13 Jan: US$ under pressure as Trump enthusiasm recedes. Brexit pressures weigh on Cable

By | January 13, 2017

 

 The US$ fell its lowest level in several weeks on Thursday as traders cut long positions after Donald Trump failed to make any mention of his economic strategy at his news conference in the previous session. With no guidance on any new fiscal spending or tax measures to repatriate U.S. corporate capital held overseas, the dollar lost ground on all fronts except Cable which was hit by new Brexit concerns, while stocks also fell due to the lack of clarity although they had largely recovered by the end of the session. Commodities were initially able to gain from the dollar’s weakness although some of the upside progress was lost late in the day. WTI was higher after news of Saudi production cuts.

Friday could end up being a busy session, with a speech by Fed Chair Janet Yellen due around the middle of the Asian session, coming alongside the China Trade Balance. There is not too much from Europe although later on the US has the Dec Retail Sales (exp +0.7%mm) as well as the PPI (0.3%mm, 1.6%yy; Ex Food/Energy 0.1% mm, 1.5% yy), the Michigan Consumer Sentiment Index (exp 98.5) and Business Inventories for Nov (exp 0.5%). Have a good weekend.

CURRENCIES
EURUSD: 1.0621
Res  1.0650  1.0680  1.0700
Sup  1.0600  1.0570  1.0530
USDJPY: 114.58
Res  115.10  115.55  115.95
Sup  114.00  113.70  113.25
GBPUSD: 1.2172
Res  1.2200  1.2250  1.2300
Sup  1.2150  1.2100  1.2040
USDCHF: 1.0101
Res  1.0130  1.0150  1.0180
Sup  1.0080  1.0055  1.0035
AUDUSD: 0.7491
Res  9111.4740  9507.2270  9875.3690
Sup  8697.3140  8329.1720  7915.0120
NZDUSD: 0.7112
Res  0.7140  0.7170  0.7200
Sup  0.7100  0.7075  0.7045
INDICES / COMMODITIES
S+P: 2266
Res  2270  2280  2290
Sup  2248  2240  2230
DJ30.fs: 19823.00
Res  19905.26  19933.52  19978.75
Sup  19759.39  19691.14  19509.24
SPI200.fs: 5734
Res  5760  5790  5815
Sup  5720  5705  5690
GOLD: 1196
Res  1200  1208  1216
Sup  1190  1180  1170
XAGUSD: 16.78
Res  17.00  17.15  17.30
Sup  16.55  16.40  16.25
OIL (WTI): 53.03
Res  53.50  54.35  55.20
Sup  52.50  51.75  50.75

 

