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What will traders be looking at today?

A brief technical overview of what traders will be looking at today.

traders
Source: Bloomberg

EUR/USD

EUR/USD can’t decide whether to break above the 20-day moving average at $1.2477. Perhaps more importantly, the downtrend drawn from the 15 October low comes in at $1.2508 and a break here could be very important. I would be expecting a quick move to the 19 November high of $1.2600 on a break of the trend.

AUD/USD

Will the Reserve Bank of Australia (RBA) join the global easing party today at 14:30 AEDT? There’s a clear argument that they should, especially after Phillip Lowe’s comments last week. AUD/USD fell to $0.8416 overnight but has since regained the 85 handle. The 38.2% retracement of the recent sell-off from 17 November is at $0.8562, just above the 7 November pivot low. This level seems important for bullish momentum to evolve.

Spot gold

What a night for gold and silver, with both commodities printing massive bullish reversal patterns. Naturally, we will need to see follow-through buying and a subsequent higher high, but the close above supply around $1200 looks positive. The bulls will want to see a test of the 21 October highs of $1255.32.

Spot silver

Traded in a range of $1465 to $1680, which is almost 15%. One for the brave and certainly traders will need a strong stomach, but unlike gold, silver couldn’t quite close above the recent high on the daily chart. Will we see follow-through buying, or will last night’s US session prove to be a dead cat bounce?

US light sweet crude

It appears the commodity was grossly oversold, with the 14-day relative RSI (relative strength indicator) at 20 and the stochastic indicator also at extreme lows. It seems the stronger-than-expected US manufacturing report (at 58.7) has helped push oil higher on the day. US light sweet crude and Brent are 7% and 6.3% higher respectively from yesterday’s ASX 200 close, so energy stocks should fly today.

Santos (STO)

Pick any energy name to be honest, but STO has been savaged over the last couple of sessions and its 14-day RSI is now at 18, while the stochastic oscillator is 3.5 standard deviations from its 20-day moving average. Those who were brave enough to buy yesterday should be rewarded nicely. Still traders need to decide if today’s rally is a one-day affair or something more substantial. This is the same for names like Woodside Petroleum (WPL) and Worley Parsons (WOR).

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