S-T Mo Failure Defers S&P Bull into Year-End, Defines Tight Bear Risk Level 6-12

Posted on 12/6/2017 8:10 AM by Dave Toth

Although the 240-min chart above shows that the market has yet to fail below last Fri’s 2605 intra-day corrective low, we believe its failure yesterday below Mon’s 2633 initial counter-trend low as well as a 240-min close below Fri’s 2633 corrective low close is sufficient to conclude a bearish divergence in momentum and complete 5-wave Elliott sequence from 15-Nov’s 2555 low to Fri’s 2665 high as labeled above.  Per such Fri’s 2665 high serves as a tight but objective risk parameter from which traders can objectively base non-bullish decisions like long-covers and cautious bearish punts.

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FX Market Update 6-12

Market Briefs

• EUR/USD 0.02%, USD/JPY -0.38%, GBP/USD -0.47%, EUR/GBP 0.48%
• DXY -0.06%, DAX -1.02%, FTSE -0.14%, Brent -0.65%, Gold 0.12%
• DE Industrial Orders MM Oct, 0.5%, -0.3% f’cast, 1.0% prev
• Swiss CPI rises 0.8% y/y in Nov vs 0.9% f/c
• No Brexit deal this week, Sun political editor cites DUP source as saying
• DUP declines to comment on whether Brexit border deal possible by end of week
• Britain’s May working towards EU summit, progress made in talks – spokesman
• ECB should plan for end of bond buys: Mersch
• Britain has not formally assessed impact of Brexit on economy – Brexit minister
• BOJ’s Masai advocates staying with ‘powerful easing’, warns on side-effects
• China Nov data to show economy facing pressure from debt, pollution crackdowns
• Israel’s shekel dips vs dollar on fears over US Jerusalem decision
• Oil falls after rise in US fuel stocks; doubt grows over global growth
• Gold recovers from 2-month low as dollar weakens

Looking Ahead – Economic Data (GMT)

• 12:15 ADP National Employment Report (mkt +185k, prev +235k)
• 12:30 Productivity (revised Q3) (mkt +3.3% q/q AR, prev +3.0% q/q AR)
• 12:30 Unit Labor Costs (revised Q3) (mkt +0.3% q/q AR, prev +0.5% q/q AR)
• 14:30 EIA Weekly Petroleum Status Report
• 20:00 Treasury STRIPS

Looking Ahead – Events, Other Releases (GMT)

• 13:45 FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.515 bn)
• 15:45 FedTrade operation 15-year Fannie Mae / Freddie Mac (max $565 mn)
• 15:00 Bank of Canada key policy rate announcement – Ottawa
• N/A ECB Governing council meeting – Frankfurt
• N/A ECB’s Juncker speaks on ESM fund bailout – Brussels

Currency Summaries

EUR/USD

• EUR/USD becalmed. Asia 1.1817/48, Europe 1.1812-43 after 1.1801-67 in NA
• Lower bund yield, wider spreads to UST making little or no impact
• Rates weighing on those long EUR, but bad day for stocks likely aids EUR
• CB activity also working to underpin EUR. Russia latest to up intervention
• Rebalancing of USD buying across EM in major FX pairs will prop EUR
• ADP data @ 13.15GMT. EUR 1.7bln exp 1.1800-25 today

USD/JPY

• Spot collapsed from 112.62 to hit 111.99 ahead of latest consolidation
• Risk aversion, BoJ commentary & positioning saw bouts of selling in Asia
• BoJ Takako Masai: Japanese inflation skewed to downside
• USD/JPY bears zero in on Fibonacci levels under 112
• USD/JPY longs at risk but mitigated by EBS sales since Nov 28
• Risk off sentiment shows up in Nikkei index which closed down almost 2%

EUR/CHF

• Friday’s 1.1737-11.1601 range continues to contain EUR/CHF trade
• Cross remains supported ahead of the rising daily cloud, 1.1529/1.1594
• While above the cloud the slow EUR/CHF rise is likely to persist
• Plays 1.1660-1.1693 in Europe. 1.1702 was Tuesday peak
• USD/CHF has gained through the cloud since Friday’s 100-DMA rebound
• Cloud top at 0.9877 while Wed’s high is 0.9888 in Europe. 0.9856 the low
• Bull focus remains on 61.8% & Nov 9 low at 0.9922/23 ahead of NFP Fri

