10 Jan: Sterling weaker, Yen firm. China CPI/Australian Retail Sales ahead.

By | January 10, 2017

 

Currency markets are mixed at the end of Monday trade, with the dollar heading lower against the safe-haven yen due to reduced appetite for risk, but higher against Sterling, which sank to levels last seen in October on talk that Britain would head for a hard Brexit following some weekend comments from UK PM, May. The commodity bloc have ended up having a solid session, as have the metals, with both Gold and Silver trading on a firm note. Oil on the other hand is lower, with WTI falling by 3% due to renewed concerns that record Iraqi crude exports and rising U.S. output could undermine the OPEC decision to reduce output. Stocks have been mostly rangebound, trading with a slightly heavy tone.

Most of the action today seems likely to occur in Asia, where the Australian Retail Sales (exp 0.4%mm) and the China CPI (exp 0.3%mm, 2.3%yy) and PPI (exp 4.5%yy) are due. Elsewhere it is looking relatively thin for economic data and appears set to be a fairly rangebound session. There is little of consequence too come either from the EU or from the US although the Fed’s Rosengren will be speaking late in the day

CURRENCIES
EURUSD: 1.0567
Res  1.0585  1.0620  1.0650
Sup  1.0540  1.0510  1.0475
USDJPY: 116.13
Res  116.50  116.80  117.00
Sup  115.95  115.70  115.05
GBPUSD: 1.2159
Res  1.2195  1.2240  1.2285
Sup  1.2125  1.2080  1.2050
USDCHF: 1.0154
Res  1.0200  1.0220  1.0240
Sup  1.0100  1.0080  1.0035
AUDUSD: 0.7360
Res  9111.4740  9507.2270  9875.3690
Sup  8697.3140  8329.1720  7915.0120
NZDUSD: 0.7017
Res  0.7045  0.7075  0.7100
Sup  0.6990  0.6950  0.6930
INDICES / COMMODITIES
S+P: 2265
Res  2278  2290  2300
Sup  2254  2240  2230
DJI: 19826
Res  19925  19960  19990
Sup  19755  19685  19605
SPI200.fs: 5751
Res  5770  5790  5815
Sup  5745  5725  5700
GOLD: 1184
Res  1186  1194  1200
Sup  1170  1160  1150
XAGUSD: 16.63
Res  16.70  17.00  17.20
Sup  16.40  16.15  16.00
OIL (WTI): 51.89
Res  52.10  52.55  52.90
Sup  51.50  51.00  50.45

 

