9 Dec: Euro lower after ECB decision. Stocks at new highs – again. China CPI in focus today.

By | December 9, 2016

The Euro has been volatile on Thursday and is now broadly weaker against all the other majors after the ECB announced that it will extend its asset purchase program to December 2017, from the current expiry date of March. At the same time the size of programme will be tapered from EUR 80b a month to EUR 60b a month. Benchmark interest rate was held unchanged at 0.00%.  The US$ has been the big winner following the ECB decision – with one eye now on next week’s FOMC – and has regained much of the week’s earlier losses. Elsewhere, the Oil market could be in for further volatility as it appears that only five of 14 non-OPEC oil producers have agreed so far to meet with OPEC members on Saturday for talks aimed at widening a deal to reduce output. This will cast doubt on whether OPEC will secure the full cuts that it is seeking, and if so it would have the potential send oil quite sharply lower. The other main focus is on the US stock markets which are sailing away to new all time highs on a daily basis, with today being no exception.

Friday will kick off with the Australian Home Loans data and then the important China CPI (exp 0.1%mm, 2.2%yy). From then on a fairly quiet session will follow, with the UK Consumer Inflation Expectation being the main focus in European trade, to be followed by the Wholesale Inventories from the US. Otherwise it is pretty empty and much of the day will be spent delving into the ramifications of yesterday’s ECB announcement.

CURRENCIES
EURUSD: 1.0616
Res  1.0635  1.0665  1.0705
Sup  1.0595  1.0540  1.0505
USDJPY: 114.05
Res  114.40  114.60  114.85
Sup  113.85  113.60  113.10
GBPUSD: 1.2585
Res  1.2600  1.2630  1.2675
Sup  1.2550  1.2520  1.2500
USDCHF: 1.0163
Res  1.0180  1.0205  1.0255
Sup  1.0115  1.0095  1.0050
AUDUSD: 0.7461
Res  0.7480  0.7500  0.7520
Sup  0.7445  0.7430  0.7415
NZDUSD: 0.7178
Res  0.7200  0.7220  0.7240
Sup  0.7160  0.7145  0.7120
INDICES / COMMODITIES
S+P: 2244
Res  2260  2270  2280
Sup  2230  2220  2210
DJI: 19618
Res  19665  19750  19800
Sup  19550  19500  19400
ASX SPI: 5560
Res  5568  5600  5640
Sup  5540  5510  5474
GOLD: 1170
Res  1180  1188  1198
Sup  1160  1150  1140
SILVER: 17.00
Res  17.20  17.50  17.70
Sup  16.95  16.85  16.70
OIL (WTI): 50.83
Res  51.20  51.55  52.40
Sup  50.15  49.60  49.00

 

Indices/commodities
S&P Futures 2244
The S+P has made further strong gains in heading up to 2251. With blue sky ahead of us finding technical levels is tricky, but with the momentum indicators all pointing higher I would not be standing in the way.
24 Hour: Neutral Medium term: Neutral

 

                                         Resistance Support
2270 Minor 2240 Minor
2265 Minor 2230 Minor
2260 Minor 2220 Minor
2255 Minor 2210 Minor
2250 All time /Session high 2200 Minor
DJI Futures 19618
Ditto S+P.
24 Hour: Neutral Medium term: Neutral

 

Resistance Support
20000 Minor 19500 Minor.
19900 Minor 19400 Minor
19800 Minor 19300 Minor.
19700 Minor 19200 Minor
19663 Session high /All-time high 19100 Minor.
ASX SPI 5560

The ASX made it to the 5568 target, exactly touching the August 1 high, and given the look of the momentum indicators further gains seem possible, suggesting that we could see a run to 5600 and above, allowing a run towards the August 2015 high at 5671.

On the downside, minor support lies at 5525 and again at 5510. Back below 5500 could then see a run back towards 5475 although this looks unlikely. If wrong, then below here could see a run towards the 7 Dec low of 5447 and then to the 6 Dec low of 5422.

