A softer-than-expected US ADP survey fueled dollar's decline this Thursday

EUR/USD

A softer-than-expected US ADP survey fueled dollar's decline this Thursday, resulting in the EUR/USD pair rising to its highest for the week. Following the slide triggered by FED's Minute, the private sector employment survey showed that during the December, only 153,000 new jobs were added, against the 170K expected and previous 251K. Also, the Job Cuts report for December showed that the employers announced laid-off in the month that were 42% higher than those from a year earlier, when US employers announced plans to shed 33,627 jobs. On a brighter note, weekly unemployment claims fell to 235K in the week ending on December 30th, well below previous 263K and the lowest reading in almost two months. Also, the ISM non-manufacturing PMI, which came in at 57.2 beating consensus of 56.6. The Markit services PMI reached 53.9 in December, from previous 53.4. 

The technical picture is bullish as the day comes to an end, with the pair at 1.0595, and the 4 hours chart showing that the price settled above its 200 SMA for the first time since November 9th, and above the 23.6% retracement of the 1.1299/1.0340 decline. Additionally the Momentum indicator maintains its sharp upward slope within overbought territory, whilst the RSI indicator holds near oversold readings. The mentioned Fibonacci retracement stands at 1.0530, the immediate support and the level to break to deny further gains. A disappointing report on the other hand, can push the pair up to 1.0710, the 38.2% retracement of the mentioned decline. 

Support levels: 1.0530 1.0490 1.0445 

Resistance levels: 1.0615 1.0650 1.0710

USD/JPY

The USD/JPY pair plunged to 115.21, its lowest since mid December, holding nearby ahead of Friday's opening. The pair plunged once it broke below 117.00 following the release of US FED's soft Minutes, accelerating further lower after US employment data released this Thursday disappointed. The ADP survey showed that the private sector added just 153,000 new jobs in December, well below the 170K expected of previous 251K. December is a month when job's creation tends to be above-average, due to seasonal hiring, and this poor ADP somehow anticipates a poor NFP report for Friday. Nevertheless, rather than in jobs' creation, attention will focus on wages after the surprise slump in November. From a technical point of view, the 4 hours chart for the USD/JPY pair shows that the price met some buying interest around a bullish 200 SMA, helped by strong growth in the US services sector last December, but also that it clearly break below its 100 SMA, for the first time in almost two months. In the same chart, the Momentum indicator maintains its sharp bearish slope, whilst the RSI indicator decelerated around 36, both still pointing for a downward continuation on a break below the mentioned daily low. 

Support levels: 115.20 114.80 114.40 

Resistance levels: 116.10 116.60 117.00

GBP/USD

The Pound rallied to its highest in two weeks against the greenback, hitting 1.2432 mid American afternoon, and settled firmly above 1.2400 in a mixture of tepid US employment data and another strong macroeconomic release in the UK. The December Markit Services PMI came in at 56.2 from previous 55.2, the highest reading since July 2015. Following strong Manufacturing and Construction PMIs released during the last few days, data clearly reflects the economy's resilience to Brexit's probable consequences. The rally, however, was triggered by soft US employment data, ahead of the US NFP release this Friday. From a technical point of view, the pair settled above the 38.2% retracement of its latest decline around 1.2400, and currently trades above the 200 EMA, for the first time since mid December. Additionally, the price extended well above its 20 SMA that anyway continues lacking directional strength in the 1.2290 region, whilst technical indicators have pared gains  and are now consolidating, near overbought readings. The next Fibonacci resistance stands at 1.2500, and large selling interest is suspected around it, limiting chances of a steeper recovery. 

Support levels: 1.2400 1.2365 1.2330

Resistance levels: 1.2460 1.2500 1.2550

AUD/USD

The AUD/USD pair advanced for a third consecutive day, up to 0.7356 this Thursday, its highest in three weeks. The Aussie's latest advance was underpinned by stronger-than-expected Chinese data, this Thursday, in the form of the Services PMI for December rising at its highest in 17-month. The index rose to 53.4 in December, from 53.1 in November, according to Markit. Additional, the local AIG Performance of Services Index for November, jumped to 57.7 from previous 51.1. During the upcoming Asian session, Australia will release its trade balance figures for November, showing a large decrease in the current deficit of 1,541 million. From  a technical point of view, the pair is poised to extend its advance, although much of the upcoming direction will depend on the result of the US employment report to be released early Friday. Nevertheless and in the 4 hours chart, technical indicators have settled within overbought readings, whilst the 20 SMA turned firmly higher below the current level, indicating strength in the upward momentum. The price has reached a major resistance, the 200 EMA that maintains a bearish slope around 0.7350, with some follow-through beyond it favoring an extension towards 0.7450, a major static resistance. 

Support: levels: 0.7320 0.7270 0.7220 

Resistance levels: 0.7350 0.7400 0.7450

Dow Jones

Wall Street fell the pain on a weaker greenback, with major indexes closing mixed. The Dow Jones Industrial Average lost 42 points, to settle at 19,899.29, while the S&P shed 0.08%, to end at 2,269.00. The Nasdaq Composite, however, closed at a new record after adding 0.20%, to 5.487.94. Weak US employment data dented investors' mood ahead of the release of the NFP report, while the poor performance of retailed added pressure to stocks. The daily chart for the DJIA shows that the index closed barely above its 20 SMA, whilst the Momentum indicator is flat around its 100 level and the RSI indicator retreats from overbought readings, now around 64, limiting the upward potential. In the 4 hours chart, however, the index presents a modest positive tone, with indicators bouncing from their mid-lines, but below previous daily highs, whilst the benchmark holds around its 20 and 100 SMAs, both flat within a tight 20 points range. The index presents a strong static resistance in the 19,940 region, as advances have been steadily rejected from it ever since the week started. It will take a clear acceleration above it to see the benchmark rallying towards the 20,000 region. 

