2016-12-18

Markets were relatively mixed on Friday following the gyrations seen on Thursday after the FOMC announcement, with the notable exceptions of the Aud and the Kiwi both of which collapsed by around 1% against the dollar and also made considerable losses on the crosses. There was no particular reason for the move although commodities in general, including the base metals, had a tough week which weighed on the commodity bloc currencies. US$Jpy was also lower, hit by the escalation of tensions in the South China Sea, while the European majors all managed a minor recovery. Stocks were steady while oil was a little higher.

This week will see a wind down heading into Christmas although Thursday will be active, with a heavy schedule from the US, including the Q3 GDP, Durable Goods Orders, Personal Consumption/Expenditure and Chicago Fed National Activity Index. Monday will kick off with the German IFO Business Climate/Expectations and that aside it will be mostly secondary data as we head towards the break. One thing to look out for that may cause some ripples is the Australian MYEFO due on Monday. There has been a lot of talk recently about the chances of a cut in the Australian Credit Rating, and this week’s Budget Update may be the catalyst for something to happen, so worth keeping an eye

CURRENCIES

EURUSD: 1.0449

Res

1.0475

1.0520

1.0560

Sup

1.0400

1.0365

1.0335

USDJPY: 117.98

Res

118.65

119.00

119.35

Sup

117.45

117.15

116.50

GBPUSD: 1.2484

Res

1.2510

1.2540

1.2565

Sup

1.2455

1.2405

1.2375

USDCHF: 1.0265

Res

1.0310

1.0345

1.0400

Sup

1.0240

1.0225

1.0195

AUDUSD: 0.7298

Res

0.7325

0.7370

0.7395

Sup

0.7265

0.7250

0.7220

NZDUSD: 0.6958

Res

0.6970

0.7005

0.7045

Sup

0.6930

0.6890

0.6840

INDICES / COMMODITIES

S+P: 2255

Res

2268

2278

2290

Sup

2246

2234

2222

DJI: 19794

Res

19860

20000

19965

Sup

19745

19700

19600

ASX SPI: 5489

Res

5502

5520

5548

Sup

5462

5440

5410

GOLD: 1135

Res

1142

1150

1164

Sup

1122

1110

1100

SILVER: 16.11

Res

16.25

16.45

16.60

Sup

15.85

15.50

15.35

OIL (WTI): 51.99

Res

52.40

53.35

54.55

Sup

51.00

49.90

49.05

Indices/commodities

S&P Futures

2255

The S+P ranged between 2250/63 on Friday leaving the outlook unchanged

The 4 hour charts are pointing lower and the daily charts also appear to be topping out so some caution is warranted on the topside. After the recent strong run higher, there is now the chance of a minor head/shoulder topping formation, with a neckline at around 2244, an objective at around 2218, and not a lot in between to provide any support. On the topside, resistance will be seen at 2265/70 and again at the all-time high of 2777, above which would see the slow grind continue to 2300, albeit this now seems delayed for a while.

24 Hour: Prefer to sell rallies

Medium term: Mildly bearish

Resistance

Support

2280

Minor

2247

15 Dec low/ H/S Neckline

2275

Minor

2235

Minor

2277

All-time high/14 Dec high

2230

Minor

2267

15 Dec high

2225

Minor

2263

Friday high

2220

(23.6% of 2028/2276)

DJI Futures

19794

Ditto S+P. The DJI has ranged between 19762/19861 on Friday, currently at 19800. The dailies may be topping out, in which case, below the 15 Dec low of 19740 could see a run back to 19600 and possibly to 19350. On the topside, the approach to 20,000 will see plenty of sellers, but above which the relentless squeeze higher may continue. I prefer to sell into strength ahead of 20,000, with a tight SL placed just above.

24 Hour: Prefer to sell rallies

Medium term: Mildly bearish

Resistance

Support

22000

Minor

19740

15 Dec low

21000

Minor

19700

Minor.

20000

Minor

19600

Minor

19964

All-time high/14 Dec high

19500

Minor.

