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Low intraday volume amid year-end holidays kept majors within well-limited intraday ranges

22nd December 2016

EUR/USD

Low intraday volume amid year-end holidays kept majors within well-limited intraday ranges, although the EUR/USD pair managed to regain the 1.0400 threshold. The pair traded as high as 1.0450, but closed the day  a few pips below it, as dollar's dominant stance remains firm. In the data front, the EU released its preliminary estimate for December Consumer Confidence, which came in at -5.1 from previous -6.1, its highest reading in 20 months, which helped the common currency in advancing the last 20 pips towards the mentioned high, although gains were quickly reverted after US housing data surprised to the upside. According to the official release, Existing Home Sales in November rose by 0.7% to a seasonally adjusted annual rate of 5.61 million in November from a downwardly revised 5.57 million in October, beating expectations of a 1.0% decline. November's sales pace is now the highest since February 2007 (5.79 million) and is 15.4% higher than a year ago. Also, the EU preliminary December Consumer Confidence improved, reaching its highest in 20 months, printing -5.1 from previous -6.1. 

The EUR/USD pair technical picture shows that this intraday recovery is mere corrective, as the price remains less than 100 pips away from the multi-year low reached this week, after plummeting almost 1,000 pips in a bit more than a month. It also indicates that speculators are in no rush to unwind their long positions in the greenback against the common currency, implying lower lows are still ahead. In the 4 hours chart the price has managed to settle right above a horizontal 20 SMA, whilst the Momentum indicator has extended its recovery up to neutral readings and the RSI indicator heads modestly lower in the 46 level, suggesting the pair may quickly resume its decline, moreover on a break below 1.0390, the immediate support. 

Support levels: 1.0390 1.0350 1.0320 

Resistance levels: 1.0460 1.0500 1.0545

USD/JPY

The USD/JPY pair recovered from a daily low of 117.10 achieved early Europe, ending the day modestly lower around 117.60, as a pullback in the dollar index and the poor performance of Wall Street, put the greenback under mild pressure. Nevertheless, the pair holds within its early week range, consolidating no far from the multi-month high posted last week at 118.66. The near-term consolidative phase would likely extend over the upcoming sessions, although the US will release several interesting readings this Thursday, including Durable Goods Orders and the final revision of Q3 GDP, which may trigger the final spike of action before the market enters in full-holiday's mode. Short term, the pair is at risk of falling further, as in the 1 hour chart the price is contained by selling interest around a horizontal 100 SMA, whilst technical indicators head modestly lower within neutral territory. In the 4 hours chart, technical indicators lack directional strength, also within neutral territory, whilst the price  remains far above a bullish 100 SMA, currently at 115.36. A break below the weekly low, set last Monday at 116.54, will open doors for a steeper correction down to the mentioned 100 SMA. 

Support levels: 117.10 116.55 116.10

Resistance levels: 117.90 118.30 118.65 

GBP/USD

The GBP/USD pair closed the day marginally lower around 1.2340, with an early advance up to 1.2390 being quickly reverted. There were no major releases in the UK, although the public sector finances as of November 30th showed that UK's  national debt reached a new record high as public sector borrowing rose by more-than-expected, up by £12.210B, sending the national debt to a new record high of £1.655trn. The pair held within Tuesday's range, and technically,  the risk remains towards the downside  in the short term, as in the 1 hour chart, the price has settled below a horizontal 20 SMA, whilst technical indicators have entered negative territory, with the Momentum indicator heading south at fresh daily lows, and the RSI indicator also declining around 42, all aligned for further declines. In the 4 hours chart, the pair has remained well below a still bearish 20 SMA, while the RSI indicator turned south, currently at 34, and the Momentum indicator diverges modestly higher, still below the 100 level. Dips below the 1.2330 support have been quickly reverted, which means that the pair needs now to accelerate below 1.2300 to force buyers to give up, and send the pair towards fresh weekly lows, probably around 1.2250. 

Support levels:  1.2330 1.2290 1.2250 

Resistance levels: 1.2385 1.2420 1.2460

AUD/USD

The AUD/USD pair advanced up to 0.7279 intraday, but quickly turned south and closed the day in the red in the 0.7240 region. The pair has trimmed all of its Tuesday gains, as despite some profit taking on recent dollar's gains, the American currency remains as the strongest in FX board. Weighing on the Aussie, and in fact, in all the commodity-related bloc, was a slump in oil prices following a larger-than-expected build in US stockpiles as reported by the EIA. The macroeconomic calendar will remain empty during the upcoming Asian session, anticipating limited ranges among major pairs. The short term picture for the AUD/USD pair is modestly bearish, as in the 1 hour chart,  the price is now nearing its daily low and below a directionless 20 SMA, whilst technical indicators have turned south within negative territory, after failing to overcome their mid-lines. In the 4 hours chart, a strongly bearish 20 SMA continues capping advances, whilst the RSI indicator resumes its decline after barely correcting oversold readings, in line with further slides towards 0.7210, a major Fibonacci support, as the level stands for the 61.8% retracement of the early year rally. 

Support: levels: 0.7210 0.7175 0.7140

Resistance levels: 0.7290 0.7330 0.7370

Dow Jones

US indexes closed with modest losses in a dull session, with the Dow Jones Industrial Average down by  32 points to settle at 19,942.02. The Nasdaq Composite shed 12 points and closed at 5,471.43, while the S&P lost 5 points, to end at 2,265.18. There was no particular reason for stocks´ retracement, and in fact, macroeconomic news were encouraging, as US housing data beat expectations. The decline was more related to profit taking ahead of a long week of holidays than to diminishing buying interest. The daily chart for the DJIA shows that technical indicators have barely turned lower, but hold within overbought territory, while the index holds far above a bullish 20 DMA. In the shorter term, and according to the 4 hours chart, the Dow is clearly neutral, confined to a tight range above a horizontal 20 SMA, whilst technical indicators retreated partially within positive territory, with the Momentum indicator still hovering around its 100 level and the RSI declining around 58. 

