Daily Trade Recap – 27^th November, 2014

Headlines:

• OPEC leaves production quotas unchanged
• Russia warns of long-term weakness in oil prices
• ECB’s Weidmann says solid public finances let monetary policy work

Data:

• Canada Q3 current account deficit $8.4B vs $11.2B expected
• November 2014 German HICP flash 0.5% vs 0.6% exp y/y
• October 2014 French jobseekers 28.4k vs 15.0k exp
• Countries with fiscal space should use it says Draghi
• German GFK consumer sentiment Dec 8.7 vs 8.6 exp

Recap:

OPEC – Forget a Prius, just go get a 6.4 litre Hemi...

There was really only one market moving overnight whilst the US markets were celebrating Thanksgiving and that was Oil. The OPEC announcement that it would not cut output, nor would it strengthen compliance sent the black stuff straight back from whence it came in the largest one day fall that I have seen. At one point we were down $5.80. Currently we sit at 68.70, down $4.80.

Elsewhere the fall in oil markets bolstered the USD especially against the larger oil producers with the Danish Krona falling sharply. UsdCad closes the day higher by 87 points at 1.1340.

EurUsd sits at 1.2461, lower by 43 points. Cable at 1.5721, down 65 and UsdChf higher at 0.9645, up 33.

UsdJpy held the 117.49 support to close higher by 31 at 117.92, EurJpy pretty much unchanged on the day at 146.95.

Both Aussie and Kiwi close mildly lower on the session with the Aussie giving back all the earlier Asian session gains going out at 0.8517, down 14. Kiwi trades at 0.7856, down 20.

Precious metals both traded lower on the session as the USD rallied. Gold closes at 1189.60, lower by $8.00 and Silver sits at 16.22, down $0.29.

Over in the equity markets it was a quiet session with the Dax30 higher by 25 points at 9970 and right into resistance. As goes UsdJpy so goes the Nikkei which managed to hold the support at 17165 closing the session at 17285 lower by 35 on the day. US markets close the day mixed on light electronic trade with the S&P500 at 2070.38, down 1.75, the Dow30 at 17810, down 3 and the Nasdaq100 higher by 6.50 at 4325.48.

The Day Ahead:

With a half day trade in US markets expect thin liquidity conditions to continue.

On the blotter for the last trading day of November we have EU CPI and Unemployment data. Pre the European session we have plenty of Japanese data headed up by the CPI which could cause some Yen volatility. The Kiwi's get Building Permits and Business Confidence whilst here in Oz we get Private Sector Credit .

Technical Perspective:

WTI Crude

With the 50% Fibonacci support of the 35.09//114.79 rally completely obliterated, focus shifts to the 61.8% retracement level at 65.54 then the favourite 70.7% Fib at 50.44 Crude. Immediate resistance sits at the 50% of this weeks Marabuzo candle at 72.53.Whilst this resistance level holds, continue to expect the market to test the downside with the long term objective at 45.43 from the break of the wedge on the weekly chart.

From a Harmonic perspective the Bullish Butterfly pattern remains valid whilst price remains above the maximum PRZ point at 60.69 which coincides with the resistance turned support on the rally from 35.09.