DJI having briefly made another new all time high.  WTI also had a solid session, although it is giving up some of those gains late in the day. The metals were choppy but essentially rangebound.

Tuesday will kick off with the NZ Building Permits, the Australian Current Account and the China Foreign Exchange Reserves. The final 2016 RBA Interest Rate Decision takes place later, where no change to policy is expected to policy although the statement may contain a dovish bias, given the recent soft data.. The EU sees the Q3 GDP and the German Factory Orders for October, while the High Court Brexit appeal will continue in the UK. From the US we get the Trade Balance and the Factory Orders, and the API Weekly Crude Oil Stock Inventory will also be released, which will likely add to the current volatility in the oil price. Kiwi traders should watch for the fortnightly Fonterra dairy index, due in European trade.

CURRENCIES
EURUSD: 1.0765
Res  1.0795  1.0815  1.0855
Sup  1.0725  1.0685  1.0640
USDJPY: 113.75
Res  114.00  114.60  114.85
Sup  113.25  112.85  112.50
GBPUSD: 1.2718
Res  1.2745  1.2770  1.2800
Sup  1.2690  1.2665  1.2625
USDCHF: 1.0067
Res  1.0100  1.0140  1.0180
Sup  1.0050  1.0010  0.9985
AUDUSD: 0.7474
Res  0.7500  0.7520  0.7540
Sup  0.7465  0.7450  0.7430
NZDUSD: 0.7131
Res  0.7150  0.7170  0.7185
Sup  0.7105  0.7085  0.7070
INDICES / COMMODITIES
S+P: 2203
Res  2208  2214  2220
Sup  2190  2178  2170
DJI: 19205
Res  19250  19275  19300
Sup  19175  19115  19080
ASX SPI: 5446
Res  5460  5476  5500
Sup  5426  5400  5380
GOLD: 1171
Res  1180  1188  1198
Sup  1158  1150  1140
SILVER: 16.74
Res  16.85  17.00  17.25
Sup  16.50  16.30  16.15
OIL (WTI): 51.23
Res  52.00  52.40  53.00
Sup  50.65  50.15  49.50

 

Indices/commodities
S&P Futures 2203

The S+P saw an early dip to 2179 as risk sentiment soured, although this has now all changed and we are currently sitting on the 2200 pivot after reaching a high of 2208.

Further choppy sideways trade seems to be the overall theme, but with the dailies still looking unconvincing on the topside we could yet head a bit lower, and below 2190 could revisit today’s low, a break of which would allow 2170 to be tested and further out we could see 2140/50 although unlikely. On the topside, back above 2208, resistance will arrive at the 2213 all-time high, above which we might expect the slow grind higher to continue, towards 2220. With the weeklies apparently trying to turn higher, a slow grind to the topside again seem to be the most likely outcome although the dailies do still suggest dips, providing slightly better levels to buy into.

24 Hour: Neutral Medium term: Neutral

 

                                         Resistance Support
2225 Minor 2190 Minor
2220 Minor 2178 Session low/21 Nov low
2215 Minor 2169 (23.6% of 2028/2213)
2213 30 Nov high  / All time high 2160 Minor
2208 Session high 2150 Minor
DJI Futures 19205
The DJI made a new all-time high at 19275 today, before dipping back under 19200 heading into the day’s close. As before, the slow grind higher seems set to continue, but as with the S+P, I prefer to heave bids at lower levels, looking to get set.
24 Hour: Neutral Medium term: Neutral

 

Resistance Support
19500 Minor 19160 100 HMA
19400 Minor 19110 200 HMA
19350 Minor 19080 Session low
19300 Minor 19041 28 Nov low
19275 Session high/All time high 18973 23 Nov low
ASX SPI 5446

The ASX saw an early dip below 5400, trading to 5380 ahead of a later bounce to finish the day more or less where it opened, currently at 5440. A short term gap to 5455 needs closing and the momentum indicators do suggest that this is likely to happen. Further out, the daily momentum indicators appear to suggest further choppy, sideways trade, where back above 5460, both 5480 and 5500 would provide topside resistance. Above 5500, (unlikely today), would meet the 5517, 28 Nov high and the 25 Nov high of 5527. Beyond there though, 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, back below minor support at 5425 would again see buyers at 5400 and again at 5380 although this looks unlikely to be seen again today.