EUR/GBP

• Cable fell to 1.3362 (1wk low) during European am amid Brexit uncertainty
• DUP leader Foster says will not be rushed on Brexit border text
• Clock is ticking towards “deadline of deadlines” for Brexit divorce offer
• EUR/GBP up to 0.8853 intra-day high during European am
• 0.8868 was Tuesday’s six-day high, before drop to 0.8782
• Telegraph-‘Johnson & Gove lead cabinet revolt’ re: soft Brexit fears

USD/CAD

• USD/CAD fell to 1.2657 during the European am. 1.2707 was Asia high
• Bids expected near 1.2644 (55DMA) & 1.2624 (Tuesday’s six-week low)
• BoC is expected to keep its key interest rate at 1.0% at 1500GMT
• CAD could gain if accompanying BoC statement relatively hawkish

AUD/USD

• AUD/USD held above 0.7572 & below 0.7600 through the European am
• 0.7572 was Asia low after Australian Q3 GDP data miss
• Bids expected near 0.7550 (0.7551 was last Friday’s low)

NZD/USD

• NZD/USD extended north to a 1wk high of 0.6916 during European am
• 0.6870 was Asia low. 0.6908 was Tuesday’s high
• AUD/NZD extended south to 1.0966 during the European am
• 1.1090 was Asia high, before Australian Q3 GDP data miss

FX OPTIONS

• GBP options remain sought amid Brexit uncertainties and spot volatility
• 2-week vol most sought over FED, MPC and EU summit, 10.25 or 214 pips
• EUR/USD stagnation in 1.18-1.19 range weighs on vols
• 3-month EUR vols and puts bid since Monday – likely date of Italy elections
• USD/JPY flow still pre FED expiry strikes between 111-113
• 2-week ZAR 28.0/4.8% over ANC election. O/n CAD 16.0/84 pips over BoC

COMMENT

Fed – Loose financial conditions unlikely to reverse

Yesterday BofA announced plans to buyback an additional $5bn of shares by June 2018. Also yesterday Mastercard approved a new share repurchase program of up to $4bn as well as raising its dividend. The twin themes of share buybacks and increased dividend payments are seen as a boon for financials and tech stocks, especially on the back of tax reforms. However, this does not explain the recent divergence in the performance of the tech sector compared to financial stocks. This is a divergence that has played out in an outperformance of S&P500 vs Nasdaq, as well as increased inflows into financial ETFs over tech ETFs. However, this rotation into financials from tech should be seen as temporary as tech companies dominate the league when it comes to cash held abroad (APPL and MSFT being first and second place).

Remember, however, that when it comes to financials returning cash to investors, its not about the tax code but also the Fed’s decision earlier in the year. The passage of the annual stress tests saw the Fed allow banks to payback 100% of their projected net income over the next four quarters, compared with 65% after last year’s results. This is the first time the figure is 100% since the financial crisis.

The loosening of financial conditions looks unlikely to reverse quickly as equity markets move higher and bond bears find little mileage and USD remains range bound. We think this will allow the Fed, despite discomfort over subdued wages/inflation, to continue to normalize policy by hiking interest rates every quarter until they reach 3.25/3.50% (see “Fed – No reason to pause, risks still asymmetric”; Dec 4 nL8N1O41NX). The risk remains tilted toward the Fed accelerating normalization via its balance sheet, but this is a more likely scenario for 2019. US FCI 01122017

CHART FOCUS

EUR/GBP setup bearish but warning signs emerge

EUR/GBP weekly charts retain a bearish bias and longer term short players can continue to target the 61.8% Fibo of the April to September 0.8315 to 0.9307 rise at 0.8694. Attempts since September to break lower have based in the mid to lower 0.8700s but the weekly cloud twist circa 0.8550 this week could help fuel a deeper move south. Closer to market EUR/GBP is caught between two MAs. The lack of a sustained break/close under the 200-DMA, at 0.8801 on Wednesday, is limiting further weakness while the falling 10-DMA at 0.8857 is capping the upside. There has been no significant move under the 200-DMA since May and short players can consider covering another rebound from there for profit. A break above the 10-DMA would hint at a more substantial rebound but bears should not be too concerned until a sustained break and close inside the daily cloud, which spans 0.8881/0.9020 Wednesday, occurs

Futuro del peso mexicano 6-12

  • USD/MXN up v Tues cls, opens NY 18.7950, holds nearby; o/n 18.8170-18.7415
  • NAFTA uncertainty, rising US rate outlook & high MX inflation weigh on MXN
  • MX cons conf at 9AM, Inflation tomorrow; US ADP employment at 8.15
  • USD/MXN res 18.8170 Wed high, 18.8309 21-DMA, 18.9154 daily cloud top
  • Support 18.7527 21-HMA, 18.7415 Wed low, 18.7098 daily pivot
 Futuro del peso mexicano 6-12

