Oil collapses after OPEC result. US$ generally firm

In the absence of a US market today, currencies and equities took a back seat to Oil, with WTI collapsing by 6% after the OPEC decision not to cut output. The dollar is generally a little stronger but it has really been a day of consolidation. The US market will again be very thin today and the focus will be on the EU CPI and Unemployment data. Ahead of that there is plenty of Japanese data, headed by the CPI which could cause some Yen volatility. NZD gets Building Permits,  Business Confidence, while Australia gets Private Sector Credit data. Have a good w/e.

EUR/USD: 1.2469

The Euro is a little lower today, in thin conditions due to the US holiday, having been unable to  take out the trendline resistance at 1.2525, and pressured once again by comments from Mario Draghi who said that lack of structural form threatens the cohesion of the EU and that further measures to encourage labour mobility are required.The case for ECB action had earlier been underlined after Spain and Germany both reported weaker-than-expected inflation data.

Not too much damage has been done though and it was a fairly scrappy affair, with the Euro beginning the upcoming Asian session at 1.2460, but looking a little soft again. Today sees the release of the November provisional CPI, and a weaker than expected 0.3%yy reading, following on from the Spanish/German readings, will see the Euro head back towards 1.2400 and possibly lower. The EU unemployment data is also due today, expected to be unchanged at 11.5%.

Technically, while the dailies still point higher as they unwind their oversold condition, I suspect that the downside in the near term is a bit limited although the shorter term indicators are very mildly negative, so another choppy session – with a mild downside bias – would not really surprise.

The 100 HMA is at 1.2450, below which would head towards 1.2400 although I am not sure that the dollar currently has enough momentum behind it to make gains much beyond there today, although eventually I think we are heading back to the 7 Nov trend low at 1.2353 and below.

Once 1.2353 is taken out, there really is not too much to hold the Euro up until around 1.2225 (200 Month MA), which should be strong support at the first attempt. Below that is the rising trend support at the 1.2130, which is also the 50% pivot of the rally from the Euro Oct 2000 low to the July 2008 high and should also provide decent support. Under that we have the July 2012 low at 1.2041 and the June 2010 low 1.1876, which both come ahead of 1.1743, where the Euro was initially pegged to the dollar in January 1999.

If we do see a return to the topside, 1.2500 will see sellers ahead of the trend resistance, now at 1.2525. I doubt we are going to see it up here today, but if wrong look for a run towards 1.2550, and then on to the 19 Nov high at 1.2600. Beyond there could see a larger squeeze towards the next downtrend resistance at 1.2685 (purple line).

Look for another choppy session with a mild downside bias, but to be determined by the EU data.

Economic data highlights will include:

German Retail Sales, EU CPI, Unemployment.

Meta Trader – AxiTrader   EUR/USD: 4 Hour

USD/JPY: 117.80

There is nothing new to add today, with the dollar having recovered to sit unchanged from this time yesterday, having recovered from a dip to 117.23.

The 100/200 HMAs are at 117.60/117.85 and these could contain the dollar for a while but there is a lot of data out of Tokyo today, headed by the CPI, so it could get rather lively later on. A weak CPI would once again put the pressure on the Yen, although technically the upside potential still looks rather limited at present.

The dailies are still unwinding their oversold condition and the topside points to watch would be at 118.00 and then at 118.50. I don’t really see too much upside above here for now, unless the CPI is extremely weak although if wrong, look for a run back to the recent high at 118.98, where option related sellers would again protect 119.00. Beyond there would trigger stops and would head on towards 120.00, which again will see heavy option related sellers. In the longer term the target of 124.13 (June 2007 high) remains valid, but will take time.

Below 117.60 could see a run back to the 117.23 session low, below which, 117.15 (Daily Tenkan) will see good buying interest. Below there would head quickly back to 117.00 a break of which could see deeper declines to 116.50, and we could even head back to 115.75 (23.6% of 105.19/118.98) without doing too much damage to the longer term uptrend.

Look for another choppy day.

Economic data highlights will include:

Japan CPI, Unemployment, Industrial Production, Retail Trade, Housing Starts, Construction Orders.

Meta Trader – AxiTrader   USD/JPY: 4 Hour

GBP/USD: 1.5734

Cable is a bit lower today, after having earlier squeezed up to 1.5826, in line with the Euro being pressured by the slightly stronger dollar, but has recovered from the 1.5715 low to sit at 1.5730, which has recently acted as a pivot point.

