9 Jan: Stocks near record highs, US$ firm following NFP.

By | January 9, 2017

While Friday’s Non-farm payrolls rose by a less than expected 156K in December, the previous month’s figure was revised up from 178k to 204k. The headline unemployment rate rose to 4.7% as expected, while wages showed strong growth, with the average hourly earnings increasing by 0.4% m/m, above expectation of 0.3%. The AHE was the figure that traders chose to concentrate on and they took the dollar and stock markets higher but without too much follow-through momentum, while commodities came under pressure due to the stronger dollar.

The coming week is rather thin in terms of data and Monday is likely to be spent mostly in disseminating Friday’s NFP figure. The Sentix and the EU employment figures are the main events today, which will also feature the Australian Job Ads and Building Permits. Other events through the week will include the UK NIESR GDP Estimate (Tue) and the Manufacturing/Industrial Production (Wed), the ECB Minutes (Thur) and the US Retail Sales and PPI (Fr). It is a Japan holiday today. Have a good week.

CURRENCIES
EURUSD: 1.0531
Res  1.0580  1.0620  1.0650
Sup  1.0510  1.0475  1.0445
USDJPY: 116.98
Res  117.25  117.75  118.20
Sup  116.70  116.30  116.00
GBPUSD: 1.2282
Res  1.2300  1.2355  1.2400
Sup  1.2240  1.2200  1.2180
USDCHF: 1.0178
Res  1.0185  1.0210  1.0240
Sup  1.0150  1.0125  1.0085
AUDUSD: 0.7300
Res  0.7315  0.7335  0.7355
Sup  0.7285  0.7270  0.7235
NZDUSD: 0.6960
Res  0.6985  0.7005  0.7045
Sup  0.6945  0.6930  0.6900
INDICES / COMMODITIES
S+P: 2272
Res  2278  2290  2300
Sup  2258  2250  2240
DJI: 19894
Res  19925  19965  20000
Sup  19825  19755  19655
ASX SPI: 5728
Res  5740  5754  5770
Sup  5704  5680  5650
GOLD: 1172
Res  1184  1194  1204
Sup  1170  1160  1150
SILVER: 16.47
Res  16.70  16.85  17.00
Sup  16.25  16.00  15.80
OIL (WTI): 53.66
Res  54.30  54.75  55.20
Sup  53.30  52.75  52.10

 

Indices/commodities
S&P Futures 2272
The S+P headed back to its all time high on Friday following the US jobs data but was unable to head on to new highs, finishing the week at 2273. The momentum indicators do seem to be aligning to pint slightly higher although a cautious tone is required until we find out more about how the Trump administration intends to tackle the economy. Buying dips, with a SL sub 2250, looking for a slow grind higher seems to be the plan.
24 Hour: Neutral Medium Term: Mildly prefer to buy dips – tight SL

 

Resistance Support
2310 Minor 2258 200 HMA Friday low
2300 Minor 2240 Minor
2290 Minor 2230 Minor
2280 Minor 2225 30 Dec low
2277 All-time high/14 Dec high/Friday high 2218 (23.6% of 2028/2277)
DJI Futures 19894
Ditto S+P. Mildly prefer to buy dips. SL sub 19650. 20000 will remain a significant hurdle.
24 Hour: Neutral Medium Term: Prefer to buy dips – tight SL

 

Resistance Support
22000 Minor 19758 Friday low
21000 Minor 19700 Minor
20000 Minor 19660 30 Dec low
19964 All-time high/14 Dec high/Friday high 19600 Minor.
19924 Friday high 19500 Minor
ASX SPI 5728
The ASX has got off to a strong start to 2017, reaching 5741 on Friday, with further gains looking possible. That being the case, there really is not too much resistance ahead of the 29 May 2015 high at 5814, and beyond that, at the 5 May 2015 high of 5889.There will be plenty of hurdles though before we get there though, if indeed we get even close. On the downside, minor support will be seen at 5700 and at 5680, with the rising trend support currently seen at 5645. Buying dips seems to be the plan.
24 Hour:  Prefer to buy dips Medium Term: Mildly bullish

 

Resistance Support
5850 Minor 5706 Friday low
5814 29 May 2015 high 5680 Minor
5800 Minor 5645 Rising trend support
5770 2 June 2015 high 5615 30 Dec low
5741 Friday high 5600 Minor
GOLD 1172
Having reached 1985 last Thursday, Gold has turned lower in the face of the stronger dollar at the end of the week, finishing at minor Fibo support at 1170. 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 1185, there is some fairly stiff resistance all the way to 1200. Look for 1160/80 to cover it for now.
24 Hour: Neutral Medium Term: Prefer to buy dips.