Indices/commodities
S&P Futures 2265
The S+P is a bit lower on Monday, not helped by the energy sector which fell on the back of the lower oil price, and with the shorter-term momentum indicators looking rather heavy, we may be in for a sterner test of 2250 and possibly lower. Given the comparative lack of data today it may be a rangebound session ahead, although we are only a Tweet away from the incoming President to change the outlook entirely! The weeklies though remain positive, so buying dips would seem to t be the longer term theme.
24 Hour: Mildly bearish Medium Term: Prefer to buy dips – tight SL
Resistance Support
2300 Minor 2263 Session low
2290 Minor 2258 6 Jan low
2280 Minor 2240 Minor
2277 All-time high/14 Dec high/6 Jan high 2225 30 Dec low
2273 Session high 2218 (23.6% of 2028/2277)
DJI Futures 19826
Ditto S+P. Mildly bearish short term, but prefer to buy dips for the longer term trade. SL sub 19650.
24 Hour: Mildly bearish Medium Term: Prefer to buy dips – tight SL
Resistance Support
22000 Minor 19815 Session low
21000 Minor 19758 6 Jan low
20000 Minor 19700 Minor
19964 All-time high/14 Dec high 19660 30 Dec low
19924/20 6 Jan high/Session high 19600 Minor
SPI200.fs 5751
The ASX headed quickly up to 5789 on Monday before profit taking set in, pushing the SPI back to 5750, where we currently sit while waiting on the domestic Retail Sales and the Chinese inflation data. Although the short term momentum indicators look a little heavy, the dailies still point higher so a return to the 5790 area would not surprise at some stage, above which there really is not too much resistance ahead of the 29 May 2015 high at 5814, and beyond that, the 5 May 2015 high of 5889. On the downside, minor support will be seen at 5720, 5700 and at 5680, with the rising trend support currently seen at 5655. Buying dips seems to be the plan.
24 Hour:  Prefer to buy dips Medium Term: Mildly bullish
Resistance Support
5850 Minor 5722 Session low
5814 29 May 2015 high 5706 6 Jan low
5800 Minor 5680 Minor
5789 Session high 5655 Rising trend support
5770 Minor 5615 30 Dec low
GOLD 1184
As elsewhere, while the momentum indicators are mixed, we should expect some choppy but rather directionless trade. At this stage the dailies remain well underpinned, so buying dips seems to be the plan although if we do make it back above the session high of  1186, there is some fairly stiff resistance all the way to 1200. Look for 1170/90 to cover it for now.
24 Hour: Neutral Medium Term: Prefer to buy dips.
Resistance Support
1215 23 Nov high 1171/70 Session low/(23.6% of 1122/1185)/6 Jan low
1201 100 WMA 1161 (38.2% of 1122/1185)
1198 28 Nov high 1154 (50% pivot of 1122/1185)
1188 2 Dec high 1146 (61.8% of 1122/1185)
1186 Session high 1137 (76.4% of 1122/1185)
XAGUSD 16.63
Silver traded at 16.41/70 range on Monday and it would appear that we might expect something similar today. Further out, the daily charts still  look mildly underpinned, so if we do take out 16.70/75, we could head on to 17.00 although I would be surprised to see it up there in the near term. We are still sitting right on the 100 WMA (Weekly moving Average) and this could continue to act as a pivot in the days ahead.
24 Hour: Neutral Medium Term:  Prefer to buy dips
Resistance Support
17.90 Minor 16.41 Session low
17.30 (50% of 18.98/15.63) 16.25 6 Jan low/200 HMA
17.21 7 Dec high 16.00 Minor
16.90 (38.2% of 18.98/15.63) 15.83 30 Dec low
16.71/69 5 Jan high/Session high 15.63 20 Dec low
OIL (WTI) 51.89
WTI fell heavily on Monday, from a high of 53.80, on concerns over the viability of the OPEC deal to cut production, and not assisted by indications of increased drilling activity in U.S. which would offset the OPEC deal. Technically the long term reverse Head/Shoulders, mentioned before, currently remains viable, although a break below the neckline at any time (50.70) would nullify this and could see a quick move lower.  If long, I would leave the SL just under 50.00, but as long as 50.80 holds, the head/shoulder formation has an objective of 82.00. This seems more or less improbable, but you never know!! In the short term, look for a choppy range of 50.70/54.00 to cover it.
24 Hour: Neutral Medium Term: Prefer to buy dips – Tight SL sub 50.00
Resistance Support
55.21 3 Jan high 51.83 Session low
54.29 6 Jan high 51.50 Minor
53.80 Session high 50.70 Rising trend support/ Reverse Head/Shoulders Neckline
53.50 200 HMA 50.00 Psychological
53.00 Minor 49.58 8 Dec low

EURUSD: 1.0567
The Euro is slightly firmer after a choppy session and it could be a similar session ahead given the comparative lack of any data to provide direction on Tuesday. The short-term momentum indicators are not providing any real inspiration although the daily charts still point higher so a sterner test of 1.0600 would not really surprise, above which could see a run towards stronger resistance in the 1.0650/75 area. In the longer term though I still prefer to sell into strength given that the US data generally remains firm and the Fed look likely to raise rates again while the ECB are going to remain on hold for the foreseeable future and will continue with their QE programme through 2017. Look for something like 1.0520/1.0620 to cover it, possibly heading a bit higher to 1.0675.
24 Hour: Mildly bullish Medium Term: Prefer to sell rallies
Resistance Support
1.0702 (38.2% of 1.1299/1.0340) 1.0540 Minor
1.0675 55 DMA/(61.8% of 1.0873/1.0340) 1.0510 (38.2% of 1.0340/1.0624)
1.0650 30 Dec high 1.0478 (50% pivot of 1.0340/1. 0624)
1.0620 6 Jan high 1.0443 (61.8% of 1.0340/1. 0624)
1.0582 Session high 1.0405 (76.4% of 1.0340/1. 0624)

 Economic data highlights will include:

T: US NFIB Business Optimism Index, Wholesale Inventories, Fed’s Rosengren Speech

