7 Nov: Markets unaffected by US employment data as traders focus on tomorrow’s election.

By | November 6, 2016

Financial markets were relatively steady on Friday while waiting on tomorrow’s US election, with the US employment numbers causing little lasting reaction. The Non-farm payroll grew by 161k job in October, while the prior month’s figure was revised up from 156k to 191k. The headline unemployment rate fell back to 4.9%, down from 5.0%, while the average hourly earnings climbed more than expected, by 0.4% mm. The US trade deficit narrowed to USD -36.4b in September versus expectation of USD -39.2b.

The coming week is fairly thin on the ground for major data, which is probably just as well as the whole world will be entirely focused on the US election which takes place of Tuesday. That aside, the main event is possibly the RBNZ Interest Rate Decision (Thursday), where a cut is widely expected despite the recently improved data coming from NZ. Monday kicks off with the BOJ Minutes and the ANZ Job Ads, followed by the German Retail Sales, EU Sentix Investor Confidence Survey and EU Retail Sales, but with little to come from the US.

CURRENCIES
EURUSD: 1.1138
Res  1.1150  1.1175  1.1200
Sup  1.1100  1.1060  1.1020
USDJPY: 103.08
Res  103.35  103.50  103.70
Sup  102.80  102.55  102.15
GBPUSD: 1.2518
Res  1.2555  1.2600  1.2630
Sup  1.2485  1.2445  1.2415
USDCHF: 0.9680
Res  0.9710  0.9740  0.9765
Sup  0.9675  0.9650  0.9630
AUDUSD: 0.7672
Res  0.7695  0.7710  0.7735
Sup  0.7650  0.7635  0.7610
NZDUSD: 0.7327
Res  0.7340  0.7370  0.7415
Sup  0.7300  0.7275  0.7265
INDICES / COMMODITIES
S+P: 2081
Res  2100  2114  2130
Sup  2078  2066  2056
DJI: 17813
Res  17900  17960  18015
Sup  17800  17710  17615
ASX SPI: 5123
Res  5150  5170  5194
Sup  5120  5100  5070
GOLD: 1304
Res  1308  1314  1320
Sup  1294  1286  1274
SILVER: 18.42
Res  18.70  18.90  19.10
Sup  18.20  18.00  17.80
OIL (WTI): 44.08
Res  44.85  45.60  46.40
Sup  43.40  43.00  42.20

 

Indices/commodities
S&P Futures 2081
Resistance Support
2144/49 Minor descending trend resistance/25 Oct high 2078 Friday low /200 DMA
2140 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 3 Nov high 2043 (38.2% of 1803/2191)

Bias                                                                                                           

US stocks were rangebound on Friday, unaffected by the US jobs data while waiting on the US election, allowing the shorter term momentum indicators to partially recover their near-term, oversold condition.

 The S+P has been down to 2078, where the 200 DMA continues to underpin the index from making further declines, 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 17813
Resistance Support
18145/50 31 Oct high /100 DMA 17798 Friday 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
17900 Friday high 17590 (61.8% of 16957/18622)

Bias

Ditto S+P. The DJI had a rangebound session heading into the weekend (17798/17900), allowing the shorter term momentum indicators to partially recover their near term, oversold situation.

The dailies are picking up 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 17800 would open the way 17710 (200 DMA) and then there is little to hold it up ahead of 17590..DJI

24 Hour: Prefer to sell rallies

Medium: Mildly bearish    

ASX SPI 5123
Resistance Support
5225 Minor 5120/23 (76.4% of 4982/5568)/Friday low
5208 (23.6% of 5288/5123) 5110 (50% pivot of 4643/5568)
5195 (23.6% of 5435/5123)/ 5100 6 July low
5170 Minor 5071 29 June low
5150 Minor 5050 Minor

Bias            

The ASX had another tough session on Friday, and after a minor recovery to 5186 it then fell through the rest of the session closing the weekend at new trend lows of 5123.

The 4 hour charts remain oversold and may continue to attempt to correct themselves so we could yet see  near term squeeze higher, which would find offers at 5150/5170, and then again at 5185/95, and would again present a sell opportunity.  Structurally, I still prefer to be short, looking for a run below the 5123 low, for a look at 5110/00. Below 5100, there is little to hold the ASX up until 4996 (61.8% of 4982/5568) and I suspect we are heading there albeit possibly not until after the US election.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 3 Nov low/200 HMA
1319 (76.4% of 1343/1240) 1276 200 DMA
1315 100 DMA 1271 31 Oct low
1308/06 2/3/4 Nov high 1262 25 Oct low/4 Oct low /28 Oct low

Bias                              

Gold was choppy on Friday, using 1300 as a pivot in a 1295/1307 range.