19894

15 Dec high

19400

Minor

ASX SPI

5489

A quick dip to 5462 on Friday in late Australian trade was quickly reversed, for the SPI to finish pretty much unchanged on the day. While the 4 hour charts suggest the chance of a similar session today, possibly using 5500 as a pivot, the daily indicators hint that it may be the downside that eventually comes under pressure, where minor support will arrive at Friday’s low, below which could see a run towards the 7 Dec low of 5447 and then to the 6 Dec low of 5422. On the topside, resistance will be seen at 5515 and at the 5550 area although that looks delayed for a while to come. Staying short and selling into strength with a SL placed above 5560 remains the preferred trade.

24 Hour: Prefer to sell rallies

Medium term: Mildly bearish

Resistance

Support

5580

Minor

5462

Friday low

5570

Minor

5457

(23.6% of 5029/5681)

5549

14 Dec high

5445

Minor

5515/20

15 Dec high/200 HMA, 100 HMA

5410

100 DMA

5502

Friday high

5388

5 Dec low

GOLD

1135

Gold jumped to a high of 1141 on the news of the US/China dispute in the South China Sea on Friday but drifted lower from there to close the week at 1134. For the time being, 1120 will continue to provide strong support, but below that would allow a move to 1100, a break of which could then see a run towards 1090 and even to 1070. While the weekly charts suggest that this could eventually happen, the dailies are now becoming oversold, and the 4 hour charts hint at the chance of another bounce, providing better levels to sell into.

If so, the topside will see offers at 1145/50 and again at 1160/65. Selling rallies is preferred although if the China/US thing gets serious, don’t be caught short!

24 Hour: Neutral

Medium term: Prefer to sell rallies

Resistance

Support

1172

(23.6% of 1337/1122)

1123/22

15 Dec low/(76.4% of 1046/1375)

1165

14 Dec high /12 Dec high

1108

28 Jan low

1157

Minor

1100

Minor

1150

Minor

1090

Minor

1141/44

Friday high 15 Dec high

1071

14 Jan low

SILVER

16.11

Silver jumped around either side of 16.00 on Friday, leaving the outlook unchanged.

The short term momentum indicators are now mixed, suggesting further choppy trade but the dailies are heading lower, and below 15.80 could quickly see a run towards 15.35/30, below which 15.00 and 14.80 would attract.On the topside, 16.25/30 will again provide minor resistance, beyond which we could see a squeeze towards 16.60, above which would then open the way towards 17.00, albeit doubtful today. Selling rallies is preferred.

24 Hour: Prefer to sell rallies

Medium term: Neutral

Resistance

Support

17.05

(38.2% of 18.98/15.88)

15.90

Friday low

16.88

200 HMA

15.50

Minor

16.60

(23.6% of 18.98/15.88)

15.35/38

11 April low/(76.4% of 13.64/21.13)

16.45

Minor

15.00

Minor

16.27

Friday high

14.78

1 April low

OIL (WTI)

51.99

Oil prices settled higher on Friday, as traders became emboldened to the fact that the Non-OPEC producers seem to be ready to adhere to their promise to cut back output.

On the topside, above Friday’s 52.06 high, the next resistance will be seen at 52.50/70 and then again at the 15 Dec high of 52.75. Beyond there could see a return to the recent 54.48 peak although this looks some way off at this stage. Support will now arrive at the neckline of the major reverse head-shoulder formation, at 51.15, and below that at Friday’s low of 50.48. Under there could see a return to 50.00/49.75, which should be strong support, but below which could see an acceleration towards 48.00/50, below which could see a run to 46.50/00

24 Hour: Neutral

Medium term: Neutral

Resistance

Support

54.48

12 Dec high

50.48

Friday low

53.30

Minor

49.92

15 Dec low

52.75

14 Dec high

49.58

8 Dec low

52.40

Minor

49.00

Minor

52.06

Friday high

48.30

(50% pivot of 42.18/54.48)

EURUSD: 1.0449

The Euro traded sideways into the weekend, squeezing a little higher against the dollar as traders took profit following the recent sell-off but leaving the overall outlook unchanged.

