9 Feb: RBNZ Unchanged. Article 50 for Brexit triggered. Minor data day may mean another rangebound session.

By | February 9, 2017
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 Markets were generally rather flat on Wednesday, with stocks stuck in their recent range, although the dollar reversed early gains after coming under pressure from a decline in U.S. Treasury yields as investors priced out a March rate hike by the Fed, amidst the uncertainty over Donald Trump’s economic policies. The main interest was in Gold, which continued its recent gains and made a new 3 month high.

Today gets off to a flying start with the RBNZ Interest Rate Decision (rates left unchanged), Monetary Policy Statement, Press Conference and then a speech from the Governor, Wheeler. Japan will have some secondary data, and Australia, the NAB Business Conditions/Confidence and the Home Loans figures for January. The EU is pretty much empty today while US does not have too much to go on (Jobless Claims, Wholesale Inventories) but both the Fed’s Evans and Bullard will be talking late in the day.

EURUSD: Lower in early Europe, before jumping on the back of soft US Treasury yields, leading to a softer US$, and then settling almost unchanged from the previous session.

USDJPY: Rangebound either side of the 112.00 pivot.

GBPUSD: Rangebound. Underpinned by EU woes, which saw flows head into Sterling through the EURGBP cross, but unable to make any further topside advantage due to ongoing Brexit concerns. The UK House of Commons has just voted  by  a majority of 372, to give the Article 50 bill on Brexit  its third reading. Cable unchanged.

AUDUSD: Flat, although possible bear pressure emerging.

NZDUSD: RBNZ leave rates on hold. NZD lower.

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US STOCKS: Flat.

ASX:  Squeezing a little higher

METALS: Gold/Silver both see 3 month highs before running into good resistance.

OIL: WTI initially headed lower after U.S. crude stockpiles surged last week (13.8 mio barrels against expectations of 2.5 mio), driven by a big rise in imports and inventory build, and then reversed after gasoline drew down unexpectedly (- 869,000 barrels, versus expectations of + 1.1 million-barrel), to finish slightly higher on the day.

CURRENCIES
EURUSD: 1.0687
Res  1.0715  1.0755  1.0800
Sup  1.0640  1.0620  1.0585
USDJPY: 112.05
Res  112.55  113.00  113.45
Sup  111.60  111.35  111.10
GBPUSD: 1.2531
Res  1.2550  1.2575  1.2600
Sup  1.2500  1.2475  1.2425
USDCHF: 0.9955
Res  0.9980  1.0005  1.0045
Sup  0.9930  0.9900  0.9860
AUDUSD: 0.7630
Res  0.7650  0.7665  0.7680
Sup  0.7610  0.7590  0.7570
NZDUSD: 0.7248
Res  0.7275  0.7300  0.7330
Sup  0.7240  0.7220  0.7200
INDICES / COMMODITIES
S+P: 2291
Res  2294  2300  2310
Sup  2282  2270  2262
DJI: 20007
Res  20050  20085  20100
Sup  19950  19900  19830
ASX SPI: 5602
Res  5612  5626  5644
Sup  5588  5578  5558
GOLD: 1240
Res  1246  1254  1266
Sup  1230  1220  1210
SILVER: 17.75
Res  17.85  18.00  18.20
Sup  17.55  17.45  17.25
OIL (WTI): 52.40
Res  52.65  53.00  53.40
Sup  52.00  51.20  50.70

 

Indices/commodities
S&P Futures 2291
The S+P has traded another 10 point range on Wednesday but remains within its recent range and a fairly neutral stance is again required. As we said before, while the 4 hour/daily momentum indicators remain flat, the weekly charts are overbought and may be in the process of rolling over so the risk would seem to lie on the downside, although for the coming session a similarly tight range looks likely.

2280 has been the session low, which may again hold, but below which could then turn back to the 3 Feb low of 2270 and then to further bids at around 2260 and again at 2250. This currently looks remote, although below 2250 would open the way towards 2235 and on to the 30 Dec low of 2227. On the topside, above the minor double top at 2293 would then allow a retest of 2300, and if that can be taken out, we are in blue sky territory. At this stage, trading from the short side is slightly preferred, with a SL placed tight above the all time high of 2299.

