19 Jan: US$ higher after upbeat Yellen comments. ECB ahead today.

By | January 19, 2017

 

The dollar managed to halt its decline and regained a little ground today, especially late in the session when it accelerated higher following some upbeat comments from Janet Yellen, who said that with the US at near to full employment and inflation approaching the required targets, we can expect further rate hikes in coming months but the timing depends on the economy. She added that she expects more than one hike this year. Earlier in the US session the dollar was underpinned by the inflation data which saw the CPI rise by 0.3% mm, 2.1% yy in December, up from November’s 1.7% yy. The Core CPI rose 0.2% mm, 2.2% yy, up from prior month’s 2.1% yy, with the figures all in line with expectations. Elsewhere, the EU CPI was finalized at 1.1% yy in December with core CPI at 0.9% yy, while the German CPI was finalized at 1.7% yy. The UK, jobless claims dropped -10.1k in December, better than expectation of 5.0k rise while the unemployment rate was unchanged at 4.8%.  Although the dollar weakness seems to be losing some momentum, conditions are likely to remain volatile heading into Donald Trump’s inauguration data this Friday, which will most likely flow through to next week.

Today’s focus will be on the ECB interest rate decision and Mario Draghi’s press conference.  Rates are expected to remain unchanged and traders will focus on the tone of what Draghi has to say. Elsewhere, the NZ Business PMI and Building Permits are due, as are the Australian Unemployment figures for December. Fromm the US we get a fair bit of secondary data, which if above expectations could produce a bit of a bounce in the dollar. Coming up will be the Building Permits, Housing Starts, Philadelphia Fed Mfg Survey, EIA weekly crude oil stock change and the weekly Jobless Claims.

CURRENCIES
EURUSD: 1.0642
Res  1.0655  1.0685  1.0720
Sup  1.0610  1.0595  1.0570
USDJPY: 114.50
Res  114.60  114.95  115.35
Sup  114.20  113.85  113.60
GBPUSD: 1.2267
Res  1.2300  1.2345  1.2400
Sup  1.2250  1.2200  1.2150
USDCHF: 1.0062
Res  1.0075  1.0100  1.0115
Sup  1.0045  0.9995  0.9965
AUDUSD: 0.7515
Res  0.7540  0.7570  0.7600
Sup  0.7490  0.7450  0.7410
NZDUSD: 0.7141
Res  0.7165  0.7190  0.7220
Sup  0.7130  0.7095  0.7070
INDICES / COMMODITIES
S+P: 2264
Res  2268  2276  2290
Sup  2258  2248  2240
DJ30.fs: 19721
Res  19780  19815  19900
Sup  19600  19670  19509
SPI200.fs: 5627
Res  5645  5660  5680
Sup  5610  5580  5560
GOLD: 1205
Res  1220  1230  1240
Sup  1200  1190  1180
XAGUSD: 17.07
Res  17.20  17.30  17.45
Sup  17.00  16.80  16.60
OIL (WTI): 52.13
Res  52.80  53.55  54.25
Sup  51.75  51.15  50.65

 