Indices/commodities
S&P Futures 2266
Stocks initially headed lower on disappointment over the lack of clarity from Donald Trump at yesterday’s news conference although the S+P has since recovered from its 2048 low to close not too far away from the previous session’s levels. Technically, the outlook is pretty much unchanged, with the 4hour/daily momentum indicators looking flat, we may see further choppy trade today as we head into the US long w/e. The dailies look a little heavy, while the weeklies remain positive so there is little inspiration to come from there either. 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 surprise but I don’t see it much below there ahead of the weekend.
24 Hour: Mildly bearish Medium Term: Look to buy dips – with tight SL
Resistance Support
2300 Minor 2248 Session low
2290 Minor 2240 Minor
2280 Minor 2230 Minor
2277 All-time high/14 Dec high/6 Jan high 2225 30 Dec low
2270 Session high 2218 (23.6% of 2028/2277)
DJ30.fs 19823.00
Ditto S+P. Mildly bearish in the short term, but weeklies remain positive for the longer-term trade. SL placed below 19650.
24 Hour: Mildly bearish Medium Term: Look to buy dips – with tight SL
Resistance Support
20000 Minor 19750 Minor
19964 All-time high/14 Dec high 19692 Session low
19924/20 6 Jan high/9 Jan high 19660 30 Dec low
19903 11 Jan high 19600 Minor
19875 Session high 19500 10 Jan low
SPI200.fs 5734
The ASX traded down to the decent support placed at 5700 which has held so far, allowing a bounce to 5730. The 4 hour momentum indicators look a little heavy, and with the dailies also looking a bit toppish, a break of 5700 could see an acceleration to the downside, where minor support is seen at 5680, although under there, there is not a lot to hold the SPI up until 5615.On the topside sellers will be seen at  the 11 Jan high (5757)/session high (5761) a break of which would then allow a return to the 5790 area although this is beginning to look less likely. If wrong and we do head above 5790 at any stage, 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. Although the weeklies still point higher, the near-term risk is beginning to point to the downside and selling into strength, with a SL above the session high, or possibly above 5790 is now preferred.
24 Hour:  Mildly bearish Medium Term: Neutral
Resistance Support
5814 29 May 2015 high 5718 200 HMA
5800 Minor 5707/03 Session low/10 Jan low / Rising trend support
5789 9 Jan high 5680 Neutral
5770 Minor 5615 30 Dec low
5761 Session high 5605 23.6% of 5029/5789
GOLD 1196
Gold finally took out 1200, heading to a high of 1207, before returning to safety, below the 100 WMA, to finish the day at 1195. The short-term momentum indicators have now rolled over so that may have been it for a while on the topside and trading from the short side, with a SL placed above the high is now preferred, looking for a move back towards 1180/85. With the dailies looking positive, looking to buy it at around 1170/75 may be a longer-term plan, with a SL placed tight under 1160. If we do head higher, above the session high would then target 1215/20.
24 Hour: Mildly bearish Medium Term: Prefer to buy dips.
Resistance Support
1235 Minor 1190 Minor
1219 38.2% of 1375/1122 1186 (23.6% of 1122/1207)
1215 23 Nov high 1175 (38.2% of 1122/1207)
1207 Session high 1165 (50% pivot of 1122/1207)
1201 100 WMA 1155 (61.8% of 1122/1207)
XAGUSD 16.78
Silver headed up to resistance at 17.00 on Thursday, and unable to overcome the sellers has returned to sit close to the 100 WMA at 16.70. The daily charts still look mildly positive so if we do break 17.00 we could then head to 17.30 although I would be surprised to see it up there in the near term given that the short-term momentum indicators are now looking a little heavy. 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 11 Jan.
24 Hour: Mildly bearish Medium Term:  Prefer to buy dips
Resistance Support
18.00 Minor 16.70 100 WMA
17.90 Minor 16.53 10 Jan low/11 Jan low
17.30 (50% of 18.98/15.63) 16.41 9 Jan low
17.21 7 Dec high 16.25 6 Jan low/200 HMA
16.98 Session high 15.83 30 Dec low
OIL (WTI) 53.03
Oil was up over 1% Thursday on reports Saudi Arabia has cut output by more than agreed, with reports suggesting that Saudi output is now below 10 million barrels a day. Technically the outlook remains the same. Look for a choppy range of 50.70/54.00 to cover it over the next few days, with a topside break of 54.00 likely 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. In the short term the 4 hour charts hint at a run towards 54.00, but with the dailies pointing a little lower it would appear to be a sell, with a tight SL placed above the 54.35 level.
24 Hour: Mildly bullish Medium Term: Cautiously long – Tight SL sub 50.00
Resistance Support
55.21 3 Jan high 52.40 100 HMA
54.29 6 Jan high 52.09 Session low
53.80 9 Jan high 51.00 Minor
53.47 Session high 50.70 Rising trend support/ Reverse Head/Shoulders Neckline
52.65 11 Jan high 50.00 Psychological

EURUSD: 1.0621
The dollar is under general pressure following Donald Trump’s lack of clarity on economic direction, allowing the Euro to head up into the resistance area, mentioned previously, by peaking at 1.0684. The short-term momentum indicators are mixed, but the daily charts still point higher so another test of the session high would not really surprise, above which could see a run towards 1.0700, above which there is little to stop the Euro heading to 1.0815, so I think stops on shorts should be left tight above 1.0700. 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 1.0600/1.0700 to cover it today, cautiously keeping note of a possible upside break although the 4 hour charts are hinting at some bearish divergence so selling towards 1.0700, if seen, may be a plan. The US Retail Sales will be the focus today and note that it will be the MLK holiday in the US on Monday, so position squaring is likely to dominate trade late in the session.
24 Hour: Neutral Medium Term: Mildly bullish – Prefer to sell rallies
Resistance Support
1.0815 (50% pivot of 1.1299/1.0340) 1.0600 Pivot
1.0702 (38.2% of 1.1299/1.0340) 1.0570 Session low
1.0684 Session high 1.0530 200 HMA
1.0675 55 DMA/ (61.8% of 1.0873/1.0340) 1.0500 Minor
1.0650 Minor 1.0478 (50% pivot of 1.0340/1. 0624)

Economic data highlights will include:

German Wage Price Index, Janet Yellen Speech, US Retail Sales, PPI, Business Inventories, Provisional Michigan Consumer Sentiment Index (Jan), Fed’s Harker Speech