While it may remain rangebound near current levels for the coming session, the dailies remain positive so further gains could see a run back to the 1308 highs and on to decent resistance, seen 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 18.42
Resistance Support
19.55 (61.8% of 21.13/17.10) /Descending trend resistance 18.18 Friday low
19.35 (76.4% of 20.06/17.10) 18.00 3 Nov 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/200 WMA 17.75 (38.2% of 17.10/18.73)
18.73 2 Nov high 17.55 28 Oct low

Bias                                                                                                 

As with Gold, Silver was choppy on Friday, trading a range of 18.18/47.

Further choppy trade in the 18.15/65 range would not really surprise today 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 200 WMA/100 DMA at 18.95, which if seen should be strong resistance and possibly a level where we should look to go short for a return to the downside. Ahead of that, SL on long positions should be placed just below 18.00.Silver

24 Hour: Prefer to buy dips

Medium Term: Neutral

OIL (WTI) 44.08
Resistance Support
46.80 (38.2% of 52.19/43.55) 43.40 200 DMA
46.44 2 Nov high/100 DMA/100 WMA           42.98 1 Sept low
45.88 3 Nov high 42.20 (76.4% of 39.17/52.19)
45.58 (23.6% of 52.19/43.55) 41.75 Minor
44.85 Minor 41.08 11 Aug low

Bias

WTI is lower again as it continues to suffer from the large inventory build, reported by the EIA last week, while also not being helped by the ongoing dispute between Saudi Arabia and Iran which resurfaced at a meeting of OPEC members last week when Saudi officials said that they are prepared to raise oil output steeply, to bring prices down if Tehran refuses to limit its supply.

Technically, with the 4 hour/daily momentum indicators both still pointing lower, a break of the nearby support at 43.40 (200 DMA) would find bids at 43.00, but below which there is little technical support to prop the price up until we reach 42.20, and then again, not a lot to be seen until the August low at 41.08. On the topside, Friday’s high was 44.84, a break of which could see a run back to the Thursday high at 45.88, and beyond that towards 46.45, where the 100 WMA/DMAs has previously capped it and would again strong resistance, although unlikely to be seen for a while .  There is growing bullish divergence in the hourly charts so bounces are likely but selling into strength above 45.00, if seen, seems to be a plan.WTI

24 Hour: Prefer to sell rallies

Medium Term: Mildly bearish


EURUSD: 1.1138
Resistance Support
1.1212 (76.4% of 1.1325/1.0850) 1.1100 Pivot
1.1175 200 DMA 1.1080 Friday low
1.1150 100 WMA/Weekly cloud top/Weekly Kijun 1.1058 (23.6% of 1.0850/1.1225)/4 Nov low
1.1138/40 Friday high /100 DMA /(61.8% of 1.1325/1.0850) 1.1018 (38.2% of 1.0850/1. 1225)
1.1125/15 3 Nov high/Weekly cloud base 1.0986 (50% pivot of 1.0850/1. 1222)

Bias

€/Usd had a tight range heading into the weekend, largely unaffected by the NFP figure, while waiting on the election result. It will probably be much the same until the polls have closed at the end of tomorrow’s session and thus, a cautious stance is required.

The 4 hour momentum indicators are fairly neutral, with buyers again likely to be found at around 1.1080, 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 1.1150, a although the 100 DMA, at current levels, may hinder further progress today. Above 1.1150, which is also strong resistance, would then run into sellers at 1.1175 and 1.1200 so any upside progress, if seen, looks likely to be slow.

24 Hour:  Neutral

Medium Term: Prefer to buy dips

Economic data highlights will include:

US Daylight Savings ends

M:  German Factory Orders (Sep), EU Sentix Investor Confidence Survey, Retail Sales, US Labor Market Conditions Index, Consumer Credit

T: US Presidential Election, German Industrial Production, Current Account, Trade Balance, US NFIB Business Optimism Index, NIESR GDP Estimate, API Weekly Crude Oil Stock Inventory

W: European Commission Outlook for Economic Growth, US Wholesale Inventories, EIA Crude Oil Stocks Weekly Change

T: US Jobless Claims, Monthly Budget Statement

F: Remembrance Day/US Veterans Day.

