Market Insights
European indices recover heading into US pre-holiday data deluge
This morning finds European indices climbing again with political fears over fighting in Syria subsiding for now (although they could flare up again any time) combined with a positive reaction to weaker continental currencies particularly EUR, SEK and PLN. USD has been on the rebound this morning knocking Gold back. Overnight SGD was particulary strong on the back of a positive Singapore GDP report.
US indices are trading up slightly in what is essentially a half day for US markets with many traders heading home for the Thanksgiving holiday after noon EST. Between now and then, however, it could be really busy with three days of economic reports being crammed into one morning. Before the exchanges open the main reports are US durable goods, plus Core PCE inflation which is a measure the Fed likes to use. These reports along with jobless claims could influence Fed speculation trading but only if there was a major surprise.
Later in the morning, the focus turns to energy with the release of the weekly inventory reports. After rallying for two days, WTI has been dropping back overnight after another big build in API inventories reminded the street that the US is still awash in crude (with more apparently on the way at sea) and that Middle East supply disruptions probably wouldn’t have a big impact in the short term. Also, the glut reminds traders that the Saudis have been all talk and no action on cooperation and that concrete moves will be needed to truly stabilize the market. For now, $40.00 still appears to be the threshold of pain being defended by suppliers.
Chart Signals
North American and European Indices
Dow Jones 30 remains in an uptrend rallying up off of higher support near 17,780 toward the 17,830 to 17,860 zone with next potential resistance near 17,900 and 17,990.
US Nasdaq 100 continues to struggle with 4,685 resistance but has been attracting support above 4,660 with more possible near 4,625.
US S&P 500 is creeping higher once again with support moving up from 2,080 toward 2,086. Next resistance appears near 2,095 then 2,105 and 2,115.
DAX has rallied back up above 11,000 from 10,920 higher support toward 11,100 before levelling off. Rising RSI confirms upward momentum still increasing. Next potential resistance near 11,175 then 11,215.
FTSE 100 remains stuck in consolidation mode trading sideways around 6,300 in a 6,290 to 6,340 range.
Commodities
Gold has started to fall again within its $1,065 to $1,086 trading channel dropping from a lower high near $1,080 toward $1,072.
Crude Oil WTI was unable to overcome ongoing resistance near $42.00 and has dropped back into the $40.90 to $41.30 range. Next downside support appears possible near $40.00 then $39.20.
FX
US Dollar Index is bumping up against the 100.00 round number again but a growing negative RSI divergence suggests upward momentum slowing so it may continue to struggle to get through. Next measured resistance possible near 101.50 if successful. Support rises toward 99.40.
EURUSD has resumed its downward course dropping toward $1.0590 after once again failing to break through $1.0700. Resistance falls toward $1.0610 with next potential downside support on trend near the $1.0500 round number.
EURGBP saw another rebound attempt fail at a lower high, this time near 0.7090 and has since dropped back toward 0.7020 with next support near 0.7000 then 0.6900.
GBPUSD remains in a downswing with the RSI confirming the pair which has dropped into the $1.5060 to $1.5090 area from $1.5110. A retest of the $1.5000 round number remains possible with downward pressure growing. .
USDCAD keeps rolling over on both the pair and the RSI suggesting a double top may be forming. Resistance has dropped toward $1.3340 with next support possible near $1.3250.
CADUSD is back above $0.7500 indicating continued support through what appears to be a base building process. RSI suggests downward momentum slowing and a double bottom may have been completed near $0.7425. Initial resistance possible in the $0.7550 to $0.7565 area.
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