24 Hour: Neutral Medium term: Neutral

 

Resistance Support
5527 25 Nov high 5425 Minor
5500 Minor 5400 Minor
5475 Minor 5381 Session Low
5460 2 Dec close – weekend gap 5350 Minor
5446 Session high 5335 (38.2% of 5029/5527)
GOLD 1171

Gold tested both ends of the range on Monday (1288/57) in choppy conditions, before ending up pretty much in the middle, leaving the outlook unchanged.

Another downside test would again find bids above 1160 and at the 1157 lows, but below which there is little to hold the price up until 1120. On the topside as before, resistance will be seen at 1180 (minor), at the session high and then again in the 1195/1200 area although this looks unlikely to be seen for a while. Given that the weeklies point lower I still prefer to trade strategically from the short side although the dailies may be looking to find a near term base, suggesting another rangebound session ahead.

24 Hour: Neutral Medium term: Mildly bearish

 

Resistance Support
1199 (23.6% of 1337/1157) 1165 Minor
1197 28 Nov high 1157/Session low 4 Feb low
1188 Session high 1140 Minor
1182 200 HMA 1130 Minor
1176 100 HMA 1122 (76.4% of 1046/1375)
SILVER 16.74

Silver opened the week with a brief spike higher to 16.97 although it has since spent another rangebound day below there, ending the session pretty much unchanged at 16.74.

Once again, the short-term momentum indicators are flat and we could be in for more of the same again today. As we said before, it could be that Silver is building a base, with resistance seen at 16.85/95, which if broken could see a run towards 17.50 although if we do head up there, this area would suggest a medium term sell opportunity. In the meantime, below today’s low of 16.48 could see another test of the 2 Dec low of 16.31. Below that would eventually open the way to the minor double bottom at 16.16 and possibly 16.00, beneath which would allow a run towards 15.80 and potentially to 15.40.  I still prefer to trade from the short side although leave room for a short-term squeeze towards 17.50 before jumping in too heavily.

24 Hour: Neutral Medium term: Prefer to sell rallies

 

Resistance Support
17.50 Head/shoulders objective 16.48 Session low
17.23 (38.2% of 18.98/16. 17)/16 Nov high 16.31 2 Dec Low
16.97 Session high 16.16 25 Nov Low/23 Nov low
16.85 (23.6% of 18.98/16. 17)/28 Nov high 16.00 Minor
16.79 2 Dec high 15.81 1 June low
OIL (WTI) 51.23

WTI headed higher again on Monday, reaching 52.38, last seen in July 2015, before slipping in late trade to close the day at 51.20.

Technically, WTI has again closed the session almost right on the head shoulder neckline, suggesting a cautious stance in the sessions ahead. The short term momentum indicators look slightly negative but the dailies still look positive so buying dips remains the overall theme.  Support should be seen at 51.00 and at 50.00 although below there I would be nervous of staying long and would therefore have a tight stop in place.  As we said previously, the head shoulder formation seen in the weekly charts would have an objective of 82.00 and given the positive momentum seen in the dailies further upside action looks very possible. Nearer home, if we do head higher, the session high of 52.38 would see sellers, beyond which the next level to watch would be at 53.50.  The API Weekly Crude Oil Stock Inventory is due today and don’t forget that OPEC & non-OPEC countries to meet on December 10 in Vienna.

24 Hour: Prefer to buy dips Medium term: Bullish

 

Resistance Support
54.00 Minor 51.02 Session low
53.52 9 July 2015 high 50.16 2 Dec Low
53.00 Minor 50.00 (23.6% of 42.19/52.38)
52.38 Session high 49.00 Minor
52.10 Minor 48.55 (38.2% of 42.19/52.38)

EURUSD: 1.0765

Following its knee-jerk spike lower to a new 20 month low of 1.0505 the Euro has rebounded strongly and currently trades just below session highs of 1.0796. The rebound appears to have come about as a relief trade after the Italian referendum vote, as the current parliamentary structure seems likely to stay in place until early 2018 despite the resignation of the PM. The immediate political risk to Europe has therefore been pushed down road although the longer term outlook remains negative.

