Weekly Markets Outlook 03-08 Dec 2012

Weekly Markets Outlook 03-08 Dec 2012

Comment:

As I have been commenting over the last few weeks, attempting to trade these markets has been difficult at best given that algos are extremely active in thinning year end trade effectively gunning for stops either side of the market before turning it the other way.

Add to this the continual unexpected news and comments emanating out of both the US (Fiscal Cliff negotiations) and Europe (Greek/ Spanish…bailouts…) which is making holding on to a directional trade almost impossible.

This week will be no better with a barrage of economic data from all corners including; US unemployment Friday, Chinese CPI, PPI, Retail Sales and Industrial Production Saturday, rate decisions by the RBA, RBNZ, BoE, ECB and Japanese elections.

Economic Data:

Date

Time

Currency

Importance

Event

Actual

Forecast

Previous

Dec. 04

02:00

USD

ISM Manufacturing Index

51.3

51.7

14:30

AUD

Interest Rate Decision

3.00%

3.25%

14:30

AUD

RBA Rate Statement

Dec. 05

01:00

CAD

Interest Rate Decision

1.00%

1.00%

11:30

AUD

GDP (QoQ)

0.6%

0.6%

Dec. 06

00:15

USD

ADP Nonfarm Employment Change

125K

158K

07:00

NZD

Interest Rate Decision

2.50%

2.50%

07:00

NZD

RBNZ Rate Statement

11:30

AUD

Employment Change

0.2K

10.7K

11:30

AUD

Unemployment Rate

5.5%

5.4%

23:00

GBP

Interest Rate Decision

0.50%

0.50%

23:45

EUR

Interest Rate Decision

0.75%

0.75%

Dec. 07

00:30

USD

Initial Jobless Claims

381K

393K

00:30

EUR

ECB Press Conference

02:00

CAD

Ivey PMI

59.0

58.3

21:00

EUR

ECB President Draghi Speaks

Dec. 08

00:30

USD

Nonfarm Payrolls

90K

171K

00:30

USD

Unemployment Rate

7.9%

7.9%

Dec. 09

12:30

CNY

Chinese CPI (YoY)

1.7%

12:30

CNY

Chinese CPI (MoM)

-0.1%

Dec. 10

10:50

JPY

GDP (QoQ)

-0.9%

Dec. 11

21:00

EUR

German ZEW Economic Sentiment

-9.8

-15.7

Dec. 12

00:30

CAD

Trade Balance

-0.8B

20:30

GBP

Claimant Count Change

10.1K

Technicals:

Given the week ahead rather than looking to the Daily chart I’ll stick to the 4 hrly charts this week.

Whilst I have not covered the Yen crosses please keep an eye on the 81.50/60 level UsdJpy as a break would signal a deeper decline and also reverse the crosses.

ES - E-mini S&P – 1416.00

Upward bias remains intact with 1421.25 – 88.6% Fib then 1431.50 100% Fib upside targets. Initial support sits at 1406.75 then 1401.25 – 200 Ema with strong trend support currently located at 1395.75. Momentum indicators are currently in over-bought mode and exhibiting bearish divergence although Daily indicators still support a test higher before a retracement.

A sustained break above 1431.50 targets trend resistance at 1443 whilst a break of the pivotal 1383 level would have us targeting 1346.50.

CL – WTI Crude Oil -  89.11

Upside bias persists inside of the up-channel whose boundaries are marked by 85.14/90.43. Favour the idea that CL is currently in a final 3^rd drive of a 3 Drives pattern whose measured move target is located at 90.16 before a retrace lower initially targeting the 200 Ema at 87.60. Hrly close below would the target 86.56 then 85.75.

Gold – 1718.50

Gold’s inability to find support on its brief foray above 1735 last week places us back in the well-trodden range of 1705/1735. Believe that any attempts higher at present will be met with end of quarter/year window dressing by hedge funds keen on booking profit on long positions.

Near term price looks to be restricted to 1705/1737.50 with 1722.50 closes pivotal to immediate hourly direction.

 

DXY – US Dollar Index –

Not a lot to say on the DXY with the 80.00 level key to near term direction. A break would initially target 79.60 then 79.00. Should however the 80.00 level hold then would expect the market to target 80.50 then 80.85.

 

EurUsd – 1.3038

Currently challenging the 78.96 Fib at 1.3035 with trend resistance above at 1.3085 then 1.3130. Whilst upside momentum still exists the strong bearish divergence condition in the charts has me expecting a topside failure and retreat back towards the pivotal 1.2890/1.2900 zone and 50 Fib on a 4 hourly close back under the 50% Marabuzo at 1.3010.

As a side note watch EurGbp which is currently targeting 0.8143 resistance for a turnaround in the EurUsd.

AudUsd – 1.0407

The RBA rate announcement dominates trade at present… The charts currently paint a bearish view of the Aussie, although we need a 4 hrly close under the stubborn 38.2 Fib at 1.0411 to encourage a drop to the 50 Fib at 1.0387 then into stronger support located at 1.0364 – 61.8 Fib and the 444 Ema.

Topside resistance is located at the 34 Ema currently at 1.0434 with a close above immediately targeting previous support turned resistance at 1.0465.

As always keep an eye on the EurAud as it has been leading the Aussie around by the nose of late.

Have a great week,

Richard J Lowe
Commodities & FX Trading

Mobile +61 401 820 830 Office 1300 333 ORB
Email richard@orbglobalinvestments.com
Int +61 2 9216 1333  Fax +61 2 9216 1331

Address Level 4/5 Elizabeth Street, SYDNEY, NSW 2000
Website www.orbglobalinvestments.com

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