12 Jan: Trump gives little economic detail. A strong bond auction follows, sending the US$ lower.

By | January 12, 2017

 

 It was all about Donald Trump on Wednesday, with traders aggressively buying the dollar and stocks, while selling commodities ahead of his press conference. That all turned around very quickly once he started speaking – but giving little away with regard to economic detail – and the dollar weakness accelerated following the very strong bid in the 10-year bond auction, sending US yields sharply lower. The dollar has bounced off its lows but has ended the session lower on all fronts, with stocks also on the defensive after Trump criticized the bio-tech/health care sector.At the end of the session, stocks are also staging a recovery.  WTI rebounded strongly from the important technical level at 50.70, finishing up 3%, while Gold is attempting to take out the important 1200 level.

Today is another thin one in terms of data, with the ECB Minutes likely to be the highlight from the EU, while the weekly Jobless Claims will cover it for the US. Traders will pay increasing attention now to anything that comes from the Trump administration ahead of the Jan 20 inauguration

CURRENCIES
EURUSD: 1.0575
Res  1.0585  1.0620  1.0650
Sup  1.0530  1.0500  1.0455
USDJPY: 115.50
Res  116.00  116.45  116.85
Sup  115.05  114.65  114.25
GBPUSD: 1.2198
Res  1.2235  1.2270  1.2320
Sup  1.2150  1.2100  1.2040
USDCHF: 1.0150
Res  1.0190  1.0215  1.0240
Sup  1.0135  1.0100  1.0085
AUDUSD: 0.7444
Res  9111.4740  9507.2270  9875.3690
Sup  8697.3140  8329.1720  7915.0120
NZDUSD: 0.7048
Res  0.7075  0.7095  0.7110
Sup  0.7030  0.7000  0.6960
INDICES / COMMODITIES
S+P: 2267
Res  2278  2290  2300
Sup  2254  2240  2228
DJI: 19850
Res  19925  19960  19990
Sup  19755  19685  19605
SPI200.fs: 5744
Res  5760  5790  5815
Sup  5720  5705  5690
GOLD: 1190
Res  1200  1210  1216
Sup  1180  1170  1160
XAGUSD: 16.73
Res  16.90  17.00  17.20
Sup  16.55  16.40  16.25
OIL (WTI): 52.13
Res  52.75  53.50  54.45
Sup  51.50  50.70  50.00

 