Meta Trader
EURUSD: 4 Hour


USDJPY: 114.58
 US$Jpy took out the support above 114.00 falling to a low of 113.75 before a bounce, to close the US session at 114.30. The short-term momentum indicators are flat are mixed so while the coming session could be choppy near current levels, the dailies still point lower, so below the session low could see a quick move towards 113.00, below which the next major support is not seen until 112.00. On the topside, sellers will be seen at 114.90/115.00 today, which might be a near term sell area, with a SL placed above 115.50.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
116.00 Minor 114.00 Minor
115.80 100 HMA 113.75 Session low
115.50 Session high 113.11 8 Dec low
115.20 Minor 112.87 5 Dec low
114.91 23.6% of 118.66/113.75 112.00 38.2% of 101.18/118.66
Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2172
Sterling made it up to 1.2316 against the dollar today before heading into reverse as thoughts of a “hard” Brexit again became the focus and not helped by the political crisis in N. Ireland, which may delay any progress in the Brexit negotiations. We shall find out more on Tuesday when PM May will give a key speech on the government’s plans for negotiating Brexit. Technically, a cautious stance is again 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 the session high 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
1.2316 Session high 1.2155 Session low
1.2280 Minor 1.2100 Minor
1.2250 200 HMA 1.2050 (76.4% of 1.1821/1.2773)
1.2235 50% pivot of 1.2430/1. 2037 1.2037 11 Jan low
1.2200 Minor 1.2000 Psychological
Meta Trader
GBPUSD: 4 Hour


USDCHF: 1.0101
US$Chf has headed lower on Thursday, falling to a low of 1.0055 although it is finishing the day back above 1.0100. The short-term momentum indicators are mixed but while the dailies still point lower, selling into strength seems to be the plan, looking for a test of parity and possibly lower in the next day or two. Resistance is seen at in the 1.0150/1.0200 area. Stops should be left tight above there.
24 Hour: Neutral Medium Term: Mildly bearish
Resistance Support
1.0275 (76.4% of 1.0335/1.0089) 1.0055 Session low
1.0240/47 (61.8% of 1.0335/1.0089)/11 Jan high 1.0035 30 Dec low
1.0210 (50% pivot of 1.0335/1.0089) 1.0000 Psychological
1.0180 200 HMA 0.9975 Minor
1.0149 Session high 0.9935 23.6% of 0.9549/1.0343
Meta Trader
USDCHF: 4 Hour


AUDUSD: 0.7491
The Aud made it up to 7517 on Thursday, taking good advantage of the US$ weakness and the associated strength running through commodities, which generally had a good session. The hourly charts have become overbought and are turning lower although the 4 hour charts do still look underpinned so the downside looks somewhat limited today. Some choppy trade at close to 0.7500 therefore seems likely, with the 100 DMA/200 DMAs likely to act as a magnate. The dailies though, still point higher so we could yet see a move towards 0.7540 and even towards 0.7600 in the days ahead, and if so, looking to sell into that strength may be a plan. Minor support now lies around 0.7470 and at 0.7430. Watch out for the December China Trade Balance today (exp $46 bio; Exp-3.5%, imp +2.7%).
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
0.7567 15 Nov high 0.7470 Minor
0.7540/44 61.8% of 0.7777/0.7160/Daily cloud top 0.7450 Minor
0.7524 14 Dec high 0.7429 Session low
0.7517 Session high 0.7390 Minor
0.7500 100 DMA/200 DMA 0.7351 11 Jan low

Economic data highlights will include:

China Trade Balance

Meta Trader
AUDUSD: 4 Hour



NZDUSD: 0.7112
As with the Aud, the Kiwi had a strong session taking out several resistance levels to head to a high of 0.7143. The 1 hour charts have turned lower after having become overbought although the 4 hour charts still point higher, so some choppy trade at close to 0.7100 may be the short-term outcome. Looking further out, the dailies still point higher so we could yet see a test of 0.7200 although I still prefer to sell into that level, looking for a return towards 0.7000 at some stage.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
0.7275 76.4% of 0.6857/0.7143 0.7100 Minor
0.7238 14 Dec high 0.7075 23.6% of 0.6857/0.7143
0.7195 61.8% of 0.6857/0.7143 0.7045 Session low
0.7170 Minor 0.7030 38.2% of 0.6857/0.7143
0.7143 Session high 0.7000 Psychological

Economic data highlights will include:

Electronic Retail Sales

Meta Trader
NZDUSD: 4 Hour