Mid-Day Report: Markets Stay in Range after Mixed US Data

Market Overview | Written by ActionForex.com | Nov 17 08 14:37 GMT |

Market remains rather quiet today, searching for direction. Mixed data from US didn't trigger much volatility neither. One the one hand, Empire Statement Manufacturing index dropped to record low of -25.4 in Nov but was slightly better than expectation of -26. On the other hand, industrial production unexpectedly grew 1.3% mom in Oct, much better than consensus of -0.4% contraction. Capacity utilization was unchanged at 76.4%. Technically speaking, though, firstly, Dollar index once again fails to take out 87.87/98 resistance level and retreats again. As mentioned before, EUR/USD and AUD/USD are likely still staying in consolidation. More importantly, GBP/USD's recovery today argues that some more consolidation is underway. After all, some more pullback is now in favor for the greenback in short term before resuming recent up trend. Elsewhere, DOW opens mildly lower. Crude oil and gold are both staying in tight range so far. Released earlier, Eurozone trade deficit narrowed to -5.6b in Sep. UK Right move house prices fell -2.9% mom, -7.1% yoy in Nov, steeper than prior month's -4.9% yoy. Australian retail sales rose less than expected by a mere 0.1% qoq in Q3 even though it's still an improvement over Q2's -0.6% contraction. Japanese Q3 GDP contracted -0.1% qoq, -0.4% annualized, worse than expectation of 0% qoq, 0.1% annualized. Q2's figures were also revised down from -0.7% qoq and -3.0% annualized to -0.9% and -3.7% respectively. Two successive quarters of contraction in GDP confirmed that Japan is technically in the first recession since 2001. Tertiary industry index dropped -0.6% in Sep, below expectation of -0.5%. GBP/USD Mid-Day Outlook Daily Pivots: (S1) 1.4609; (P) 1.4781; (R1) 1.4907; More GBP/USD's recovery from 1.4557 extends further today and with 4 hours MACD staying well above signal line, an intraday low should be in place. Some more consolidation is in favor. Above 1.4557 will encourage stronger recovery towards 4 hours 55 EMA (now at 1.5327). But upside should be limited below 1.5600 support turned resistance and bring fall resumption. On the downside, below 1.4557 will target mentioned 100% projection of 1.7630 to 1.5269 from 1.6671 at 1.4310. In the bigger picture, there are some different interpretations of the structure of the whole down trend from 2.1161, with different projection targets. Main question is whether fall from 1.8668 is the fifth wave in the five wave sequence from 2.1161 (1.9337, 2.0158, 1.7445, 1.8668, ?) or it's the third wave inside the fall from 2.0158. In either case, fall from 1.8668 is possibly completing a five wave sequence of its own. Strong rebound from 1.4278/4310 cluster projection target (100% projection of 1.7630 to 1.5269 from 1.6671 at 1.4310, 161.8% projection of 2.0158 to 1.7445 from 1.8668 at 1.4278), followed by break of 1.5600 resistance will suggests that a medium term bottom is formed and bring larger scale correction. Though, sustained trading below 1.4278/4310 will target 1.3680 key long term support (01 low).

Economic Indicators Update

GMT	Ccy	Events	Actual	Consensus	Previous	Revised
23:50	JPY	Japan GDP Q/Q Q3	-0.10%	0.00%	-0.70%	-0.90%
23:50	JPY	Japan GDP annualised Q3	-0.40%	0.10%	-3.00%	-3.70%
23:50	JPY	Japan GDP deflator Y/Y Q3	-1.60%	-1.70%	-1.50%	-1.60%
23:50	JPY	Japan Tertiary industry index Sep	-0.60%	-0.50%	-1.40%	-1.30%
00:01	GBP	U.K. Rightmove hse prices M/M Nov	-2.90%	N/A	1.00%
00:01	GBP	U.K. Rightmove hse prices Y/Y Nov	-7.10%	N/A	-4.90%
00:30	AUD	Australia Retail sales Q/Q Q3	0.10%	0.40%	-0.60%
10:00	EUR	Eurozone Trade balance (euro) Sep	-5.6B	-6.0B	-9.3B	-9.4B
13:30	USD	U.S. Empire state mfg Nov	-25.4	-26	-24.62
14:15	USD	U.S. Capacity utilisation Oct	76.40%	76.30%	76.40%
14:15	USD	U.S. Industrial prod'n M/M Oct	1.30%	-0.40%	-2.80%