24 Hour: Mildly bullish Medium term: Mildly bullish

 

Resistance Support
5680 (76.4% of 5730/4643) 5540 Minor
5660 Minor 5525 Minor
5540 Minor 5510 (23.6% of 5029/5666)
5600 Minor 5490 Minor
5568 Session high/1 Aug high 5475 (38.2% of 5029/5666)
GOLD 1170

Gold has had a rangebound session (1169/1178) leaving the outlook unchanged

Another downside test would again find bids above 1160 and at the 1157 recent 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, at the 5 Dec 1188 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 7 Dec ahead, possibly heading a bit higher, in line with the move seen in Silver..

24 Hour: Neutral Medium term: Prefer to sell rallies

 

Resistance Support
1210 Minor 1169 Session high
1199 (23.6% of 1337/1157) 1157/5 Dec low 4 Feb low
1197 28 Nov high 1140 Minor
1188 5 Dec high 1130 Minor
1180 7 Dec high 1122 (76.4% of 1046/1375)
SILVER 17.00

Silver has had a rangebound session (16.96/17.21) leaving the outlook unchanged.

Resistance again lies at the 17.23, the 7 Dec high but with the daily momentum indicators pointing higher a break could see a run towards 17.60 and then possibly on towards 17.90, Bids should again be seen on dips towards 17.00 and again at 16.85, but below there could then head back to Monday’s low of 16.48 a break of which could see another test of the 2 Dec low of 16.31. Under that would eventually open the way to the minor double bottom at 16.16 and possibly 16.00. Buying dips seems to be the plan but I would leave a SL under 16.85.

24 Hour: Neutral Medium term: Neutral

 

Resistance Support
17.90 (61.8% of 18.98/16. 17) 16.96 Session low
17.75 Minor 16.68 6 Dec low
17.57 (50% of 18.98/16. 17) 16.48 5 Dec low
17.40 14 Nov high 16.31 2 Dec Low
17.23 (38.2% of 18.98/16. 17)/7 Dec high 16.16 25 Nov Low/23 Nov low
OIL (WTI) 50.83

WTI has had a rangebound session (49.58/50.87) leaving the outlook unchanged although it is finishing the day near its highs, suggesting we could see a squeeze towards 51.00. With the short term momentum indicators looking mixed it may be a rangebound session as we head towards the OPEC & non-OPEC countries who will meet tomorrow in Vienna. Confidence seems high that an agreement will be made, although with only 5 of the 14 members apparently turning up it would seem to  me to have a very good chance of all ending in tears.

Technically, below the 49.58 session low could see a run towards 49.00 and then to 48.50, which should be decent support. On the topside, we need to regain 51.00, above which could see a run towards the 7 Dec high of 51.17 and then to the previous day’s highs seen at 51.57 and 52.38.

Be square seems to be the best outcome ahead of the weekend as any technical levels would seem irrelevant once the outcome of the meeting is known. The dailies though do suggest that it will be the topside that comes under pressure.

24 Hour: Neutral Medium term: Neutral

 

Resistance Support
53.52 9 July 2015 high 49.58 Session low
53.00 Minor 49.15 Minor
52.38 5 Dec high 48.55 (38.2% of 42.19/52.38)
51.57 6 Dec high 48.00 Minor
51.17 7 Dec high 47.60 Minor

EURUSD: 1.0616

After a very brief spike to a high of 1.0875 following the ECB move, conveniently triggering all the stop-loss orders placed just above the 200 DMA the Euro is now sharply lower, currently trading just above the session lows of 1.0596.