 

Resistance Support
1215 23 Nov high 1170 (23.6% of 1122/1185)/Friday 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)
1185 5 Jan high 1137 (76.4% of 1122/1185)
SILVER 16.47
Silver fell sharply from the week’s highs of 16.71 to 16.25 on Friday and further choppy trade within this range looks probably today. Further out, the daily charts 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 currently 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 16.24 Friday low
17.30 (50% of 18.98/15.63) 16.15 200 HMA
17.21 7 Dec high 16.00 Minor
16.90 (38.2% of 18.98/15.63) 15.83 30 Dec low
16.71/66 5 Jan high/Friday high 15.63 20 Dec low
OIL (WTI) 53.66
WTI remains choppy, with traders reluctant to buy it as output cuts by OPEC members continue to meet with lingering concern that some producers could try to avoid their share of the planned decreases aimed at curbing global oversupply. Technically the long term reverse Head/Shoulders, mentioned before, remains viable, although a break below the neckline at any time (50.80) would nullify this and could see a quick move lower. 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 52.15/55.15 to cover it.
24 Hour: Neutral Medium Term: Prefer to buy dips – Tight SL sub 50.00

 

Resistance Support
57.92 2 July 2015 high 53.30 Friday low
57.00 (38.2% of 107.4/26.03) 52.77 5 Jan low
56.00 Minor 52.15 (23.6% of 42.18/55.21)
55.21 3 Jan high 51.50 Minor
54.29 Friday high 50.80 Rising trend support/ Reverse Head/Shoulders Neckline

EURUSD: 1.0531
The Euro initially spiked up to 1.0624 after Friday’s soft headline NFP number – a 2017 high but then turned lower as the dollar took on a bid tone, with traders watching the stronger wages figures. While the short term momentum indicators look heavy, the daily charts still point higher so some caution is warranted. In the longer term though I still prefer to sell into strength given that the US data remains underpinned 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. The coming session could be choppy given the comparative lack of data and 1.0480/1.0580 may cover it. Watch out for the Sentix, which may create a few waves – and also for any political news from the incoming Trump administration.
24 Hour: Mildly bearish Medium Term: Prefer to sell rallies

 

Resistance Support
1.0702 (38.2% of 1.1299/1.0340) 1.0524 Friday low
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 Friday high 1.0443 (61.8% of 1.0340/1. 0624)
1.0580 Minor 1.0405 (76.4% of 1.0340/1. 0624)

Economic data highlights will include:

M: German Trade Balance, Industrial Production, EU Sentix Investor Confidence Survey, Unemployment, US Consumer Credit

T: US NFIB Business Optimism Index, Wholesale Inventories

W: ECB Non-Monetary Policy Meeting, EIA Crude Oil Stocks Weekly Change

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

F: US Retail Sales, PPI, Business Inventories, Provisional Michigan Consumer Sentiment Index (Jan).

Meta Trader
EURUSD: 4 Hour

 


USDJPY: 116.98
US$Jpy has rebounded strongly from the Friday low of 115.06 following Friday’s NFP data and sits just below the Fibo resistance seen at 117.25. As elsewhere, the momentum indicators do look rather mixed and while the short term momentum indicators now point higher, the dailies are warning us not to become too carried away on the topside. A choppy trade may lie ahead and it is a Japan holiday so liquidity will be a little thin. I would not be surprised to see a rangebound session using something like 116.50/117.50 to cover it.
24 Hour: Mildly bullish Medium Term: Neutral

 

Resistance Support
118.60 3 Jan high/Descending trend resistance 116.70 Minor
118.15 4 Jan high 116.30 Minor
117.77 (76.4% of 118.60/115.06) 116.00 Minor
117.25 (61.8% of 118.60/115.06) 115.70 Minor
117.17 Friday high 115.06 Friday low

Economic data highlights will include:

M: Holiday

T: Consumer Confidence Index

W: Provisional Coincident Index, Coincident Index

T: Current Account, Eco Watchers Survey, Machine Tool Orders

F:

