Market Insights
Traders get ready for a big news week
We’re not getting any clear trends from world markets so far today with some traders apparently waiting for the big fireworks to start. In stocks, European indices are up on better than expected Spain retail sales and Sweden GDP, while Asia Pacific markets were lower. US markets are flat as traders straggle back from this weekend’s big turkey, family, football and shopping wingding.
USD is up moderately with the US Dollar Index trading just above the big 100.00 level. JPY is drifting back after Japanese economic figures came in mostly worse than expected, leaving traders to wonder if the Bank of Japan will have to boost stimulus despite comments to the contrary from central bankers.
In commodities this morning, copper is climbing after Chinese copper producers announced production cuts for 2016 following on from cuts indicated by nickel producers on Friday. Crude oil is up a bit today within its established trading range.
Today, US traders may remain focused on the retail sector, with black Friday weekend sales results a potentially big driver for trading. Chicago PMI may also attract some attention from the market. The rest of the week is looking incredibly active for news and trading. Highlights include:
- Tuesday Manufacturing PMI from around the world
- Wednesday ADP payroll and Bank of Canada
- Thursday ECB stimulus decision
- Friday US nonfarm payrolls, Canada employment, OPEC production decision
Chart Signals
North American and European Indices
Dow Jones Industrial Average has bounced up from near 17,740 toward 17,840 to start the week but essentially continues to consolidate recent gains in the 17,720 to 17,920 zone with flat RSI indicating a normal pause within an ongoing uptrend.
US Nasdaq 100 is getting a lift up off 4,665 support toward 4,695 but continues to struggle with resistance in the 4,700 to 4,735 zone. RSI indicates a sideways phase underway within an ongoing upward trend.
US S&P 500 is holding steady above 2,085 support and below resistance in the 2,100 to 2,115 area.
DAX continues to steadily advance, today rallying to test 11,435 Fibonacci resistance with next potential tests near 11,500 then 11,630 a prior high. RSI nearing overbought again so consolidation in the 11,215 to 11,435 range appears possible too.
FTSE 100 is backing and filling today, trading between 6,330 and 6,380 having encountered some resistance near 6,400 with more possible near 6,460. RSI holding 50 indicates upward momentum still building.
Commodities
Gold has paused above $1,050 while it digests Friday’s selloff and an oversold RSI. It remains in a downtrend, having broken down below $1,070 and completed a symmetrical triangle last week. A retest of the $1,000 big round number remains possible.
Crude Oil WTI is trading in the $40.90 to $41.40 area within a $40.00 to $42.00 sideways trading channel. RSI under 50 but rising indicates downwards pressure easing.
FX
US Dollar Index is breaking out today, clearing the 100.00 round number, but a negative RSI divergence has me wondering if this is a throwover or bull trap. Next measured resistance possible near 101.25 with support rising toward 99.75.
EURUSD keeps trending lower, breaking $1.0600 with next potential support in the $1.0475 to $1.0500 range between a previous low and a round number.
EURGBP appears to be forming saucer bottoms in both the pair and the RSI a sign the tide may be turning. 0.7000 has emerged as round number support with initial resistance near 0.7075 then 0.7200 where a prior high and moving averages converge.
GBPUSD is testing the $1.5000 round number which could end in a double bottom or a breakdown with next potential support near $1.4865. RSI under 50 and falling indicates downward momentum accelerating.
USDCAD remains in an uptrend of higher lows while RSI indicates upward momentum steady. Currently trading near $1.3380 between $1.3340 support near $1.3430 resistance.
CADUSD keeps drifting lower with $0.7500 now emerging as resistance with the pair trading near $0.7475 and next support near $0.7425.
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