Today’s focus will be on the Nov EU CPI, with a soft number likely to put some pressure on the cross as Sterling benefits from the contrasting Central Bank policies, as the pressure builds on the ECB to act.

If Cable does fail here, then it will return to the session low (1.5715: 100 HMA) and then 1.5700, below which would test the 200 HMA at 1.5685.  A break of this would see minor support at 1.5625 and then the trend low at 1.5589.

If Cable recovers it could head back towards 1.5760 (minor) and then move back towards 1.5800. It looks unlikely to head above here today, but further technical points are seen at the Fibo resistance at 1.5813 (38.2% 1.6182/1.5589), above which would see the chance of a run towards 1.5870 (minor) and 1.5885 (daily Kijun) and possibly even to 1.5900 although somewhat unlikely today I suspect.

With the indicators being somewhat mixed, look for a choppy session, with a mild downside bias.

Meta Trader – AxiTrader   GBP/USD: 4 Hour

USD/CHF: 0.9638

The dollar has recovered mildly today, having held on to the previous sessions 0.9595 low.

Currently sitting between the 200 HMA (0.9628) and the 100 HMA (0.9655), this could provide a guide to the range for much of the day given that the shorter term indicators lack any real direction.

A topside break would see the dollar head back towards 0.9700 and then to 0.9725. I don’t see it getting close today, but further levels to watch would be at the 7 Nov 0.9741 peak, above which would head towards 0.9789 (29 May 2013 high) and 0.9838 (22 May 2013 high).

On the downside, below 0.9595, it would head back to rising trend support at 0.9575, a break of which would see an acceleration in the decline towards 0.9498 (23.6% of 0.8702/0.9741.

0.9600/50 could well cover it today.

Meta Trader – AxiTrader   USD/CHF: 4 Hour

AUD/USD: 0.8547

The Aud did pretty much as we had hoped yesterday in heading higher to reach a peak of 0.8615, allowing us to get short into the strength before it gave up much of the ground, and is now back at 0.8550.

The charts are a bit mixed and it could be a sideways session but the hourlies are pointing lower and it would seem that the bias is possibly a bit lower.

The downside will once again see bids today at 0.8530 and then at 0.8515 ahead of 0.8500. I would be quite surprised to see a return to 0.8480 today but if incorrect look for decent bids to hold the Aud at the base of the major channel at the 0.8450 area. A break of this would see a bigger decline towards the May 2010 lows at 0.8066.

On the topside, we could see a bit of a squeeze back towards 0.8585 (100 HMA) and possibly to 0.8600, although if we do it will provide another sell opportunity, I think. that I doubt we are headed much above here today, but further points to watch would be at the session high (0.8615 and then the 200 HMA at 0.8622). Above there would head back into the choppy consolidation area, where resistance at 0.8640 (50% of 0.8795/0.8480) and at 0.8670 (61.8%) would be targets, ahead of a possible run back to 0.8700.

Look for 0.8610/0.8685 to cover it.

Economic data highlights will include:

Private Sector Credit.

Meta Trader – AxiTrader   AUD/USD: 4 Hour

NZD/USD: 0.7872

The Kiwi headed higher but ran out of steam at 0.7926 today before heading lower again to sit at 0.7870, above the session low of 0.7856, with the Building Permits and ANZ Business Confidence coming up shortly to provide the next direction .

Currently sitting between the 100HMA (0.7855) and the 200 HMA (0.7875) this may act as a magnate today given the mixed outlook of the shorter term charts.

A move to the topside would see sellers at 0.7890 (minor) and then again at 0.7900/10, a break of which would head back towards today’s high at 0.7926 and on to last Friday’s China rate-cut inspired spike up to 0.7945. Above there would see another run towards last week’s double top at 0.7975.

Below 0.7850 would see bids at minor Fibo levels at 0.7825 and at 0.7800. Below here would see a return to the recent low at 0.7765 but probably not today.

Wait for the data to determine the direction. Still prefer to sell rallies for an eventual resumption of the downs trend.

Economic data highlights will include:

Building Permits, ANZ Business Confidence.

Meta Trader – AxiTrader   NZD/USD: 4 Hour