In the short term, 1.0365/1.0400 will provide support ahead of the 1.0334 Jan 2013 low although, as we said before, with the daily/weekly momentum indicators picking up downside momentum a test of parity would seem to be a matter of time. Indeed the head/shoulder formation, seen on the weekly charts, suggests that eventually we are heading much, much lower. In the meantime, selling rallies appears to be the plan. The short term momentum indicators still hint at the chance of a squeeze back towards 1.0490/1.0550, but I would not be looking for too much more in the short term.

24 Hour: Neutral – Prefer to sell rallies

Medium term: Mildly bearish

Resistance

Support

1.0600

Minor

1.0400

Friday low

1.0560

(38.2% of 1.0365/1.0872)

1.0365

15 Dec low

1.0520

Minor

1.0334

Jan 2003 low

1.0485

(23.6 of 1.0365/1.0872)

1.0300

Minor

1.0473

Minor

1.0250

Minor

Economic data highlights will include:

M: German IFO Business Climate/Expectations, BuBa Monthly Report US Markit Services/Composite PMIs,

T: German PPI, EU Current Account, Provisional Consumer Confidence, US API Weekly Crude Oil Stock Inventory

W: Existing Home Sales, EIA Crude Oil Stocks Weekly Change

T: Chicago Fed National Activity Index, US Personal Consumption/Expenditure/Income, Jobless Claims Q3 GDP, Durable Goods Orders, House Price Index

F: German Consumer Confidence, US Michigan Consumer Sentiment Index, New Home Sales, Baker Hughes Oil Rig Count

Meta Trader

EURUSD: 4 Hour





USDJPY: 117.98

US$Jpy was on the defensive on Friday following the escalation of tensions in the South China Sea, and unable to make any further gains beyond Thursday’s high of 118.65, the pair is now trading back at 118.00 after having recovered from a dip to 117.46.

Although technical picture suggests that the dailies remain overbought, buying dips still seems to be the plan, with a SL placed under the rising trend support, now at 115.65. It may be that we spend a while chopping around below 120.00, allowing the dailies to unwind their overbought condition, and there are easier pairs to trade right now but looking further out, with the weeklies pointing strongly higher, a retest of 125.85 (7 June 2015 high) would seem to be on the cards.

24 Hour: Prefer to buy dips

Medium term: Mildly bullish

Resistance

Support

120.00

Psychological

117.46

Friday low

119.35

(76.4% of 125.85/98.94)

117.15

Minor

118.80

Descending trend resistance

116.50

Minor

118.65

15 Dec high

116.00

Minor

118.42

Friday high

115.65

Rising trend support

Economic data highlights will include:

M: BOJ Interest Rate Decision/Statement/Press Conference

T:

W: All Industry Activity Index

T: Foreign Bond/Stocks Investment

F: Holiday

Meta Trader

USDJPY: 4 Hour



GBPUSD: 1.2484

Cable recovered from the week’s lows of 1.2375 to reach 1.2500 on Friday, and with the 4 hour momentum indicators now pointing a bit higher we could yet see a squeeze towards the previous trend support – now resistance – at around 1.2600. If we do, then with the US$ looking to remain underpinned it may well be a decent sell opportunity as Cable is unlikely to maintain its strength in the face of any weakness in the other majors. Overall, the longer term charts do not look all that negative for Sterling and as we said on Friday, a short EurGbp position might be the better trade.

24 Hour: Mildly Bullish

Medium term: Mildly bearish

Resistance

Support

1.2640

(76.4% of 1.2676/1.2375)

1.2450

Minor

1.2590

200 HMA /(61.8% of 1.2676/1.2375)

1.2400

Minor

1.2565

15 Dec high

1.2382/75

Friday low/15 Dec low

1.2550

(50% pivot of 1.2676/1.2375)

1.2300

(50% pivot of 1.1821/1.2775)

1.2510

Friday high /(61.8% 1.2676/1.2375)

1.2190

(61.8% of 1.1821/1.2775)

Economic data highlights will include:

M:

T: CBI Distributive Trade Survey – realised

W: PSNBR

T: Consumer Confidence, Q3 GDP, Total Business Investment

F:

Meta Trader

GBPUSD: 4 Hour



USDCHF: 1.0265

US$Chf has eased back from last week’s trend high of 1.0343, and in the short term further consolidation looks likely, but with the dailies leaning bullish, I think buying dips, with a SL placed, either tight at 1.0220 or preferably  under the  1.0140, 61.8% Fibo support may be the way to go.