Indices/commodities
S&P Futures 2267
US stocks have had a volatile ride on Wednesday, heading higher before the DT press conference, with energy stocks leading the way, only to reverse sharply lower when he slammed health-care shares and suggested changes as to how America pays for its prescription drugs. Technically, the outlook is pretty much unchanged, with the 4hour/daily momentum indicators looking a little negative, while the weeklies remain positive. Buying dips would seem to be the longer-term theme although I cannot bring myself to do so at these levels and the Trump factor could easily see stocks turn ugly, very quickly. In the short term, a test of 2040 would not now surprise.
24 Hour: Mildly bearish Medium Term: Look to buy dips – with tight SL
Resistance Support
2300 Minor 2254 Session low
2290 Minor 2240 Minor
2280 Minor 2230 Minor
2277 All-time high/14 Dec high/6 Jan high 2225 30 Dec low
2269 Session high 2218 (23.6% of 2028/2277)
DJI Futures 19850
Ditto S+P. Mildly bearish in the short term, but weeklies remain positive for the longer-term trade. SL placed either, conservatively, below 19750 or under 19650.
24 Hour: Mildly bearish Medium Term: Look to buy dips – with tight SL
Resistance Support
21000 Minor 19764/58/56 10 Jan low/6 Jan low /Session low
20000 Minor 19700 Minor
19964 All-time high/14 Dec high 19660 30 Dec low
19924/20 6 Jan high/9 Jan high 19600 Minor
19903 Session high 19500 10 Jan low
SPI200.fs 5744
The ASX has traded a tight 5722/57 range on Wednesday, leaving the outlook unchanged. Although the short-term momentum indicators still look a little heavy, the dailies point higher so a return to the session high (5757) and then possibly to the 5790 area could yet be on the cards although the dailies may be building a topping formation so caution is warranted on the topside. If we do head above 5790 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, support will again be seen at, 5720, 5700 and at 5690, where the rising trend support now lies. A break of that could see a deeper decline, back towards 5600/05.
24 Hour:  Prefer to buy dips Medium Term: Mildly bullish
Resistance Support
5814 29 May 2015 high 5703 10 Jan low
5800 Minor 5690 Rising trend support
5789 9 Jan high 5650 Neutral
5770 Minor 5615 30 Dec low
5757 Session high 5605 23.6% of 5029/5789
GOLD 1190
Gold continues to head higher, today reaching 1198 although not before a swift dip to 1177 when the dollar strengthened before DT began his news conference. 1200 remains a step too far at this stage but not for much longer according to the daily charts which remain well underpinned, so buying dips seems to be the plan. If we do break above 1200, where the 100 WMA should provide decent resistance, we could see a swift run to 1215.  On the downside, buyers will be seen at 1180/85 although this looks a little unlikely to be seen again today.
24 Hour: Neutral Medium Term: Prefer to buy dips.
Resistance Support
1220 Minor 1181 100 HMA
1215 23 Nov high 1177 Session low/ (23.6% of 1122/1195)
1210 Minor 1168 (38.2% of 1122/1190)
1201 100 WMA 1159 (50% pivot of 1122/1190)
1198 Session high/28 Nov high 1150 (61.8% of 1122/1195)
XAGUSD 16.73
Silver has largely missed out on the volatility on Wednesday, trading a range of 16.53/85, leaving the outlook unchanged. The short-term momentum indicators and the daily charts still both look mildly underpinned, so if we do take out 16.90, we could head on to 17.00 and to 17.30 although I would be surprised to see it up there in the near term. The downside should now see support at the 100 WMA (Weekly moving average) at 16.70, which could still act as a near term pivot, and then at the 10 Jan low at 16.53, which provided the support and the low for today’s session.
24 Hour: Neutral Medium Term:  Prefer to buy dips
Resistance Support
18.00 Minor 16.53 10 Jan low/Session low
17.90 Minor 16.41 9 Jan low
17.30 (50% of 18.98/15.63) 16.25 6 Jan low/200 HMA
17.21 7 Dec high 15.83 30 Dec low
16.90 (38.2% of 18.98/15.63)/10 Jan high 15.63 20 Dec low
OIL (WTI) 52.13
Well, WTI managed perfectly to hold on to the neckline at 50.70 and has rebounded strongly from there to a high, so far, of 52.65 keeping the reverse H/S formation valid. As long as 50.70 holds, the head/shoulder formation has an objective of 82.00, which seems more or less improbable, but you never know – and it certainly looks better than it did yesterday! Technically the outlook remains the same. Look for a choppy range of 50.70/54.00 to cover it, with a topside break to target the 55.21 January high. On the downside, back under 50.00 could then head back to 49.00 and possibly towards the 200 DMA at 47.00. As before, keep SL on long positions either on a break below 50.70 or at around 49.20
24 Hour: Neutral Medium Term: Cautiously long – Tight SL sub 50.00
Resistance Support
55.21 3 Jan high 52.00 Minor
54.29 6 Jan high 51.00 Minor
53.80 9 Jan high 50.70 Rising trend support/ Reverse Head/Shoulders Neckline
53.05 200 HMA 50.00 Psychological
52.65 Session high 49.58 8 Dec low

EURUSD: 1.0575
Having fallen to a low of 1.0453 ahead of DT’s press conference, the Euro then rebounded against the dollar and reached 1.0622, with the dollar coming under added pressure on account of the strong bond auction. The short-term momentum indicators are mixed, but further out, the daily charts still point higher so another test of the session high would not really surprise, above which could see a run towards stronger resistance in the 1.0650/75 area. In the longer term though, as before, 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 1.0525/1.0625 to cover it today.
24 Hour: Neutral Medium Term: Mildly bullish – Prefer to sell rallies
Resistance Support
1.0815 (50% pivot of 1.1299/1.0340) 1.0550 Minor
1.0702 (38.2% of 1.1299/1.0340) 1.0520 Minor
1.0675 55 DMA/ (61.8% of 1.0873/1.0340) 1.0500 Minor
1.0651 30 Dec high 1.0478 (50% pivot of 1.0340/1. 0624)
1.0622/26 Session high/10 Jan high 1.0453/43 Session low / (61.8% of 1.0340/1. 0624)

Economic data highlights will include:

T: EU Industrial Production, ECB Minutes, US Jobless Claims, Monthly Budget Statement

Meta Trader
EURUSD: 4 Hour


USDJPY: 115.50
 US$Jpy headed up to 116.86 ahead of DT’s press conference, with positive risk sentiment underpinning the move. That began to turn ugly when the enthusiasm reversed after fiscal and regulatory stimuli were not discussed, with the dollar accelerating lower following the bond auction result. The dollar collapsed, triggering stops along the way, heading into the support area we mentioned yesterday, basing at 114.23 before rebounding strongly, to currently sit around 115.50. The momentum indicators remain mixed, and as we said before, further choppy trade above the 114.10/50 area seems likely, with 116.75/117.00 area providing the top, above which could then head on to the 118.50 area but which at this stage looks unlikely. Given the look of the daily charts selling rallies, looking for another run towards the session lows is currently preferred.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
117.00 Minor 115.05 Minor
116.86 Session high 114.65 100 WMA
116.50 Minor 114.23 Session low
116.18 100 HMA 113.80 Minor
115.80 Minor 113.50 Minor