FX Market Update 5-12

Market Briefs

• EUR/USD -0.01%, USD/JPY 0.04%, GBP/USD -0.49%, EUR/GBP 0.48%
• DXY -0.06%, DAX -0.68%, FTSE 0.01%, Brent -0.24%, Gold 0.01%
• EZ Markit Comp Final PMI Nov, 57.5, 57.5 f’cast, 57.5 prev
• EZ Markit Svcs Final PMI Nov, 56.2, 56.2 f’cast, 56.2 prev
• EZ Retail Sales YY Oct, 0.4%, 1.5% f’cast, 3.7% prev
• DE Markit Comp Final PMI Nov, 57.3, 57.6 f’cast, 57.6 prev
• DE Markit Svcs PMI Nov, 54.3, 54.9 f’cast, 54.9 prev
• FR Markit Comp PMI Nov, 60.3, 60.1 f’cast, 60.1 prev
• FR Markit Svcs PMI Nov, 60.4, 60.2 f’cast, 60.2 prev
• GB Markit/CIPS Svcs PMI Nov, 53.8, 55.0 f’cast, 55.6 prev
• IT Markit/ADACI Svcs PMI Nov, 54.7, 53.2 f’cast, 52.1 prev
• EU to decide on tax haven blacklist, assess US tax reform
• ECB QE data offers further incentive to snap-up Italian bonds
• Oil steadies above $62, expected fall in US inventory supports
• Gold steadies above $1,275/oz as dollar stabilises

Looking Ahead – Economic Data (GMT)

• 12:30 US International Trade (Oct) (mkt -$47.5 bn, prev -$43.5 bn)
• 12:55 US Redbook Same-Store Sales Index (weekly) (prev +4.8% y/y)
• 13:30 CA Trade Balance C$ (Oct) (-2.70B f’cast) (-3.18B prev)
• 13:45 US Markit Services PMI (final Nov) (flash 54.6)
• 14:00 US ISM Nonmanufacturing PMI (Nov) (mkt 59.0, prev 60.1)
• N/A US Atlanta Fed GDPNow (Q4) (prev +3.5% q/q AR)

Looking Ahead – Events, Other Releases (GMT)

• 11:45 FedTrade operation 30-year Ginnie Mae (max $1.405 bn)
• 14:00 Riksbank’s Stefan Ingves will speak at a conference – Stockholm
• 15:00 Senate banking committee vote meetinG for Fed chair – Washington
• N/A ECB’s Constancio participates in a meeting – Brussels
• N/A EU Economic and Financial Affairs meeting – Brussels

Currency Summaries

EUR/USD

• Closed NY 1.1862, 1.1876-42 range today. 1.1830 Mon’s low
• Support daily cloud top 1.1833, 30 Nov low/38.2% of 1.1553-1.1961 1.1809/05
• Initial resistance Mon’s 1.1897 hi, Fri’s 1.1940 hi before 27 Nov 1.1961 range peak
• DXY 93.03-30, Fri/Mon low/hi 92.60/93.36, 100DMA resistance 93.35 now
• US 10yr yld 2.37 vs 2.42 Fri/Mon, 10yr DE/UST 205 vs wide since April 209 Mon
• EU PMI and retail sales fail to excite, looking ahead to US trade and PMI later
• 1-week implied vol break even not pricing much at 86 pips – also gets NFP
• Option risk reversals hold firm EUR call bias, but 3mth better for puts (Italy election)

USD/JPY

• USD/JPY range has been 112.38-112.69 so far
• Asia predominantly sold on EBS to 112.38, 2 ticks above Monday’s 112.36 low
• London bought market in the 112.50s on arrival but failed to crack 112.70
• Bulls face uphill task as Monday’s price action is against them
• Mon’s daily candle had big upper shadow, small real body & no lower shadow
• Technical & positioning supply likely to cause drop below 112
• There is talk of a decent bid below 112.00 which might limit a deeper fall
• NY cut expiries: 112.00 (1.2B), 112.25-35 (430M) & 113.00 (816M)