Indices/commodities
S&P Futures 2264
Technically, the dailies still look a little heavy, while the weeklies remain positive so a cautious stance is best as we head towards Donald Trump’s inauguration on Jan 20. 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 – especially if he ramps up the prospect of a trade war with China, which he seems intent on doing.
24 Hour: Mildly bearish Medium Term: Neutral – Possibly buy dips but with tight SL
Resistance Support
2290 Minor 2258 Session low/ 17 Jan low
2280 Minor 2248 12 Jan low
2277 All-time high/14 Dec high/6 Jan high 2240 Minor
2273 13 Jan high 2230 Minor
2268 Session high 2225 30 Dec low
DJ30.fs 19721
Ditto S+P.
24 Hour: Mildly bearish Medium Term: Neutral – Possibly buy dips but with tight SL
Resistance Support
20000 Minor 19668 Session low
19964 All-time high/14 Dec high 19600 Minor
19924/20 6 Jan high/9 Jan high 19500 10 Jan low
19903 11 Jan high 19450 Minor
19875 12 Jan high /13 Jan high 19360 23.6% of 17417/19964
SPI200.fs 5627
The ASX headed down to a low of 5609 where the Fibo support propped it up on Wednesday, and for the time being that may have been the low given that the short-term momentum indicators are now looking to recover some of their recent lost ground.  The dailies point lower though, so selling into rallies with a SL placed above 5660 seems to be the plan. while. A break of 5600 would suggest a run to 5680 and then 5660. Trading from the short side still seems to be the theme.
24 Hour:  Prefer to sell rallies Medium Term: Mildly bearish
Resistance Support
5719 16 Jan high/200 HMA 5609/05 Session low /23.6% of 5029/5789
5795/98 38.2% of 5789/5635 5576 23 Dec low
5670 23.6% of 5789/5635 5558 12 Dec low
5660 Minor 5543 10 Dec low
5641 Session high 5498 38.2% of 5029/5789
GOLD 1205
Gold has had a rangebound session (1209/18), leaving the outlook unchanged.  1220 still provides strong resistance and may prove tricky to overcome although the daily charts still look constructive so for the time being looking to buy at around 1200 where the 100 WMA could provide support while acting as a medium-term pivot. If we do break above 1220, look for a run to 1235/40. On the downside, below 1200 will find bids at 1180/90.  Right now, looking to structurally trade from the long side seems to be the plan although the short-term indicators do suggest we could see a test of 1200 first.
24 Hour: Prefer to buy dips Medium Term: Mildly bullish
Resistance Support
1248 50% pivot of 1375/1122 1210 Session low
1238/41 100 DMA /11 Nov high 1202 17 Jan low
1233 16 Nov high 1195 (23.6% of 1122/1218)
1230 50% pivot of 1337/1222 1188 13 Jan Low
1218/19 Session high/38.2% of 1375/1122 1182 (38.2% of 1122/1218)
XAGUSD 17.07
Silver is pretty much unchanged today having tested the resistance at 17.30 earlier in the session. The daily momentum indicators still point higher and while there is good resistance in the 17.30/40 area that has yet to be overcome a break of this area could see run towards 17.60/80. On the downside, support will again arrive at 17.00 and again at 16.80. From the look of the charts, buying dips seems to be the plan although the short-term momentum indicators are fairly neutral and suggest the chance of another range bound session ahead.
24 Hour: Prefer to buy dips Medium Term:  Mildly bullish
Resistance Support
18.00 Minor 17.06 Session low
17.85 200 DMA 16.80 17 Jan low
17.60 100 DMA 16.70 100 WMA
17.40 Weekly cloud base 16.53 10 Jan low/11 Jan low
17.32/30 Session high/ (50% of 18.98/15.63) 16.41 9 Jan low
OIL (WTI) 52.13
 Oil prices headed lower on Wednesday, reversing early gains after the IEA Executive Director said that higher oil prices will trigger a “significant” increase in U.S. shale output, at the same time as OPEC and other producers rein in supply. Having reached a high of 53.58, WTI is now trading at session lows at 51.85. The range trade within the wider 50.70/54.00 looks set to continue over the next few days, and now back below the 52.00 we could be in for a re-test of the H/S neckline at 50.70, which should be strong, but back under 50.00 could then open the way to 49.00 and possibly towards the 200 DMA at 47.00. On the topside, sellers will be seen at around 52.70 and again at the session high. Although unlikely today, a topside break of 54.00 would then likely look to target the 55.21 January high. As before, keep SL on long positions either on a break below 50.70 or at around 49.20. As for today, 50.70/52.70 may cover it. Prefer to buy dips although the dailies do remain somewhat heavy so caution is warranted.
24 Hour: Prefer to buy dips Medium Term: Cautiously long – Tight SL sub 50.70
Resistance Support
55.21 3 Jan high 51.94 Session low.
54.29 6 Jan high 51.50 Minor
53.80 9 Jan high 51.00 Minor
53.58 Session high 50.70 Reverse Head/Shoulders Neckline
52.65 100 HMA/200 HMA 50.00 Psychological

EURUSD: 1.0642
The dollar recovered some of its recent lost ground on Wednesday in what was a fairly steady session, until Janet Yellen spoke with some upbeat comments, causing an acceleration higher for the dollar, with the Euro heading to a session low of 1.0630. Looking ahead, we have the ECB Meeting today. No change is expected to policy although traders will be focused on what Mario Draghi has to say in his Press Conference and his outlook for the EU economy. While the dailies point higher the short-term momentum indicators are looking a little more circumspect today so a cautious tone is required. Support will arrive at 1.0600/30 and this may well hold today, but below which could see a return to 1.0570, where the minor rising trend line should provide decent support. With the dailies looking constructive though, buying dips may still be the plan for now, and if we head back above 1.0700/20 the Euro could then head towards the next minor Fibo resistance at 1.0750, above which there is little to stop it until we reach 1.0815. While buying dips seems to be the plan in the near term, further out I still prefer to look for levels to sell the Euro and buy the US$, as we head towards the next Fed rate hike. If Draghi is dovish today, then the Euro will quickly push to the downside and if 1.0570 is taken out, expect a run back towards 1.0500.
24 Hour: Neutral Medium Term: Mildly bullish – but look to sell into strength.
Resistance Support
1.0815 38.2% of 1.1616/1.0340 1.0630 Session low
1.0750 (76.4% of 1.0874/1.0340) 1.0610 200 HMA
1.0715/19 Session high/17 Jan high 1.0595 17 Jan low
1.0702 (38.2% of 1.1299/1.0340) 1.0570/65 12 Jan low/Rising trend support
1.0680 Minor 1.0525 Minor

Economic data highlights will include:

World Economic Forum – Davos, EU Current Account, ECB Interest Rate Decision, US Building Permits, Housing Starts, Jobless Claims, Philadelphia Fed Mfg Survey

