Macro Morning (oil blows, gold shines)

floor collapse
by Chris Becker

Another collapse in oil prices overnight (I’ll have a closer look later) saw US stocks tumble following a sanguine session for Europe with no significant data releases overnight.

Speculation continued regarding the ECBs QE program, with an interesting note out of RBS telling its clients to “buy everything” before the 22nd January meeting outcome. The barometer of European sentiment, the DAX30 finished up 1.4% but fell alongside US stocks in futures trade:
Chart DAX30, H4, 2015.01.12 21:28 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

The technical picture for the UK FTSE is much weaker and its rolling over towards support on the four hourly chart having broken a tepid uptrend:

Chart FTSE100, H4, 2015.01.12 21:33 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

US stocks all fell about 1% as earnings season got underway, with Alcoa surprising to the upside, but energy stocks were the big drag. The S&P500 was off nearly 0.9% and I’m looking at a downside target in this move at or just below 2000 points before the buy the dip crowd step in:
Chart SP500, H4, 2015.01.12 21:34 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

SPI200 futures are pointing to at least a 40 point loss on the ASX200 on the open this morning. Watch oil stocks get slaughtered while Newcrest take a big bid on the breakout in gold (see below)
Chart SPI200, H1, 2015.01.12 21:36 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Gold has now definitely broken out on the dailies, but is now overbought on all timeframes. I expect a pullback and then another leg up if USD weakness holds. This is not about a repositioning in gold sentiment yet, just the undollar trade as usual:
Chart XAUUSD, D1, 2015.01.12 21:37 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

This hasn’t translated into a rise in its cousin, Dr Copper which fell again overnight on the LME, now at $2.72USD a pound.

The arse has completely fallen out of oil, with WTI crude down 5% to $45.96USD a barrel and Brent crude down 5.4% to $47.40USD a barrel. Where’s the bottom here? $30 is still the downside target.

In currency land, Yen remains under pressure at 118 against King Dollar, with a break below seemingly imminent. Euro could not break free from its Friday NFP rally high at 1.18 and remains stuck at 1.1830 this morning:

Chart EURUSD, H4, 2015.01.12 21:45 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

There is still potential for a breakout here, but all eyes remain on the ECB meeting in a week or so. Cable is forming a nice round bottom on the four hourly charts and has the momentum. Im looking for a breakout above 1.5180 to get things moving:

Chart GBPUSD, H4, 2015.01.12 21:46 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Aussie got smacked down on the collapse in oil prices, falling over one cent against USD, and taking the wind out of its rebound rally. Support at 81.40 beckons, and will under pressure today as China prints its trade data, with longer positions ready for Thursdays unemployment print:
Chart AUDUSD, H1, 2015.01.12 21:53 UTC, VantageFX Pty Ltd., MetaTrader 4, Real

Data today in Asia will centre on the Chinese trade balance print around lunchtime with UK CPI printing later tonight the only standout.

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