Support levels: 19,894 19,823 19,746    

Resistance levels: 19,984 20,040 20,100

FTSE 100

The FTSE 100 closed this Wednesday at 7,041.42, down by 2 points or 0.04%, as investors struggled for direction in thin trading. Denting investors sentiment was a strong intraday fall in Capita's shares after Goldman Sachs slashed its valuation for the shares from 771p to 595p. The stock closed down 0.72%. Industrials were among the best performers in the region alongside with automakers, and within the Footsie, Ashtead Group gained 1.32%, followed by Rolls-Royce Holdings, up 1.33%. The benchmark maintains its bullish tone in the daily chart, as the Momentum indicator extended its advance within positive territory, now at its highest since early October, while the RSI indicator consolidates around 63. Still, limited volume amid winter holidays can see the index consolidating further this week and the next. In the 4 hours chat, technical indicators have turned neutral, reflecting the absence of directional strength, while the index remains above a sharply bullish 20 SMA, currently at 7,019, the immediate short term support. 

Support levels: 7,019 6,980 6,936

Resistance levels: 7,054 7,080 7,136

DAX

Following a negative start, European equities trimmed early losses and closed the day mostly flat in a choppy session, with the German DAX up 3 points, to close at 11,468.64. News that the Italian Parliament approved a €20 billion bailout for local troubled banks, underpinned investors' sentiment, although it was not enough to boost local shares higher. Among the DAX, Volkswagen was the best performer, up by 1.81%, followed by Linde which added 0.96%. Deutsche Bank, however, led losers' list, down by 3.26%. The benchmark posted a higher high for the year, advancing intraday up to 11,484, and from a technical point of view, it retains its bullish tone, as in the daily chart, the Momentum indicator keeps advancing, despite being in extreme overbought territory, whilst the RSI indicator hovers around 73. In the shorter term, and according to the 4 hours chart, the index is neutral, with the Momentum  indicator hovering around its 100 level and the RSI indicator around 70, while a bullish 20 SMA provides an immediate support around 11,415. 

Support levels: 11,415 11,373 11,338

Resistance levels: 11,484 11,520 11,566

Nikkei

Asian shares closed mixed, but little changed daily basis, with the Nikkei 225 down roughly 50 points, or 0.26%, to settle at 19,444.49. Investors locked gains after reaching a fresh yearly high late Tuesday, following Wall Street's rally that sent the DJIA closer to the 20,000 mark. Most components closed in the red, although auto makers managed to advance, with Nissan closing 2.78% higher and Mitsubishi adding 2.12%. The index hovers around the mentioned close ahead of Thursday's opening, and in the daily chart, the upward potential seen on previous updates remains intact, as despite having turned modestly lower, technical indicators remain within overbought territory and the index far above a bullish 20 SMA. Furthermore, the index recovered quite fast after approaching its weekly low of 19,307, indicating interest on buying the dips. In the 4 hours chart, the technical picture has turned neutral, with the benchmark stuck around its 20 SMA and indicators hovering around their mid-lines, with no clear directional strength. 

Support levels: 19,410 19,362 10,307 

Resistance levels: 19,487 19,542 19,590

Gold

Spot gold closed the day flat just a few cents above $1,131.00 a troy ounce. The precious metal has been under pressure ever since US election resulted in hopes for rising inflation under upcoming Trump´s presidency, further fueled by the latest FED's dot-plot, in where policy makers anticipate three rate hikes for 2017 against two foresaw in September. The non-yielding asset consolidates its latest losses ever since the week started, but retains the bearish bias, with a break below the 1,100.00 level still likely for the upcoming days. In the daily chart, technical indicators have lost directional strength, but the Momentum remains well below its 100 level, and the RSI holds within oversold territory, whilst the 20 DMA continues heading lower far above the current level, all supporting further slides ahead. In the 4 hours chart, the commodity presents a neutral-to-bearish stance, with the price slightly below a horizontal 20 SMA and technical indicators heading nowhere right below their mid-lines. 

Support levels: 1,122.60 1,114.80 1,094.30    

Resistance levels: 1,142.50 1,151.20 1,164.05

WTI Crude Oil

Oil prices fell this Wednesday, following a surprise build in US stockpiles according to the EIA weekly report. West Texas Intermediate crude oil futures fell down to $52.31 a barrel and settled around 52.60, after the US Energy Information Administration reported that domestic-crude stockpiles rose 2.2 million barrels, against expectations of a 2.3-million-barrel fall. From a technical point of view, the daily chart shows that technical indicators have extended their retracements towards their mid-lines, but still hold within positive territory, whilst the 20 DMA maintains its strong bullish slope below the current level, offering a key dynamic support around 51.70. In the 4 hours chart, the risk turned towards the downside, as the price broke below its 20 SMA for the first time  this week, whilst technical indicators entered bearish territory, with the RSI heading lower around 43.  Renewed selling pressure below the mentioned daily low could lead to a test of the mentioned 20 SMA at 51.70, while further declines below this last will probably result in the commodity approaching the 51.00 level. 

Support levels: 52.30 51.70 51.10    

Resistance levels: 52.85 53.55 54.10

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CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 76.3% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.