EUR/CHF

• Slow rise in EUR/CHF likely to persist, fresh 1.1702 rebound high early Europe
• Some intraday easing to 1.1674 but bid returns. Tenkant at 1.1668 helps prop
• Above 1.1641 30-DMA keeps bull trend alive. Ichi cloud supportive, 1.1518/85
• Long players continue to target 1.1737 then the prior floor at 1.20
• 1.1737 = highest since 0.8500 was hit after the SNB removed the 1.20 floor
• Marginal new recovery high for USD/CHF at 0.9869, threatens 0.9867 cloud top
• No clear break seen yet but move above likely as dollar maintains Monday gains
• Thurs high the 21-DMA at 0.9882/83 now key pre-NFP Friday

EUR/GBP

• Cable fell 90 pips to a six-day low of 1.3370 in early European trade
• EUR/GBP simultaneously rose half-a-penny to 0.8868 (six-day high)
• Pound’s losses spurred by absence of Brexit breakthrough Monday
• Britain confident of Brexit deal as May scrambles to win over DUP
• 1.3431 = cable high since 1.3370. 0.8828 = EUR/GBP low since 0.8868
• UK Nov service sector PMI 53.8 vs 55.0 f/c. UK Oct service PMI 55.6

USD/CAD

• USD/CAD down to 6wk low of 1.2641 ahead of North American open
• 1.2656 was Monday’s low (1.2717 = subsequent rally high)
• BoC is expected to keep interest rates unchanged Wednesday

AUD/USD

• A large 0.7645 option expiry for NY cut is helping to anchor AUD/USD
• AUD 622mn strike. 0.7637-0.7650 range for AUD/USD since 0700GMT
• 0.7654 = 3wk high in Asia after Aussie retail sales beat & RBA event risk

NZD/USD

• NZD/USD gravitated from 0.6872 to 0.6900 during the European am
• 0.6900 option expiry for NY cut, NZD 386mn strike. 0.6908 = Asia high
• Spencer said RBNZ has become more flexible on inflation targeting

FX OPTIONS

• GBP options sought amid ongoing GBP volatility and event risk
• 2-week gets EU summit, Cable vol break even 200 pips, EUR/GBP 133 pips
• 3mth EUR puts firmer as expiry (5 March) is likely date for Italy election
• Short dated G10 majors vols propped by impending NFP and CB risk
• Market not pricing much however, suggesting no spot break-out expected pre X-mas

COMMENT

ECB – Mystery unresolved, EONIA ripples beyond O/N

O/N EONIA has come off its highs from last week but it has yet to fully normalise back to around -0.36%. At -0.32%, the fixing yesterday suggests the distortion in the overnight rate has eased, especially as this move has come on the back of declining volumes. After €4.2bn traded on Thursday and €4.4bn Friday, volumes on the O/N were €3.8bn on Monday. However, it has started to ripple to 1wk and 2wk EONIA, where rates are elevated as concern remains that the distortions on the O/N rate will persist. Take a look at the chart below if you are on Thomson Reuters Eikon. While there is a consensus that the explanation for the distortion is related to excess liquidity at a Greek bank (there is only one in the panel for EONIA) uncertainty remains as to why it happened. If the source is related to settlement issues around the recent Greek bond exchange then it might be that the MRO operation that settles tomorrow (new Greek bonds settle today) will help relieve the situation. However, if the Greek banks are now actively moving to wean themselves off expensive ELA funding and thus have excess liquidity, then we may be looking at periods of more persistent distortions.

What is clear is that once the MRO settles on Wednesday, the fix for tomorrow will be keenly watched. If O/N EONIA fails to stabilise then we could be looking at distortions that are a function of an excess liquidity situation at a single Greek bank. The latest episode underscores the ECB’s desire to deliver a new O/N benchmark rate based on a wider sample of transactions beyond the interbank market by 2020 (see ECB – EONIA puzzles, new benchmark before 2020; Dec 1. EONIADEC2017 :

CHART FOCUS

USD/TRY on track for a deeper fall, cloud beckons

USD/TRY looks to be on track for a deeper retreat according to technicals and the pullback could test as low as the 3.70s. The daily Ichi cloud spans 3.7381/3.6554 on Wednesday: a rising and relatively thick cloud often provides decent support and the top of the cloud could prop this correction. With that in mind longer term players can use current easing as an improved opportunity to join the underlying bull trend while above the daily cloud. Intraday price action is pulling farther away from the 10-DMA, which had provided a rough prop since the mid September bounce. The average has flipped to resistance at 3.9209 and showing signs of rolling over. An Harami reversal is playing out on the weekly charts after USD/TRY made a fresh all time high on November 22 at 3.98 but Friday’s close will be watched carefully for confirmation. Overbought weekly trend indicators also favor the correction theory. Note that a break inside the aforementioned daily cloud risks a more substantial reversal and the bears will take over. USD/TRY weekly