Meta Trader
EURUSD: 4 Hour

Euro


USDJPY: 103.08
Resistance Support
104.80 (76.4% of 105.52/102.54) 102.80 (50% pivot of 100.05/105.52) /Daily Kijun /100 DMA /Friday low
104.35 200 HMA /(61.8% of 105.52/102.54) 102.54 3 Nov 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 3 Nov high 101.80 Daily cloud base

Bias

US$Jpy had a tight session heading into the weekend and a similar outcome appears possible today unless the BOJ Minutes spring a surprise, with the dollar once again looking likely to use 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 the 100 DMA at 102.80 and then possibly 102.50, a break of which would open the way towards 102.00/15 and eventually to the daily cloud base at 101.80. For the coming session, the 4 hour charts appear to be attempting to form a base so some choppy, sideways trade may be in store, with a view to selling into strength near the 3 Nov high of 103.48, with a SL placed above 103.75 or ideally above 104.00.  Note that the heavy oil price will weigh on US$Jpy.

24 Hour: Neutral

Medium Term: Mildly bearish

Economic data highlights will include:

M: BOJ Minutes

T: Provisional Coincident Index, Leading Economic Index, Machine Tool Orders (Sept)

W: Trade Balance, Current Account, Monday (Sept), Eco Watchers Survey

T:

F:

Meta Trader
USDJPY: 4 Hour

Yen


GBPUSD: 1.2518
Resistance Support
1.2725 Minor 1.2445 Friday low
1.2680 Minor 1.2415 Minor
1.2628/35 (38.2% of 1.3443/1.1821) /Weekly Tenkan 1.2385 (23.6% of 1.1821/1.2555)
1.2600 Minor 1.2340 100 HMA
1.2556 Friday high /(23.6% of 1.5019/1.1821) 1.2275 (38.2% of 1821/1.2556)

Bias                                                                                     

Cable added to its gains by reaching 1.2556, as fears of a ‘hard’ Brexit continued to abate, on Friday.

As before, with both the 4 hour/daily momentum indicators looking increasingly positive, buying dips would seem the way to go, and once above 1.2550, there is little resistance seen ahead of 1.2630. .

24 Hour: Prefer to buy dips

Medium Term: Mildly bullish.

Economic data highlights will include:

M: Manufacturing/Industrial Production, Inflation Report Hearing

T:

W: Goods Trade Balance

T:

F:

Meta Trader
GBPUSD: 4 Hour

Gbp


USDCHF: 0.9680
Resistance Support
0.9756 (23.6% of 0.9999/0.9680) 0.9680 Friday low
0.9775 200 DMA/100 DMA 0.9650 (76.4% of 9538/0.9999)
0.9765/59 100 DMA 0.9630 26 Aug low
0.9735 Minor 0.9610 Rising trend support
0.9700 Minor 0.9590 Minor

Bias                                                                             

US$Chf traded either side of 0.9700 on Friday before closing on its lows at 0.9680. With further choppy, sideways trade looking likely 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 continue to act as resistance ahead of 0.9800. With the daily momentum hinting at further downside pressure, a retest of Friday’s low of 0.9680 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.

24 Hour: Neutral

Medium Term: Prefer to sell rallies

Economic data highlights will include:

M: CPI

T:

W:

T:

F:

Meta Trader
USDCHF: 4 Hour

Chf


AUDUSD: 0.7672
Resistance Support
0.7773 22 April high 0.7636 3 Nov 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
0.7696 Friday high 0.7557/54 28 Oct low/(61.8% of 0.7441/0.7733)

Bias

The Aud was choppy again on Friday, finishing the day unchanged after an earlier test of 0.7696 failed to take out the sellers camped at 0.7700.

More of the same seems possible today, and once again 0.7640/0.7700 would again seem to have it covered. 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. The downside looks a little limited today and good support lies below  0.7640 at 0.7600,  and then again 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:

M: AIG Performance of Services Index, ANZ Job Ads

T: NAB Business Conditions/Confidence, China Trade Balance (Oct)

W: WBC Consumer Confidence, MYEFO, China CPI

T:

F: China Foreign Direct Investment, New Loans

Meta Trader
AUDUSD: 4 Hour

Aud


NZDUSD: 0.7327
Resistance Support
0.7413 9 Sept high 0.7298 Friday low
0.7400 Minor 0.7277 3 Nov 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 3/4 Nov high 0.7187 (50% of 0.7035/0. 7337)

Bias                                                   

The Kiwi maintained its strength of the previous sessions on Friday and finished the week near the 0.7337 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. Aside from the US election, much will depend on the RBNZ on Thursday, where the consensus is that they will cut rates by 25 points, as there is still no sign of impending CPI inflation pushing up towards the RBNZ target, which would limit further upside momentum. The risk is that the RBNZ stay on hold, which would see the Kiwi soar higher.

On the downside, support will be seen today at 0.7300, and then 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    

S+PEconomic data highlights will include:

M:

T:

W: Electronic Card Retail Sales

T: RBNZ Interest Rate Decision/Monetary Policy Statement/Press Conference

F: Food Price Index, Business PMI (Oct)

Meta Trader
NZDUSD: 4 Hour

Nzd