In the longer term, the dollar has taken out all the nearby resistance levels and there is now not too much to stop it heading on towards 1.0600+. Short term dips are likely, where the downside looks supported at 1.0265/75 and 1.0220, with SL best placed below the 1.0195 low.

24 Hour: Neutral – Prefer to buy dips

Medium term: Bullish

Resistance

Support

1.0620/28

(76.4% of 1.1695/0.7080)/8 Aug 2010 high

1.0240

Friday low

1.0500

Minor

1.0225

(38.2% of 1.0019/1.0343)

1.0400

Minor

1.0195

100 HMA

1.0343

15 Dec high

1.0180

(50% of 0.9549/1.0343)

1.0310

Friday high

1.0140

(61.8% of 0.9549/1.0343)

Economic data highlights will include:

M:

T: Trade Balance

W: Q4 Quarterly Bulletin

T:

F:

Meta Trader

USDCHF: 4 Hour



AUDUSD: 0.7298

The Aud got hammered in late US trade on Friday, falling hard to a low of 0.7265 ahead of a minor bounce, to finish the week at 0.7300. The hourly charts do suggest some minor bullish divergence, and if so, selling into rallies towards 0.7330 and even 0.7360 would seem to be the way forward. The 4 hour/daily momentum indicators are both heading lower so we may not see much of a bounce and a break of Friday’s low would then open the way to 0.7220/0.7200. Further out, I think we may have started the move to 0.7000 and eventually lower. Given the potential for diverging monetary policy between the RBA/Fed heading into 2017 as well as the increasing chance of a cut in the Australian AAA credit rating, we could eventually be looking towards a move to the January lows of 0.6825. Watch out for the MYEFO, due today at midday.

24 Hour: bearish – Prefer to sell rallies

Medium term: Bearish

Resistance

Support

0.7445

200 HMA

0.7290

Minor

0.7420

Minor

0.7265

Friday low

0.7395

(50% of 0.7524/0. 7265)

0.7250

Minor

0.7364/68

(38.2% of 0.7524/0. 7265)/Friday high

0.7218

3 June low

0.7325

(23.6% of 0.7524/0.7265)

0.7200

2 June low

Economic data highlights will include:

M: WBC Consumer Survey (Q4)

T: CB Leading Economic Index, MYEFO, WBC Leading Indicator, RBA Minutes, China Leading Economic Index

W:

T:

F:

Meta Trader

AUDUSD: 4 Hour



NZDUSD: 0.6958

As with the Aud, the Kiwi got hammered in late US trade on Friday, falling hard, to a low of 0.6930 ahead of a minor bounce, to finish the week at 0.6960. The hourly charts suggest some minor bullish divergence, and if so, selling into rallies towards 0.7000 and even 0.7040 would seem to be the way forward. The 4 hour/daily/weekly momentum indicators are all heading lower though, so we may not see much of a bounce, and a break of Friday’s low would then open the way to the major rising trend support at 0.6820. Further out, given the look of the head/shoulder formation (daily chart- below) I think we may have started the move to the 0.6450 objective, albeit that it will take a while to get there. .

24 Hour: bearish – Prefer to sell rallies

Medium term: Bearish

Resistance

Support

0.7083

(50% of 0.7238/0. 6930)

0.6930

Friday low

0.7047

(38.2% of 0.7238/0. 6930)

0.6915

(61.8% of 0.6347/0.7484)

0.7025

Minor

0.6890

Minor

0.7002

(23.6% of 0.7238/0.6930)

0.6840

Minor

0.6970

H/S Neckline

0.6820

Rising trend support

Economic data highlights will include:

M: Building Permits, ANZ Activity Outlook, Business Confidence

T: Global Dairy Trade Index

W: Trade Balance

T: Q3 GDP

F:

Meta Trader

NZDUSD: 4 Hour



The post 19 Dec: US$ mixed. Aud, Kiwi lower. Liquidity becoming thin, but a heavy US data schedule this week. appeared first on FX Charts Daily.

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