24 Hour: Mildly bearish Medium Term: Neutral
Resistance Support
2315 Minor 2280 Session low
2310 Minor 2270 3 Feb low
2305 Minor 2264/2262 3 Feb low/1 Feb  low
2299 27 Jan/All time high 2248 12 Jan low
2295 7 Feb high 2235 (23.6% of 2028/2299)
DJI Futures 20007
Ditto S+P. The DJI finished right on the 20000 pivot, leaving little to change the outlook. On the topside, further gains could see another assault on the 20084 all time high, beyond which would head into blue sky territory.  Having said that, as with the S+P, some caution is warranted and further choppy range trade near current levels appears to be in store. On the downside, support will be seen at 19900/50 area and again at 19850 and for now, trading the range with a tight SL placed above the all time high or below the 19931 6 Feb low seems to be the plan.
24 Hour: Neutral – Prefer to sell rallies Medium Term: Neutral
Resistance Support
20300 Minor 19931 6 Feb low
20200 Minor 19900/850 200 HMA /100 HMA
20150 Minor 19782 3 Feb low
20100 Minor 19734/12 3 Feb low/1 Feb  low
20084 7 Feb high /All-time high 19607 19 Jan low
ASX SPI 5602
The ASX is back at the 5600 pivot, which could continue to attract, although the 4 hour charts hint at the possibility of a slight squeeze to the top side, where, above 5610/50 could head back to 5625 and even to the 5645 chart gap from 27th Jan although that seems unlikely today. On the downside, support will be seen at 5590/80, below which could head back to the session low of 5558 although this seems equally unlikely. The daily momentum indicators are turning flat, so some choppy trade appears to be in store for coming sessions.
24 Hour:  Neutral Medium Term: Neutral
Resistance Support
5700 Minor 5590 200 HMA
5668/70 27 Jan high/19 Jan high/50% of 5789/5555 5577 100 HMA
5645 Chart Gap 5558 Session low
5625/23 2 Feb high /3 Feb high 5526 7 Feb low
5611/12 Session high/ 3 Feb high 5498 (38.2% of 5029/5789)
GOLD 1240
Gold was the main attraction on Wednesday, heading higher to meet the strong resistance seen at the 200 WMA, at 1244. This should continue to see decent offers, but the daily/weekly momentum indicators remain constructive and a topside break seems possible, which could see a run towards 1255 and then to 1265. On the downside, support will be seen at the session low of 1230, below which would find bids nearby, at the rising trend support, seen at 1225 and which if seen would seem to provide a buying opportunity with a tight SL placed below 1220. Under here could see a return to 1200 although for now this seems unlikely.
24 Hour: Prefer to buy dips Medium Term: Mildly bullish
Resistance Support
1275 Minor 1230 Session low
1263 200 DMA 1222 100 DMA
1255 (61.8% of 1337/1222) 1207 3 Feb low
1248 (50% pivot of 1375/1222) 1200/1198 100 WMA /2 Feb low
1244 200 WMA /Session high 1188 30 Jan low
SILVER 17.75
Silver had another solid session, following in Gold’s wake, by heading up to meet the 200 DMA at 17.85, before settling slightly lower. The momentum indicators are generally mildly constructive, so another run to 17.85 would not surprise, above which could see even stronger resistance at 18.00. A break of this would allow 18.20 and even 18.40/45, which if seen should again be strong.

On the downside, support will be seen at the 17.62 low, below which would find bids at 17.45/55. Back under the 6 Feb low of 17.45 could see a return to Fibo support 17.35, although this seems unlikely, but below which could see a return to 17.00. From the look of the daily charts, buying dips still seems to be the plan, with SL probably now placed under 17.45.

24 Hour: Prefer to buy dips Medium Term:  Mildly bullish
Resistance Support
18.65 Minor 17.55 7 Feb low
18.45 Descending Trend Resistance 17.45 6 Feb low
18.20 (76.4% of 18.98/15.63) 17.35 (23.6% of 15.63/17.85)
18.00 200 WMA 17.23 3 Feb low
17.85/86 200 DMA /Session high 17.00 (38.2% of 15.63/17.85)
OIL (WTI) 52.40
WTI has seen a sharp turnaround from the 51.20 session low to finish the day at 52.40.

It looks set to remain very choppy, but the 4 hour charts have turned to point higher and if the day’s high of 52.64 can be overcome, then a return to 53.00 should be on the cards, above which we could then see a return to minor resistance at 53.40 and beyond there, to 54.10/30. On the downside, below today’s 51.20 low, which currently looks someway off, further support will be seen at 51.00/50.70 which if/when seen should be strong.

From a more structural perspective, on the downside, we could yet see a re-test of the H/S neckline, now lower at at 50.10 (targeting 82.00), which should also be strong support if we see it, so I still prefer to buy dips near 51.00, but back under 50.00 would break below the neckline and could then open the way to 49.00 and possibly towards the 200 DMA at 47.00. As before, keep a SL on structural long positions, either on a break below 50.10 or at around 49.20. Nearer home, short term SL should be placed under today’s session low.