Meta Trader
EURUSD: 4 Hour


USDJPY: 116.13
Having made it up to 117.53 early in the session, the dollar has since turned lower as the Yen strengthened on the back of some risk aversion, set in place by the selloff in Sterling, which in turn placed GbpJpy under pressure. The indicators generally look rather negative and it could be that we will see the dollar maintain its soft tone over the next session or two, with a chance to test 115.  Below 115.00, good support begins to emerge in the 114.10/50 area which may present a buying opportunity, should we see it. Overall though the wide sideway range looks set to continue, with the top being at around 118.50.
24 Hour: Mildly bearish Medium Term: Neutral
Resistance Support
117.77 (76.4% of 118.60/115.06) 115.95 Session low
117.53 Session high 115.70 Minor
117.25 (61.8% of 118.60/115.06) 115.50 Minor
116.95 200 HMA 115.06 6 Jan Low
116.50 Minor 114.80 Minor

 Economic data highlights will include:

T: Consumer Confidence Index

Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2159
Sterling fell hard on the prospect of a hard Brexit and is finishing the day towards the bottom of its range but above the low of 1.2123. The momentum indicators appear to suggest that Cable will remain under pressure and trading from the short side is again preferred.  Selling into strength once again seems to the plan, with a SL placed above 1.2280 but looking for a continuation of the move lower, with 1.2050 the next major support.
24 Hour: Mildly bearish Medium Term: Prefer to sell rallies
Resistance Support
1.2358 76.4% of 1.2430/1.2123 1.2123 Session low
1.2312 61.8% of 1.2430/1.2123 1.2113 28 Oct low
1.2275/80 50% of 1.2430/1.2123 / 200 HMA 1.2081 25 Oct low
1.2240 38.2% of 1.2430/1.2123 1.2050 (76.4% of 1.1821/1.2773)
1.2195 23.6% of 1.2430/1.2123 1.2000 Psychological

 Economic data highlights will include:

NIESR GDP Estimate

Meta Trader
GBPUSD: 4 Hour


USDCHF: 1.0154
USDChf traded a tight 50-point range on Monday and it looks as though we could be in for something similar today. The dailies are pointing lower so a sterner test of 1.0090/1.0100 may be in order, below which a run to 1.0000 may be seen. On the topside, sellers will be seen at 1.0200 and again at 1.0240.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.0300 Minor 1.0141 Session low
1.0275 (76.4% of 1.0335/1.0089) 1.0100 Minor
1.0240 (61.8% of 1.0335/1.0089) 1.0089 6 Jan low
1.0210 (50% pivot of 1.0335/1.0089) 1.0035 30 Dec low
1.0196 Session high 1.0000 Psychological

 Economic data highlights will include:

T: Unemployment

Meta Trader
USDCHF: 4 Hour


AUDUSD: 0.7360
The Aud ended up having a solid session assisted by a firmer iron ore price as well as the softer US$. Today’s direction will come via the Retail Sales and the China CPI. Technically, the short-term momentum indicators are now looking a little more positive, and with the dailies also looking underpinned, a test of 0.7400+ may lie ahead, depending on the outcome of the data, and as we said before, a wide range of something like 0.7150/0.7450 (100 DMA) would seem to cover it for a while to come. I still prefer to sell into strength for the longer-term trade given that the weeklies still look negative.
24 Hour: Mildly bullish Medium Term: Neutral
Resistance Support
0.7450 Minor 0.7330 Minor
0.7435 (76.4% of 0.7524/0.7160) 0.7300 Minor
0.7400 Minor 0.7286 Session low/100 HMA
0.7385 (61.8% of 0.7524/0.7160) 0.7250 200 HMA
0.7373 Session high 0.7225 Minor

Economic data highlights will include:

T: Retail Sales (Nov), China CPI, PPI, FDI

Meta Trader
AUDUSD: 4 Hour


NZDUSD: 0.7017
As with the Aud, the Kiwi ended up having a solid session, and with the short-term and daily momentum indicators now aligned higher we may see a test of the 200 DMA, above which could allow a run to 0.7100+. Looking further out, a wider range of something like 0.6850/0.7150 would seem to cover it and I still prefer to sell into strength, but at this stage it does not appear that we are going anywhere to fast directionally, and a wide range trade seems to more likely outcome.
24 Hour: Mildly bullish Medium Term: Neutral
Resistance Support
0.7115 Minor 0.6980 Minor
0.7093 (61.8% of 0.7238/0.6857) 0.6948 Session low
0.7075 200 DMA 0.6930 Minor
0.7042/48 6 Jan high/ (50% pivot of 0.7238/0.6857) 0.6900 Minor
0.7032 Session low 0.6885 3 Jan low
Meta Trader
NZDUSD: 4 Hour