Support levels: 19,878 19,820 19,758    

Resistance levels: 19,942 19,980 20,045

FTSE 100

The Footsie continued rallying to fresh all-time highs this Thursday, closing at 7,195.31, 5 points or 0.08% higher amid a rally in home builders and mining-related stocks. House builder Persimmon was among the best performers, closing up 7.18% after announcing that private sales in the second half of the year were up 15% from a year earlier. Fresnillo added 10.43%, while Randgold Resources closed up 4.28% and Glencore gained 1.91%, backed by a strong recovery in gold prices. Holding around 7,200, the daily chart shows that the modest advance resulted in technical indicators losing their upward potential, although they hold near overbought readings. In the same chart, the 20 DMA maintains a strong upward slope below the current level and moving further above the 100 DMA, maintaining the risk towards the upside. In the 4 hours chart, technical indicators lack directional strength but hold within positive territory, whilst the 20 SMA advanced further below the current level, now offering a dynamic support around 7,156.

Support levels: 7,156 7,118 7,089 

Resistance levels: 7,225 7,260 7,300

DAX

The German DAX closed flat for a second consecutive day at 11,584.94, as attention centered in mining-related equities this Thursday. The index has rallied to a fresh over two years high this week, before entering a consolidate phase that extends into the end of the week. Deutsche Post was the best performer, up by 1.84%, whilst Deutsche Bank topped losers list, down by 2.12%. The DAX gapped lower at the opening, as the FED Minutes released late Wednesday spurred some risk aversion, but the index trimmed its daily losses after positive EU data opposed to poor US figures. From a technical point of view, the daily chart shows that the Momentum indicator keeps heading lower within positive territory, whilst the RSI consolidates around 74 as the 20 SMA heads north below the current level. In the 4 hours chart, the index maintains a neutral stance, holding a few points above a modestly bullish 20 SMA and with the Momentum indicator heading nowhere around its mid-line.

Support levels: 11,569 11,512 11,458

Resistance levels: 11,623 11,689 11,743

Nikkei

The Japanese Nikkei fell 73 points or 0.37% this Thursday, ending the day at 19,520.69, hurt by a stronger yen. Electronics-related equities, however, remained buoyed, with Pioneer leading gainers, up by 4.84%, followed by Toshiba that added 4.72%. Still, most components closed in the red, as yen's sudden recovery triggered profit-taking. The benchmark fell further in after-hours trading, now trading around 19,450 ahead of Friday's opening, and the daily chart shows that the index has lost the strong upward momentum seen last Wednesday, but the downward potential seems limited, as the index is holding above its 20 SMA, whilst technical indicators eased, but hold within positive territory. In the 4 hours chart, the index bounced from a still bullish 20 SMA, whilst technical indicators pulled sharply lower from overbought readings, holding anyway within positive territory. The daily low was set at 19,372, with a break below it opening doors for a steeper decline, particularly as the USD/JPY pair trades near ¥115.00 for the first time in almost a month. 

Support levels: 19,372 19,304 19,237 

Resistance levels: 19,475 19,528 19,590

Gold

Gold prices continued advancing this Thursday, with spot up to a fresh 5-week high of $1,184.86 a troy ounce. The bright metal closed the day around 1,181.70, gathering pace from a weaker dollar and a slide in US stocks, following FED's Minutes which included the word "uncertainty" fifteen times, tripling previous statement's number, and clearly indicating that policymakers fear upcoming Trump's decisions. Strong data coming from China also supported commodities,  as the latest PMI showed steady signs of growth in the second world's largest economy.  In the daily chart, gold has settled above the 23.6% retracement of the post-US election decline, a strong static support now at 1,173.10. Also, and in the same chart, technical indicators maintain their strong upward slopes near overbought readings, whilst the 20 DMA has lost its bearish slope and stands flat now around $40.00 below the current level. In the shorter term, the metal presents a bullish bias, as the price has broken above all of its moving averages, whilst the 20 SMA is about to surpass the 200 SMA after already crossing above the 100 SMA, and technical indicators hold within overbought readings, pausing their advance, but far from indicating upward exhaustion.

Support levels: 1,179.20 1,173.10 1,165.20    

Resistance levels: 1,184.90 1,191.30 1,200.00

WTI Crude Oil

West Texas Intermediate futures advanced for a second consecutive day, settling at $53.74 a barrel. The advance was supported by the weekly EIA report, showing that crude inventories fell by 7.1 million barrels in the week through December 30th, against expectations of a 2.2 million barrels decline. Gasoline and distillate stockpiles, however, rose sharply with the first up by 8.3 million barrels and the second rising by 10.1 million barrels. The bad news represented by the sharp gain in oil products, was offset by news coming from Saudi Arabia, as the country is expected to cut oil output in January by at least 486,000 bpd, in line with the latest agreement. The daily chart shows that the commodity continues trading in the red weekly basis, but above a now flat 20 DMA, whilst technical indicators aim modestly higher within neutral territory, lacking enough strength to confirm further gains ahead. In the 4 hours chart, the price settled a few cents above its 20 and 100 SMAs, both flat around 53.30, whilst technical indicators head lower, the Momentum below its 100 level and the RSI at 54, in line with the longer term perspective. 

Support levels: 53.30 52.60 51.90    

Resistance levels: 54.20 55.00 55.75

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