Senior Trader Daily Update 18 January 2018

Good morning everyone.
 
The precious metals, having spent their time since mid-December shrugging off regular record highs in US equity markets and instead taking their cues from a backpedalling Greenback to advance strongly, were taken to with a 4x2 overnight in late trade in what was an extremely choppy day. HFT Algo’s piled in and hoovered up US dollars when news hit the wires of Apple’s intention to repatriate its offshore profits and consequently make an estimated USD 38 billion one-off tax payment (likely the largest of its kind).  Additionally, the technology behemoth sketched out its plans to invest more than USD 30 billion to expand its US operations as a result of the recent tax cuts (including construction of a new US campus, data centres and the creation of more than 20,000 jobs, leading to a $350bn “direct contribution” to the American economy over the next five years).
 
Significant bounces were seen out of the day’s lows into the close of trading, likely resulting from investors refocusing on the potential for parts of the US government to commence “shutting down” as early as Friday should no agreement be reached between President Trump and the Democrats in relation to government funding and the debt ceiling. Negotiations presently remain hostage to the white-hot issue of immigration. Specifically, amnesty for illegal immigrants presently residing in the US under the Deferred Action for Childhood Arrivals (a policy that allowed for certain illegal immigrants who entered the country as minors, to receive renewable two-year periods of deferred action from deportation and to be eligible for a work permits), which has created a significant division between Democrats (who support amnesty) and supporters of President Trump, who are pushing for deportation of all illegal entrants to the country.
 
Technically, “double-top” resistance at the USD 1345 level on Jan 15th and yesterday, in addition to the bearish engulfing candlestick yesterday, has increased the likelihood of downside corrective price action bringing targets into play at USD 1319.00 (the 23.6% Fibonacci retracement of the USD 1236.50 to 1345.00 move), 1310.00 (the 21 Day moving average), USD 1303.50 (the 38.2% Fibonacci retracement), USD 1291.00 (conjunction of the 50% Fibonacci retracement and 100 Day moving average) and USD 1275 / 1277 (200 Day moving average / 61.8% Fibonacci retracement).
 
XAU/AUD sits smack bang in the middle of a broader AUD 1615 to 1715.00 sideways trading range with immediate support likely towards the 200 Day moving average at AUD 1653.00 and resistance at AUD 1695.00 (just beneath the psychological big-figure resistance at AUD 1700.00).
 
For the hairy-chested, roulette-wheel spinners of the cryptocurrency world, some relief as Bitcoin held and bounced from just above its 100 Day moving average at USD 8,875 - the crypto ‘darling’ having yielded up to 53% of its value at the lows yesterday since topping out at USD 19,511 on December 18th last year.
 
“If you wanna be a star of stage and screen, look out its rough and mean!...” (Bon Scott). Good luck.