24 Hour: Neutral Medium Term: Cautiously long
Resistance Support
55.21 3 Jan high 51.70 Minor
54.19/31 3 Feb high /6 Jan high 51.20 7 Feb low/Session low
54.10 6 Feb high 50.70 10 Jan low
53.05 100 HMA/200 HMA 50.20/10 (38.2% of 42.18/55.21) / Reverse Head/Shoulders Neckline
52.64 Session high 49.95/98 100 DMA /15 Dec low

EURUSD: 1.0687
An early dip in EurUsd to 1.0640 was quickly reversed as US Treasury yields fell, taking the US$ to the session high of 1.0713, before settling back under 1.0700, leaving the outlook largely unchanged. A nimble stance is again required, given the mixed look of the 4 hour/daily momentum indicators.  While the 4 hourlies hint at the chance of another test of 1.0700+, the dailies appear to be rolling over to point lower and below 1.0640 would open the way to 1.0620/00 although below here looks unlikely in the short term. If wrong, further decent support lies in the 1.0580/90 area, but a break of which could see a quick run to 1.0520.

On the topside, the 4 hour charts look slightly more positive, so a run back to the session high at 1.0713 may lie on the cards, above which would run into decent offers at around 1.0750 but beyond which there is not too much to stop it heading towards 1.0800. Further out, if the Euro can find some legs, then once back above 1.0800, – which won’t be easy –  we would see sellers at the 1.0829, 3 Feb high, above which there is not too much to stop it heading on to 1.0900 and possibly higher, with the next Fibo level being at around 1.0940.

Today could be similar to yesterday, given the lack of any major data, and a range of 1.0640/1.0740 would not surprise.

24 Hour: Mildly bullish Medium Term: Prefer to sell rallies
Resistance Support
1.0855 Weekly Kijun 1.0660 Minor
1.0825/28 38.2% of 1.1616/1.0340 /Daily cloud top / 2 Feb high 1.0640 Session low
1.0797/90 3 Feb high /6 Feb high 1.0620 30 Jan low
1.0749 7 Feb high 1.0588 19 Jan low
1.0713 Session high 1.0578 16 Jan low

Economic data highlights will include:

German Trade Balance, US Jobless Claims, Wholesale Inventories

Meta Trader
EURUSD: 4 Hour


USDJPY: 112.05
US$Jpy again tested the increasingly strong support at 111.60, which has so far held and allowed a bounce for the pair to currently sit back at the familiar 112.00 pivot.

The 4 hour/daily momentum indicators are mixed and a similar range (111.62/112.53) would not surprise for the coming session. On the downside, if 111.55/60 is taken out, then further, strong support arrives at 11.35/40, below which could see 111.10/00 come under pressure. On the topside, resistance will be seen at the session high, at 112.53, above which could see a run back to the 6 Feb high of 112.77 although this looks some way off at the moment.

It looks set to remain volatile  within the range today, but trading structurally from the short side, selling rallies is mildly preferred.

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
Resistance Support
113.94 1 Feb high 111.62/58 Session low/7 Feb low
113.45 3 Feb high 111.35 28 Nov low/Weekly cloud top/100 DMA
113.27 (23.6% of 118.66/111.61 111.10 (38.2% of 98.94/118.66)
112.77 6 Feb high 110.85 23 Nov ’15 low
112.53/57 Session high /7 Feb high 110.70 55 WMA

Economic data highlights will include:

Foreign Bond/Stocks Investment, Machinery Orders .

Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2531
Cable has finished the day on a positive note, towards the higher end of the 1.2475/1.2550 range although with the 4 hour/daily momentum indicators looking rather mixed it may be difficult to carry on the positive momentum in the coming session. A return to the topside, as suggested by the 4 hour charts,  will find offers at the 1.2550 session high and then at 1.2565, at 1.2600 and at 1.2640. The downside will see bids below 1.2500 at the 1.2475 session low, below which would open the way to 1.2460 and possibly to 1.2430.

It looks set to remain choppy and London has yet to have the chance to trade the passing of the Article 50 bill which might cause some exaggerated volatility in early European trade. Overall I prefer to trade from the long side with a SL placed under 1.2475.