The short term momentum indicators for the Euro have turned sharply lower, while the dailies which had been pointing higher have flattened out. Given there is little data due today, it may be a session of consolidation but the overall theme remains one of looking to sell into strength as we prepare for next week’s FOMC Meeting, at which it seems a racing certainty that the Fed are going to hike rates. A break of the session lows could make its way back towards Monday’s Asian low of 1.0504 and further out, below 1.0500 would eventually open the way to the March 2013 low at 1.0461. Under here 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)) and at some stage we seem destined to get there, and I suspect lower into 2017. On the topside, resistance will be seen at 1.0665 and again at 1.0700 and looking to sell into any strength seen at/near 1.0700 is the plan.

24 Hour: Mildly bearish

Medium term: Prefer to sell rallies

 

Resistance Support
1.0820 200 DMA 1.0596/90 Session low/(76.4% of 1.0504/1.0873)
1.0800 Minor 1.0540 Minor
1.0750 Minor 1.0504 5 Dec low
1.0705 100 HMA 1.0461 March 2015 low
1.0665 200 HMA 1.0400 Minor

Economic data highlights will include:

German Trade Balance, Rts/Michigan Consumer Sentiment Index, Wholesale Inventories, Baker Hughes Oil Rig Count

Meta Trader
EURUSD: 4 Hour

euro


USDJPY: 114.05

US$Jpy is higher again today, back above 114.00 but overall rangebound within its recent parameters. This looks like continuing today although if the stock markets continue their current rally it would seem plausible that Yen weakness should follow and the dollar should play some catch-up, to test 115.00 and above.

 The short term momentum indicators are once again fairly flat so another rangebound session looks possible for Friday although as before, the daily charts remain at overbought extremes so further corrections would not surprise, and this may delay any possible move to the topside. If we do see a move higher, sellers will be seen at the 7 Dec high of 114.40 and then at 114.60, at the 5 Dec high of 114.76 and at 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 level could then see a run towards 116.00 and even to 117.80 (76.4% of 121.05/98.94).

Back below 114.00, minor support will be seen at 113.85/55 and then at the Session low at 113.11.  Under 113.00 would then test the 112.85 5 Dec low, but below which there are only minor support levels until 112.00, albeit that this looks a long way off.

For the time being, a cautious stance is required although buying dips looks to be the plan but further out, heading into 2017, I suspect that we have further dollar strength ahead of us.

24 Hour: Neutral

Medium term: Neutral – Prefer to buy dips

 

Resistance Support
115.00 Psychological 113.85 100 HMA
114.82 2 Dec high 113.55 200 HMA
114.75 5 Dec high 113.11 Session low
114.60 100 DMA 112.86 5 Dec low
114.36 Session high 112.50 Minor
Meta Trader
USDJPY: 4 Hour

yen


GBPUSD: 1.2585

Cable is under pressure today, weighed down by the Euro, and despite a brief spike to 1.2700 it is now sharply lower at near session lows of 1.2548.

The daily charts have pretty much lost their previous upside momentum and with the short term momentum indicators pointing lower it would seem that Cable could remain under pressure heading into the weekend.

Below the session low would find decent support at the rising trend support seen at 1.2500, but below which there is little to hold it up until 1.2400/10.

 On the topside, resistance will be seen at 1.2600 (200 HMA) and then again at 1.2670 (100 HMA). The session high of 1.2705 looks unlikely to be seen again for a while, but above which would see minor resistance at 1.2740, ahead of the 1.2774 trend high and the 100 DMA at 1.2785.

24 Hour: Neutral – Mildly bearish

Medium term: Neutral

 

Resistance Support
1.2705 Session high 1.2548 Session high/(23.6% of 1.1821/1.2774)
1.2670 100 HMA 1.2520 Minor
1.2650 Minor 1.2500 Rising trend support
1.2630 Minor 1.2450 Minor
1.2600 200 HMA 1.2410 (38.2% of 1.1821/1.2774)

Economic data highlights will include:

UK High Court Brexit Appeal Continues Consumer Inflation Expectation, Goods Trade Balance

Meta Trader
GBPUSD: 4 Hour

gbp


USDCHF: 1.0163

A brief spike lower, to 1.0019 has been sharply reversed, with US$Chf currently sitting near session highs of 1.0177.