Futuro del peso mexicano 5-12

 

  • USD/MXN opens NY 18.6135 rises to 18.64; o/n range 18.64-18.5770
  • Ranges tight across EM/DM CCY space, lwr oil, higher UST rates aid USD lift
  • MX cons conf Wed, inflation Thurs, abv target infl may keep rates high
  • USD/MXN supt 18.6203 hrly cloud base, 18.5770 Tues low, 18.4667 200-DMA
  • Res 18.6425/18.6433 Tues high/daily pvt area, 18.7305 55-DMA

Futuro del peso mexicano 5-12

 

FX Market Update 4-12

Market Briefs

• EUR/USD -0.33%, USD/JPY 0.74%, GBP/USD -0.31%, EUR/GBP 0.01%
• DXY 0.39%, DAX 1.14%, FTSE 0.7%, Brent -0.66%, Gold -0.54%
• DXY techs: breaks back inside daily cloud but capped at 93.355 100DMA
• EZ Sentix Index Dec, 31.1, 33.6 f’cast, 34.0 prev
• EZ Producer Prices MM Oct, 0.4%, 0.3% f’cast, 0.6% prev
• EZ Producer Prices YY Oct, 2.5%, 2.6% f’cast, 2.9% prev
• GB Markit/CIPS Cons PMI Nov, 53.1, 51.0 f’cast, 50.8 prev
• Japan consumer confidence at 4-year high on stocks, job market
• BOJ is resolved to keep ultra-easy policy, says Kuroda
• China says 2018 growth target to reflect new changes in economy
• Oil falls after US drilling picks up
• Gold price slides towards four-week lows, at risk from higher dollar

Looking Ahead – Economic Data (GMT)

• 13:45 ISM-New York Report on Business (Nov) (prev 51.6)
• 14:00 Factory Orders (Oct) (mkt -0.4% m/m, prev +1.4% m/m)
• 14:00 Factory Orders ex-Trans (Oct) (prev +0.7% m/m)
• 14:00 Core Capital Goods Orders (Oct) (prev -0.5% m/m)

Looking Ahead – Events, Other Releases (GMT)

• 11:45 FedTrade operation 30-year Fannie Mae / Freddie Mac (max $1.510 bn)
• 12:00 Riksbank executive board meeting – Stockholm
• N/A ECB’s Draghi and Coeure participate in a Eurogroup meeting – Brussels

Currency Summaries

EUR/USD

• EUR/USD reversed early London 1.1865-37 dip, peaked 1.1878, settles 1.1850’s
• Seemingly lacking direction, awaits NY open. Daily cloud top supports 1.1833
• Bull bias remains intact whilst 30 Nov 1.1809 low holds, bids surround here
• DXY supported by US Tax plan advancement, but pinned to 92.50-93.50 range
• 100DMA caps DXY today 93.36. US/DE 10yr yield spread 206 vs early 209 wide
• Market looking ahead to data/risk events, props related vols leading to NFP, FED, ECB
• Risk reversals hold a clear topside bias, curve by multi year highs for EUR calls

USD/JPY

• Monday’s USD/JPY range has been 112.36-113.07 so far
• Capped by 113.13 cloud top & 113.25 Fibo — 61.8% of 114.73 to 110.85 fall
• USD/JPY knife edge, longs are exiting at lofty levels
• Spot collapsed to 111.40 on Friday Trump-Flynn headlines, before recovering
• There was a big spike in volume on EBS the hour USD/JPY collapsed to 111.40
• The sustained recovery since has been on meagre EBS volume Fri & Mon
• This highlights the fact that the recovery on Fri & Mon are not confirmed

EUR/CHF

• USD/CHF rose Monday from Friday’s 0.9736 low in line with a firmer dollar
• USD up across the board after U.S Senate tax plan approval over the weekend
• USD/CHF plays 0.9822-45 in Europe. 0.9780-0.9849 has been the day’s range
• Base of the daily Ichi cloud at 0.9731 lends support, propped Friday
• Top of the cloud is at 0.9865, could see a retest there
• EUR/CHF is higher after Friday’s massive drop fm 1.1737 to 1.1601
• Bidding interest naturally seen at fig & tech support from daily cloud
• The cloud is rising and spans 1.1486-1.1581 Monday. Break inside is unlikely
• 1.1615-1.16700 Mon, 30-D Bolli top @ 1.1710 is resist, then Fri 1.1737 peak
• 1.1737 = highest since 0.8500 was hit after the SNB removed the 1.20 floor
• Domestic sight depos fall w/e Dec 1, no need for SNB action