With the 4 hour and daily charts now aligned to point higher, a test of 1.0800 would seem to lied ahead, where decent resistance lies in the 1.0800/20 area, but above which could see a run towards 1.0900, which again should be strong but above which could open the way to 1.1000. Note that today’s price action has seen a key-day reversal, which would seem to add to the chances of a near term test of higher ground.

The downside will see bids at the various minor Fibo levels of the sessions spike higher ahead of the Monday low support, seen at 1.0504 although this looks unlikely to be seen again in the near term. Further out, below 1.0500 would eventually open the way to the March 2013 low at 1.0461, beneath which there is very little to hold the Euro up until we reach almost to parity (1.0070=61.8% of 0.8225(Oct 2000 low)/1.6037(July 2008 high)), with minor levels ahead of that seen as per the table below.

While the shorter term momentum indicators look positive, I still prefer to sell into strength.

24 Hour: Mildly bullish Medium term: Prefer to sell rallies

 

Resistance Support
1.0900 (50% pivot of 1.1300/1.0505)/Weekly Tenkan/Daily Kijun 1.0725 (23.6% of 1.0504/1.0796)
1.0855 Minor 1.0685 (38.2% of 1.0504/1.0796)
1.0816 15 Nov high 1.0615 (61.8% of 1.0504/1.0796)
1.0806 (38.2% of 1.1300/1.0505) 1.0575 (76.4% of 1.0504/1.0796)
1.0796 Session high 1.0504 Session low

Economic data highlights will include:

German Factory Orders, EU Q3 GDP, US Trade Balance, Factory Orders, API Weekly Crude Oil Stock Inventory

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 113.75

US$Jpy was volatile on Monday, largely as a result of being pushed around by flows in the crosses, particularly immediately after the result of the Italian referendum, causing EurJpy in particular to jump around. For its part, and early dip to 112.85 in US$Jpy was followed by a choppy rally that reached a high of 114.76 ahead of a sharp reversal to finish the day at 113.50.

The daily charts remain extremely overbought, so further corrections seem inevitable, where minor support will arrive at 113.20 and then again at the 112.85 session low, but below which there are only minor support levels below this until 112.00.

On the topside sellers, will be seen at 114.00, 114.60, at the session high of 114.76 ahead of the 114.82 trend high. Above that, there is good option protection ahead of 115.00 but above which there is little to stop the dollar heading on to 115.50/60. Further out, a break of this could then see a run towards 116.00 and even to 117.80 (76.4% of 121.05/98.94). For the time being, trading cautiously from the short side, selling into rallies above 114.00, seems to be the plan but further out, heading into 2017, I suspect that we have further dollar strength ahead of us.

24 Hour: Prefer to sell rallies Medium term: Neutral – Prefer to buy dips

 

Resistance Support
114.82 2 Dec high 113.25 200 HMA
114.75 Session high 113.00 Minor
114.60 100 DMA 112.86 Session low
114.00 Minor 112.50 Minor
113.65 100 HMA 112.15 Minor
Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2718

Cable had an early spike lower to 1.2626 although it has spent much of the balance of the session slowly regaining its ground and indeed has made a new 2 month high of 1.2744 late in the day.

The daily charts are picking up positive momentum and above the day’s high could see a run towards the 100 DMA at 1.2785, beyond which there is little to stop Cable heading to 1.2800, above which there is little to stop it heading towards 1.3000 although this seems some way off, if seen. On the downside, minor support exists at 1.2700 and then again at the day’s low of 1.2626, a break of which could see us back at the 2 Dec low of 1.2570. Buying dips remains the theme while being aware of Brexit headlines coming from the courts.

24 Hour: Prefer to buy dips Medium term: Prefer to buy dips

 

Resistance Support
1.2850 Minor 1.2690 Minor
1.2800 Minor 1.2665 Minor
1.2785 100 DMA 1.2626 Session low
1.2770 5 Oct high 1.2600 Minor
1.2744 Session high 1.2570 2 Dec Low

Economic data highlights will include:

UK High Court Brexit Appeal Continues

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0067

US$Chf is lower today, in line with the stronger Euro, having traded a range of 1.0050/1.0185 and finishing right at the bottom end of it.