Economic data highlights will include:

Trade Balance (Dec), Current Account (Nov), Eco Watchers Survey

Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2198
Sterling headed to a low of 1.2037 on Wednesday, not helped by Brexit concerns and added to by political upheaval in Neutral Ireland and Scotland. DT initially underpinned the dollar’s strength but that then reversed and accelerated lower following the US bond auction, with cable bouncing strongly, to 1.22 72 before settling back towards 1.2200. Technically, a cautious stance is required with the momentum indicators not telling us a great deal. While the short-term momentum indicators are now pointing slightly higher, the daily indicators appear to suggest that Cable may remain under pressure in the medium term.  Selling into strength once again seems to the plan, with a SL placed above 1.2280 but looking for a return to 1.2050/00. There are probably better things to look at right now.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
1.2400 Minor 1.2200 Minor
1.2335 76.4% of 1.2430/1.2037 1.2150 Minor
1.2280 61.8% of 1.2430/1. 2037 1.2100 Minor
1.2272 Session high 1.2050 (76.4% of 1.1821/1.2773)
1.2235 50% of 1.2430/1. 2037 1.2037 Session low
Meta Trader
GBPUSD: 4 Hour


USDCHF: 1.0150
US$Chf has bounced around within a wide range of 1.0100/1.0247 with the dollar finishing towards the lower end of it and looking as though we could see a sterner test of the 1.0090/1.0100 support, below which a run to 1.0000 may be seen. On the topside, sellers will again be seen at 1.0200 and at 1.0240/50.
24 Hour: Neutral Medium Term: Mildly bearish
Resistance Support
1.0300 Minor 1.0100 10 Jan low/Session low
1.0275 (76.4% of 1.0335/1.0089) 1.0089 6 Jan low
1.0240/47 (61.8% of 1.0335/1.0089)/Session high 1.0050 Minor
1.0210 (50% pivot of 1.0335/1.0089) 1.0035 30 Dec low
1.0180 Minor 1.0000 Psychological
Meta Trader
USDCHF: 4 Hour


AUDUSD: 0.7444
After a quick dip to 0.7351, the Aud has rebounded strongly, taking out 0.7400 and the 100 WMA at 0.7450, before heading on to 0.7471. We are currently sitting right on the 0.7450 pivot, which may continue to act as a magnate although with the momentum indicators seemingly aligning higher, a run towards 0.7500/40 should not be ruled out over the next couple of sessions.  Support now lies around 0.7400 and at 0.7350, although with the 1 and 4 hour charts pointing higher buying dips would seem to be the short-term plan. Further out though, I still prefer to sell into strength for the longer-term trade given that the weeklies still look slightly negative.
24 Hour: Mildly bearish Medium Term: Neutral
Resistance Support
0.7540 61.8% of 0.7777/0.7160 0.7420 Minor
0.7524 14 Dec high 0.7390 Minor
0.7500 100 DMA/200 DMA 0.7370 Minor
0.7471 Session high 0.7351 Session low
0.7450 100 WMA 0.7330 10 Jan low
Meta Trader
AUDUSD: 4 Hour


NZDUSD: 0.7048
The Kiwi has traded a volatile 0.6960/0.7086 range on Wednesday, finishing the session at 0.7050. The Kiwi has a similar outlook to the Aud, in that the short term and the daily momentum indicators now seem to be aligning higher, suggesting a possible test of 0.7100+. In the short term, buying dips towards 0.7000 seems to be the plan, with a SL placed under 0.6880. Looking further out, a wider range of something like 0.6850/0.7150 would seem to cover it for a while to come, and I still prefer to sell into strength although at this stage it does not appear that we are going to head much under today’s session low.
24 Hour: Mildly bearish Medium Term: Neutral
Resistance Support
0.7170 Minor 0.7040 Minor
0.7130 50% pivot of 0.7401/0.6857 0.7000 100 HMA
0.7110 Descending trend resistance 0.6980 Minor
0.7086/93 Session high/ (61.8% of 0.7238/0.6857) 0.6960/58 Session low /10 Jan low
0.7075 200 DMA 0.6948 9 Jan low

Economic data highlights will include:

ANZ Commodity Price Index

Meta Trader
NZDUSD: 4 Hour