Once again, a cautious stance is required although the shorter term momentum indicators are pointing towards the chance of another test of 1.0200, above which we could then head on to 1.0250 and to 1.0300/25 at some stage. On the downside, support will be seen at 1.0100/15 and then below here at 1.0070 although this looks unlikely to be seen again today. With the weekly charts still looking positive, we could eventually be in for a sterner test of 1.0200,  and then higher heading into 2017.

24 Hour: Mildly bullish

Medium term: Neutral – Prefer to buy dips

                                                                

Resistance Support
1.0300 Minor 1.0115 200 HMA
1.0255 22 Nov high 1.0095 100 HMA
1.0223 2 Feb high 1.0065 7 Dec low
1.0204 30 Nov high 1.0048  (23.6% of 0.9548/1.0204)/6 Dec low
1.0177/81 Session high/5 Dec high 1.0000 Psychological
Meta Trader
USDCHF: 4 Hour

chf


AUDUSD: 0.7461

The Aud made it to 0.7507 before turning sharply lower following the ECB announcement, although in the bigger scheme of things it remains within the recent 0.7400/0.7500 band, having bounced off a session low of 0.7428.

Technically, the daily momentum indicators are now beginning to flatten out after having previously tilted towards higher levels. However if we do see another squeeze to the topside we could be in for a similar result as yesterday, where minor resistance will arrive at around 0.7480 and then again at the 0.7500/07 level and at 0.7520, which should be strong (200 DMA). On the downside, the initial support now lies at 0.7430 and then at 0.7400/10, a break of which could then head back to the recent support at 0.7360/70. Under there could then see a move towards 0.7335 and then to 0.7300/10 although this looks over the horizon in the near term.  Watch out for the China CPI. I prefer to trade from the short side today, but without looking for too much.

24 Hour: Prefer to sell rallies

24 Hour: Prefer to sell rallies.

 

Resistance Support
0.7570 16 Nov high 0.7428 Session low
0.7542 50% pivot of 0.7777/0.7310 0.7415/11 7 Dec low/5 Dec low
0.7522 200 DMA 0.7400 2 Dec Low
0.7507 Session high 0.7363/61 24 Nov low/22 Nov low
0.7480 Minor 0.7345 Minor

Economic data highlights will include:

Home Loans, Investment Lending for Homes, China CPI, PPI

Meta Trader
AUDUSD: 4 Hour

aud


NZDUSD: 0.7178

Having reached 0.7220, the Kiwi is now back down at 0.7170 after having recovered from a kneejerk drop to 0.7145 in the flow-on from the ECB decision.

While the daily momentum indicators still look mildly constructive the short term charts are beginning to point lower, so another choppy session may lie ahead, once again largely contained within the 0.7100/0.7200 range. On the topside, resistance will be seen at 0.0.7200 and again at  the session high of 0.7220, a break of which could see a move to 0.7240, although probably not today

On the downside, buyers will again be seen at 0.7145 and then on an approach towards 0.7100. Below this, possibly unlikely today, would find buyers at 0.7085/90 and at the 5 Dec lows around 0.7070. Under there, look for another run towards 0.7035, where the 200 DMA previously propped it up. I am pretty neutral today, but possibly looking for a minor test lower.

24 Hour: Neutral

Medium term: Prefer to sell rallies

 

Resistance Support
0.7236 (61.8% of 0.7400/0.6983) 0.7145 Session low
0.7225 Minor 0.7120 200 HMA
0.7220 Session high 0.7093 5 Dec low
0.7200 Minor 0.7068 5 Dec low
0.7185 Minor 0.7035 200 DMA

Economic data highlights will include:

Electronic Card Retail Sales

Meta Trader
NZDUSD: 4 Hour

nzd

The post 9 Dec: Euro lower after ECB decision. Stocks at new highs – again. China CPI in focus today. appeared first on FX Charts Daily.