Meta Trader
EURUSD: 4 Hour


USDJPY: 114.50
US$Jpy had a good session and accelerated higher late in the day following the comments from Janet Yellen, finishing the day at the high of 114.60. With the short-term momentum indicators pointing higher, we could now see a run to 115.00 and possibly even towards 115.35. The downside looks to see bids now at 113.85/15. Market will look to digest the late US move so a cautious stance is required in the coming session.
24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
Resistance Support
115.60 50% pivot of 118.66/112.54 114.15 Minor
115.35 Descending trend resistance 113.85 100 HMA
115.00 Psychological 113.55 Minor
114.85 38.2% of 118.66/112.54/200 HMA 113.20 Minor
114.60 Session high 113.00 Minor
Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2267
Despite the solid UK jobs figures, Cable has given up some of the gains of the previous session in falling from a high of 1.2415 to a low of 1.2265, closing nearby. Cable will remain difficult to trade due to the constant Brexit headlines but from a technical point of view, the dailies remain fairly flat, suggesting further choppy trade within a wide range of something like 1.2000/1.2400. The shorter-term charts now suggest that we could head a little lower, where minor Fibo support lies in the 1.2150/1.2250 area. On the topside, sellers will be seen above 1.2300, at 1.2345/50 and again above 1.2400 although this seems unlikely to be seen again today.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.2510 16 Dec high 1.2265 Session low
1.2475 61.8% of 1.2774/1.1981 1.2248 38.2% of 1.1986/1. 2415
1.2432 5 Jan high 1.2200 50% pivot of 1.1986/1. 2415
1.2415 17 Jan high/Daily cloud base 1.2150 61.8% of 1.1986/1. 2415
1.2345 Minor 1.2085 76.4% of 1.1986/1. 2415
Meta Trader
GBPUSD: 4 Hour


USDCHF: 1.0062
US$Chf had a rangebound session (1.0007/48), leaving the outlook unchanged.  Further choppy trade looks likely although the short-term charts suggest that we could see a test of the resistance at around 1.0075. The dailies though remain heavy and on the downside, back below parity would seem to open the way to the 100 DMA at around 0.9965, and below there we could see a run towards 0.9935 and 0.9900.  The preference remains towards selling into rallies, with a SL placed above 1.0100.
24 Hour: Neutral Medium Term: Mildly bearish
Resistance Support
1.0165 50% pivot of 1.0335/0.9995 1.0007 Session low
1.0125 38.2% of 1.0335/0.9995 0.9995 17 Jan low
1.0095 100 HMA 0.9965 100 DMA
1.0075 23.6% of 1.0335/0.9995 0.9935 23.6% of 0.9549/1.0343
1.0052 Session high 0.9860 200 DMA
Meta Trader
USDCHF: 4 Hour


AUDUSD: 0.7515
 The Aud has been unable to make further ground on Wednesday and has seen a late selloff as the US$ gained some ground immediately after Janet Yellen’s comments, finishing the day’s lows at around 0.7510. The bearish divergence that we mentioned yesterday seems to be in control and the shorter-term charts do point to a more sustained test of 0.7500, below which could see a run back to the Fibo support at 0.7470. Today’s jobs data will decide if that come about; expectations are for a 10K rise in jobs created, with the headline rate to remain on hold at 5.7%. On the topside, sellers will be seen at 0.0.7545/50, above which there is not a great deal to stop it heading towards 0.7635. While the US$ remains under pressure the Aud could continue its way to higher ground, helped along by improving commodity prices. The RBA will not like it up here though, so expect an increase in the rhetoric as they try and talk it lower.
24 Hour: Prefer to buy dips Medium Term: Mildly bullish – but looking to sell into strength
Resistance Support
0.7635 76.4% of 0.7777/0.7160 0.7492 Session low
0.7600 Minor 0.7470  23.6% of 0.7160/0.7568
0.7581 14 Nov high 0.7450 200 HMA
0.7565/67 Session high/15 Nov high 0.7430 Minor
0.7545 Daily cloud top 0.7410 38.2% of 0.7160/0.7568

Economic data highlights will include:

Unemployment, Consumer Inflation Expectation

Meta Trader
AUDUSD: 4 Hour


NZDUSD: 0.7141
The Kiwi is finishing at the day’s lows at around 0.7135 after a late US$ rally. While the dailies remain constructive, the short-term momentum indicators are now pointing lower so a test of levels towards 0.7100 may be on the cards at some stage today. The dailies still look constructive though so a move back towards the 0.7200/15 area is possible but as before, I still prefer to sell into strength from a structural point of view.
24 Hour: Prefer to buy dips Medium Term: Mildly bullish
Resistance Support
0.7305 10 Nov high 0.7145/48 Session low/100 DMA
0.7275 76.4% of 0.6857/0.7143 0.7132 23.6% of 0.6857/0.7219
0.7238 14 Dec high 0.7095 200 DMA
0.7215 Session high 0.7080 38.2% of 0.6857/0.7219/200 HMA
0.7185 Minor 0.7050 Minor

Economic data highlights will include:

Building Permits, Business PMI

Meta Trader
NZDUSD: 4 Hour