EUR/GBP

• Cable slid to 1.3418 in early London trade, before rallying to 1.3458
• 1.3432-1.3514 was Asia range (low before high)
• Bids expected near 1.3400 (1.3406 was Nov 30 low)
• GBP could drop sharply if no Brexit talks breakthrough Monday
• IMM specs flipped to net long GBP for 1st time in 4wks in week to Nov 28
• UK Nov construction PMI 53.1 vs 51.0 f/c. Follows UK mfg beat Friday

USD/CAD

• USD/CAD fell from 1.2726 to threaten 1.2683 during the European am
• 1.2683 was Friday’s low. 1.2673 was Nov 23 low. 1.2666 = Nov low
• BoC is expected to keep interest rates unchanged this week

AUD/USD

• AUD/USD met fresh headwind pre-0.7610 after rising from 0.7580
• 0.7580 = early Europe low. 0.7609 = European am high
• Offers ahead of 0.7610 also kept lid on pair in Asia
• More offers tipped pre-0.7650 (0.7645 was last week’s high)
• Large 0.7645 option expiry Tuesday, AUD 622mn strike

NZD/USD

• NZD/USD based at 0.6840 after extending south from 0.6913
• 0.6913 was Friday’s high after USD hurt by Flynn news
• RBNZ Governor Spencer to speak on Tuesday at 1.15pm local time
• “Low inflation and its implications for monetary policy”

FX OPTIONS

• Event risk a prop for shorter dated vols, NFP Friday, FED, ECB, BOE next week
• 2-week the favoured long as gets all risk events and EU leaders summit
• Brexit at the fore, PM May meets EU Barnier and Junker today, GBP vols bid
• EUR/USD risk reversals still firmly biased to EUR strength
• USD/JPY holds broader range to cap vol demand but JPY call bias pressured of late

COMMENT

USD/JPY bulls maybe stymied by decent supply above 113

While USD/JPY bulls are looking to seize control, there are still significant obstacles above which may lead to a reversal back below 112.00. There seems to be plenty of supply ahead of the daily cloud top at 113.13 and the important 113.25 Fibonacci level — 61.8% retrace of the 114.73 to 110.85 November fall. These technical offers are intermingled with those USD/JPY longs seeking to exit positions at these relatively elevated levels. While IMM net short yen positions as of November 28 fell from 122,602 to 110,640 contracts, this still represents a rather large equivalent cash position of US 12.4 billion. This has been mitigated to some extent by the net USD/JPY selling seen on EBS throughout last week and Monday, there are likely to be further significant sell offers and stops associated with these oversized longs which will likely limit further gains. Only a daily close above the 113.25 level will provide fuel bulls for the next leg higher. Mon’s EBS Flow Chart:

CHART FOCUS

USD/ZAR a story of two clouds

Slight conflict on weekly and daily clouds but on balance fading the daily cloud top with a modest objective and a stop and reverse tight above is the favoured strategy. Big down candle and break into the falling weekly cloud last week. Mild recoveries from a 13.5575 Nov 29 low weakened the bear candle but still have downside conclusions from weekly chart. Dailies contained and also have bearish pointers but with some caution. Price is within the 13.5483-13.8115 daily cloud but the cloud is thickening and rising and USD/ZAR is tracking the cloud top closely. There is room for the market to reach 14.0950, where the cloud starts to decline and thin on Dec 21. However, a couple of close to market hurdles in the form of 10 and 55DMAs at 13.8055 and 13.7985 respectively add to the bear potential

Futuro del peso mexicano 4-12

FX- MPZ@ 535.00 OI @ 176296 Up 1525

 

  • USD/MXN opens NY 18.6245 rises a touch to 18.65; o/n range 18.71-18.6185
  • Pair shrugs off USD rally, DXY +0.3% in wake of US tax overhaul nL1N1O2093
  • Focus shifts to US NFP (Rtrs f/c +198k v 261k pvs)for hints at Fed hike path
  • USD/MXN support 18.6185 Mon low, 18.6035 hrly cloud base, 18.55 Fri low
  • Res 18.6554 10-HMA, 18.7009 upper 21-h Bolli, 18.71 Monday high