US consumer confidence lifts bulls higher

28 December, 2016

US markets were buoyed today by the ever increasing consumer as consumer confidence lifted to a high not seen since 2001, as it breached through 113 (exp 108) showcasing the strength of the US economy. US dollar bulls will be happy to see this as a cherry on top moment for them leading into 2017 and the likelihood of stimulus from the new Trump president. The rest of the coming week is likely to be light on the fundamentals as one would expect this time of year, however, there is still pending home sales and unemployment claims coming up and this should provide some movements. Non-farm payroll in the new year before the presidential appointment will also set the tone for the year ahead and will be closely watched to also see how the FED could kick of the new year as well.

For market movements today the S&P 500 failed to deliver on the back of the big uptick on consumer confidence. This is due in part by many in the market viewing the FED raising rates as having a negative effect on equity markets. The movement higher today though touched on strong resistance at 2272 and this looks likely to be the market level that everyone looks to beat in the short term in the new year. Obviously if we do see a pullback on the charts and the S&P trending downwards, I would expect that the 20 day moving average to act as dynamic support which it has done previously.

Gold has also been another victim of the US bull run as of late, but it had as light resurgence as of late with the market pushing higher and coming up just short of dynamic resistance at the 20 day moving average. Previous resistance at 1143 was not enough to stop the charge, but this could be on the back of low liquidity in the market for commodity trading; hence the drop shortly after the rally. Despite all of this a strong level of support has formed at 1127 and it's likely we could possible see some ranging as a result of this over the coming week so watching key levels could be ideal for precious metal traders.

Finally, the USDCAD is one trade that is worth paying close attention to as it struggles to gather momentum in the marketplace. Oil prices recently were slightly up, but so far the CAD has registered any sort of movement against the USD - the big test will instead be on Thursday with US oil inventories which is expected to show a strong draw down in the market, the question will be if oil prices do indeed rally again strongly will they be strong enough to match the market and cause change.  For now the trend is certainly bullish and resistance can be found at 1.358. It will be interesting to see if the USDCAD can continue the bullish momentum and look to extend before the year closes out. 


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