The near term indicators seem to be building some downside momentum and it could be that we have a deeper correction ahead, with a test of parity looking possible, below which could see a run towards 0.9950/55. If the dollar does head higher again, then back above 1.0100 could see a 1.0140 and even the session high at 1.0181. With the weekly charts still looking positive, we could eventually be in for a sterner test of 1.0200, beyond which could then head on to 1.0250 and to 1.0300/25 at some stage.  For the time being the dollar looks heavy, although I still think that eventually we are going to rebound for another test of the trend highs, albeit probably not today.

24 Hour: Neutral – Mildly bearish Medium term: Neutral – Prefer to buy dips

                                                                

Resistance Support
1.0223 2 Feb high 1.0055 Session low
1.0204 30 Nov high 1.0048  (23.6% of 0.9548/1.0204)
1.0181 Session high 1.0000 Psychological
1.0140 200 HMA 0.9955  (38.2% of 0.9548/1.0204)
1.0100 Minor 0.9925 Minor

Economic data highlights will include:

CPI

Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7474

The Aud has ended up having a solid session and after beginning the US day near the lows of 0.7411, it has rallied strongly to reach 0.7497, underpinned by firmer stocks/commodities and also by the weakness seen in the US$.  Today sees the RBA Meeting, where no change is expected although a dovish tone might be the mantra following the recent soft data. Tomorrow sees the Q3 GDP, which also is expected to be soft (range 0.0%-0.3%qq), so ahead of that the topside for the Aud may be limited, unless we see another selloff in the US$.

Having said that, the charts do appear to be building some upside momentum and the chance of some probes to the topside. If so, resistance will be seen at 0.0.7495/7500, a break of which there is then not too much to stop it heading on towards 0.7545/50 although I don’t really see it there today and prefer to sell into any strength on approach, with a SL place above 0.7560. On the downside, minor support now lies at 0.7460 and 0.7430. Back below 0.7400, unlikely today, could then head back to the recent support at 0.7360/70, a break of which could then see a move towards 0.7335 and then to 0.7300/10 although this looks over the horizon in the near term.

24 Hour: Neutral – possible test higher 24 Hour: Prefer to sell rallies.

 

Resistance Support
0.7570 16 Nov high 0.7465 Minor
0.7542 50% pivot of 0.7777/0.7310 0.7430 200 HMA
0.7520 Minor 0.7411 Session low
0.7510 Minor 0.7400 2 Dec Low
0.7496/97 29/30 Nov high/Session high 0.7363/61 24 Nov low/22 Nov low

Economic data highlights will include:

Current Account, China Foreign Exchange Reserves, RBA Interest Rate Decision

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7131

John Key’s resignation saw the Kiwi trade under pressure, eventually  falling to a low of 0.7068, although the weakness in the US$ during the NY session has seen a change of fortune, allowing it to bounce strongly, reaching 0.7156 before ending the day at 0.7135.

The 4hour/daily momentum indicators still look mildly constructive and a run towards the decent resistance at 0.7185 seems possible, a break of which could see a move to 0.7200+, possibly up to 0.7240, although doubtful today.

On the downside buyers will again be seen at 0.7100, 0.7085 and at the session lows around 0.7070, although this seems unlikely to happen today. If wrong, look for another run towards 0.7035, where the 200 DMA previously propped it up.

Don’t forget the Fonterra Dairy Index tonight, due in European trade.

24 Hour: Mildly bullish Medium term: Prefer to sell rallies

 

Resistance Support
0.7200 Minor 0.7105 100 HMA
0.7185 (50% of 0.7400/0.6983)/100 DMA 0.7085 Minor
0.7159 30 Nov high 0.7068 Session low
0.7147 2 Dec high 0.7043 2 Dec low
0.7131 Session high 0.7035/32 200 DMA

Economic data highlights will include:

Building Permits (Oct), Global Dairy Trade Index,

Meta Trader
NZDUSD: 4 Hour

nzd

The post 6 Dec:US$ lower, stocks firm. Euro soars, after the early dip on the Italian vote result. RBA, US GDP today. appeared first on FX Charts Daily.