Meta Trader
USDJPY: 4 Hour


GBPUSD: 1.2282
Cable moved lower after the upbeat US wages data on Friday, finishing the week near the session low of 1.2260. Although in the middle of its recent range, the short term momentum indicators do look heavy and given the ongoing Brexit concerns it would appear that Sterling is going to underperform. A test of 1.2200/1.2185 would not really surprise in coming sessions, below which could then begin to accelerate lower, although I am not sure we are going to see such a move today. Selling into strength seems to the plan, with 1.2350 looking to be a bit toppish, but with a SL placed above Friday’s high of 1.2430.
24 Hour: Mildly bearish Medium Term: Prefer to sell rallies

 

Resistance Support
1.2460 (50% pivot of 1.2723/1.2199) 1.2240 Minor
1.2430 Friday high 1.2199 3 Jan low
1.2400 Minor 1.2185 (61.8% of 1.1821/1.2773)
1.2350 Minor 1.2140 Minor
1.2300 200 HMA 1.2113 28 Oct low

Economic data highlights will include:

M:

T:  NIESR GDP Estimate

W: Manufacturing/Industrial Production, Trade Balance

T:

F:

Meta Trader
GBPUSD: 4 Hour


USDCHF: 1.0178
US$Chf recovered from an early session low of 1.0089 on Friday to close near its highs of 1.0182. Further short term gains seem possible but as elsewhere, the dailies do not hint at too much follow-through and it looks likely to be a rangebound session. 1.0120/1.0220 may well cover it.
24 Hour: Mildly bullish Medium Term: Neutral

 

Resistance Support
1.0300 Minor 1.0150 Minor
1.0275 (76.4% of 1.0335/1.0089) 1.0125 Minor
1.0240 (61.8% of 1.0335/1.0089) 1.0089 Friday low
1.0210 (50% pivot of 1.0335/1.0089) 1.0035 30 Dec low
1.0180/82 (38.2% of 1.0335/1.0089)/Friday high 1.0000 Psychological

Economic data highlights will include:

M: Retail Sales

T: Unemployment

W:

T:

F:

Meta Trader
USDCHF: 4 Hour



AUDUSD: 0.7300
The Aud was unable to maintain Friday’s early gains to 0.7354 and under pressure from the firmer US$, it finished the week at 0.7305, having recovered from a low of 0.7288. As elsewhere the momentum indicators are mixed, with the short term momentum indicators pointing lower, but the dailies remaining supportive. A choppy session, using 0.7300 as a pivot, would not surprise and looking further out, a wider range of something like 0.7150/0.7450 (100 DMA) would seem to cover it for a while to come. Watch out today for the ANZ Job Ads and the Building Permits which may create some waves.
24 Hour: Mildly bearish Medium Term: Neutral

 

Resistance Support
0.7400 Minor 0.7288 Friday low
0.7385 (61.8% of 0.7524/0.7160) 0.7270 100 HMA
0.7355 Friday high 0.7235 200 HMA
0.7335 Minor 0.7200 Minor
0.7315 Minor 0.7160 23 Dec low

Economic data highlights will include:

M: ANZ Job Ads, Commodity Price Index, Building Permits

T: Retail Sales (Nov)

W:

T:

F:

Meta Trader
AUDUSD: 4 Hour



NZDUSD: 0.6960
As with the Aud, the momentum indicators in the Kiwi are mixed, with the short term momentum indicators pointing lower, but with the dailies remaining supportive. A choppy session, using the current level (0.6965) as a pivot would not surprise, and looking further out, a wider range of something like 0.6850/0.7150 would seem to cover it for a while to come, although the 200 DMA at 0.7075 should provide stiff resistance, if we see it. 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 bearish Medium Term: Neutral

 

Resistance Support
0.7093 (61.8% of 0.7238/0.6857) 0.6953 Friday low
0.7075 200 DMA 0.6945 200 HMA
0.7042/48 Friday high/(50% pivot of 0.7238/0.6857) 0.6930 Minor
0.7005 Minor 0.6900 Minor
0.6985 Minor 0.6885 3 Jan low

Economic data highlights will include:

M: ANZ Commodity Price Index

T:

W:

T:

F:

Meta Trader
NZDUSD: 4 Hour