24 Hour: Prefer to buy dips. Medium Term: Neutral
Resistance Support
1.2640 Minor 1.2473 Session low
1.2600 Minor 1.2458 100 DMA
1.2565 (61.8% of 1.2706/1.2346) 1.2430 Daily cloud top
1.2549 Session high 1.2385 Daily cloud base
1.2525 Daily Tenkan 1.2346 (50% pivot of 1.1980/1.2705)/7 Feb low

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Meta Trader
GBPUSD: 4 Hour


USDCHF: 0.9955
Having reached parity, the dollar then quickly fell to 0.9930 as pressure mounted on the back of soft US Treasury yields, before a late squeeze back to 0.9955.

The 4 hour/daily momentum indicators are mixed and a similar session, confined to 0.9900/1.000 would seem likely in the day ahead. The dailies still seem to be turning to point slightly higher and if 1.0000/10 can be overcome expect to see a run toward 1.0050. On the downside, support will be seen at 0.9930 and below there at 0.9900. A break of this would find further support at the 200 DMA 0.9875, but possibly not today.

24 Hour: Neutral Medium Term: Prefer to buy dips
Resistance Support
1.0094 20 Jan high 0.9930 Session low
1.0075 Minor 0.9903 7 Feb low
1.0042/45 (38.2% of 1.0335/0.9860) 30 Jan high 0.9869/75 3 Feb low/200 DMA
1.0006 7 Feb high 0.9860 1 Feb  low
0.9985 Minor 0.9850 61.8% of 0.9549/1.1343

.

Meta Trader
USDCHF: 4 Hour


AUDUSD: 0.7630
The Aud has been choppy, within its recent range above 0.7600, on Wednesday and may remain so until the Statement on Monetary Policy due on Friday, although the RBA Governor Lowe will be speaking today and may create some waves.

The 4 hour momentum indicators are flat, and the session high of 0.7665 could well cap it today although a break could take us back to the 0.7683 6 Feb high, above which, we have a minor double top at 0.7695, which would see sellers ahead of 0.7700. A break above this area would allow a move towards the descending trend resistance at 0.7755 and to the November high of 0.7777. I don’t see this happening for quite a while, if at all, but the monthly charts do remain positive so should not be ruled out.

The downside will again find support at 0.7610 and then again in the 0.7590/0.7600 area. If we were to go under 0.7590 then look for a run towards 0.7670 and possibly to 0.7440.

For today look for 0.7600/0.7570 to cover it.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
0.7777 8 Nov high 0.7611 Session low /200 HMA
0.7755 Descending trend resistance 0.7590/92 19 Jan low/(38.2% of 0.7160/0.7695)
0.7695 3 Feb high/3 Feb high 0.7570 13 Jan low
0.7680/83 7 Feb high/6 Feb high 0.7550/41 2 Feb low/1 Feb  low
0.7665 Session high 0.7428 (50% pivot of 0.7160/0.7695)

Economic data highlights will include:

Investment Lending for Homes, Home Loans, NAB Business Conditions/Confidence, RBA Governor Lowe Speech.

Meta Trader
AUDUSD: 4 Hour


NZDUSD: 0.7248
The RBNZ have left rates on hold, as expected, resulting in a quick drop in the Kiwi from 0.7300 to a low, so far, of 0.7250, with the Statement/Press Conference coming up shortly, to be followed later by a speech from the Governor.

The momentum indicators are offering little guide, but the dailies are possibly in the process of rolling over after having become rather overbought, and if we do head lower we are going to see good buyers in the 0.7220/40 area, where the rising trend support at 0.7220 will see good buyers, ahead of 0.7200. A break of 0.7200 could see a quick run to 0.7165. Possibly not yet.

On the topside, resistance will again be seen at 0.7300, above which could revert to the session high of 0.7333 although this seems unlikely.  Above this could then see the 1 Feb high of 0.7349, and then further out towards the 8 Nov high of 0.7400 and even the 9 Sept high of 0.7413, albeit that this is over the horizon.

I still prefer to sell into strength, looking for a return to 0.7200 and eventually to  0.7160/70..

24 Hour: Neutral Medium Term: Turning mildly bearish – Prefer to sell rallies
Resistance Support
0.7400 20 Aug high 0.7250 Session low
0.7364 9 Nov high 0.7241/42/46 2 Feb low/3 Feb low  /3 Feb low
0.7349 1 Nov high 0.7232 3 Feb low/(23.6% of 0.6857/0.7350)
0.7333 Session  high 0.7220 26 Jan low/Rising trend support
0.7295 200 HMA 0.7175 23 Jan low

Economic data highlights will include:

RBNZ Interest Rate Decision, Monetary Policy Statement/Press Conference, Wheeler Speech.

Meta Trader
NZDUSD: 4 Hour