10 July: Forecast: FX: US$/Majors

By | July 10, 2017

 

EURUSD: 1.1400
24 Hour Outlook: Prefer to sell rallies  – tight SL Medium Term: Possibly prefer to buy dips.
Preferred 24-hour Strategy:  EurUsd is more or less unchanged following Friday’s unemployment outcome but the good headline figure for the NFP should be dollar supportive, I suspect, as it probably reaffirms another rate hike from the Fed ahead of the end of the year. With strong resistance in the 1.145/55 area selling rallies with a tight SL seems to be the plan for now although the longer term momentum indicators do hint at further Euro strength down the track.

Minor support lies at Friday’s low of 1.1380 and then at 1.1350/50, below which could see a return to 1.1320/30 and possibly to 1300/10. Below here may see a move to 1.1280 and possibly to 1.1260, but down here, buying dips still seems to be the plan given the positive look of the longer term momentum indicators. If wrong, below 1.1260 could then see a slide towards 1.1235

The Euro briefly spiked up to 1.1440 on Friday following the Jobs data, and this remains resistance ahead of the previous target of 1.1445/50. Beyond this would trigger plenty of stops and would then open the way to the May 2016 high of 1.1616. Although this seems rather unlikely for a while to come the longer term indicators do hint that we may eventually get there.

Resistance Support
1.1530 Minor 1.1379 Friday low /200 HMA
1.1500 Minor 1.1355 Minor
1.1480 Minor 1.1320 (38.2% of 1.1117/1.1445)
1.1445 Descending trend resistance/29 June high/29 June high 1.1311 5 July low
1.1439 Friday high 1.1285 (50% of 1.1117/1.1445)

Economic data highlights will include:

M:  German Current Account, Trade Balance, (May), EU Sentix Investor Confidence Survey (July), US Consumer Credit (May)

T:  US Wholesale Inventories (May), API Weekly Crude Oil Stock Inventory

W: EU Industrial Production, EIA Crude Oil Stocks Weekly Change, Beige Book

T:  German CPI/ HICP, US PPI (June), Jobless Claims

F: Bastille day Holiday – France, EU Trade Balance, US Retail Sales, CPI, Industrial Production, Capacity Utilisation  (all June), Michigan Consumer Sentiment Index (July), Business Inventories (May)


USDJPY: 113.90
24 Hour Outlook: Prefer to buy dips Medium Term: Mildly Bullish
Preferred 24-hour Strategy: US$Jpy spiked briefly up to 114.17 on Friday, and while the short term momentum indicators look a little toppish, further gains would seem favoured in the days to come.

The hourly momentum indicators are beginning to look a bit heavy to me and we may see a near term drift lower, back towards 113.50 and possibly even to Friday’s low at 113.09.  If so I would be looking to buy it down around here, with a SL placed below 112.70, a break of which could bring about a sharper fall towards the 100 DMA at around 112.25. Note that the monthly cloud top is rising sharply and currently lies at 111.30, but in the next 2 months will climb to 112.75 and then to 114.20 (Sept). We have not had a monthly close below the cloud top since Oct 2013.

On the topside, the daily charts remain positive and if we can take out 114.00/20 we look likely to see a move towards 114.35 and beyond there, there is little to stand in the way of an attack on 115.00 and eventually higher.

Resistance Support
115.19 14 Mar high 113.65 Minor
114.88 15 Mar high 113.50 Minor
114.50 Minor 113.09 Friday low
114.35 10 May high 112.90 (23.6% of 108.80/114.17)
114.17 Friday high 112.73 4 July low

Economic data highlights will include:

M:  Current Account, Machinery Orders (May), Eco Watchers Survey (June)

T:

W: Tertiary Industry Index (May)

T:  Weekly Foreign Bond/Stocks Investment

F:



GBPUSD: 1.2885
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: Cable fell sharply on Friday  after the release of the worse than expected UK data which saw the May industrial, manufacturing & construction output numbers all fail to reach expectations.

The momentum indicators are mixed, with the short term charts telling us little, although the 4 hour charts could be hinting at further losses ahead.  If so, below the Fibo level at 1.2860 would find little support ahead of 1.2810, and a break of 1.2790 could have us quickly back at 1.2750.

Note that Trump was making noises last week about a US/UK trade pact, and although no more has yet been forthcoming on that, if correct, it would encourage a bounce in Sterling. In the meantime, on the topside, sellers will be seen at 1.2935 and then again at 1.2985/1.3000 ahead of the trend high of 1.3047. Beyond there would take a look at the long term triangle top at 1.3060, which should be strong resistance if we see it. If 1.3060 is taken out look for an acceleration towards 1.3120 and then possibly on towards 1.3300.

For the time being a neutral stance is required, but the triangle formation seems set to remain intact and possibly, selling rallies is mildly favoured.

Resistance Support
1.3000 Pivot 1.2866/60 Friday low/(38.2% of 1.2588/1.3029)
1.2983 6 July high 1.2830 Minor
1.2965 Minor 1.2810 (50% of 1.2588/1.3029)
1.2935 200 HMA 1.2793 28 June low
1.2900 Minor 1.2755 (61.8% of 1.2588/1.3029)

Economic data highlights will include:

M:  UK Like-for-Like Retail Sales

T:  Inflation Report Hearing

W: Unemployment (May), Claimant Count (June)

T:  BOE Credit Conditions Survey

F:



USDCHF: 0.9640
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: US$Chf trade a relatively tight 0.9590/0.9653 range on Friday leaving the outlook more of less unchanged. I am neutral for Monday. Possibly looking to buy dips in the 0.9590/0.9600 area, with a SL sub the 200 WMA, but looking for a run towards 0.9700.

The short term momentum indicators are neutral, and good support lies at 0.9590/ 0.9600. If this is taken out though there is not too much to hold it up until 0.9550, where the 200 WMA has done a good job of propping the dollar up over the last couple of weeks. Below there would be a longer term concern for the dollar and could see a run back to previous, 2016 lows at 0.9520/30, to 0.9500, and potentially a fair bit lower.

On the topside, decent resistance still lies in the band between 0.9660/85, above which could take us on to 0.9700 and then to 0.9745 although I don’t see it up here today.

Resistance Support
0.9745 Descending trend resistance 0.9620 Minor
0.9700 Minor 0.9591 Friday low
0.9680/87 (23.6% of 1.0099/0.9555)/5 July high 0.9555/52 3 July low/29 June low /200 WMA
0.9660 6 July high 0.9535 18 Aug  2016 low
0.9653 Friday high 0.9521 23 June 2016 low


AUDUSD: 0.7603
24 Hour Outlook: Mildly Bullish – Prefer to sell rallies Medium Term: Neutral –Turning slightly bearish
Preferred 24-hour Strategy: The Aud did bounce from its 0.7570 low on Friday to close back at 0.7600 although the price action does seem rather unimpressive and I still prefer to sell rallies.

The 4 hour indicators do look mildly positive though, and on the topside resistance will be seen at Friday’s high of 0.7622 and again at 0.7630 ahead of 0.7650. Selling into any strength with a SL, today placed above 0.7665, could be the plan. .

In the longer term, further downside momentum still looks quite possible, and with the daily indicators looking heavy, a return to 0.7570 at some stage would not surprise. If 0.7565/70 is taken out, we may then be in for a move towards 0.7540 and possibly to 0.7520 – not today though.

Resistance Support
0.7700 Pivot 0.7585 Minor
0.7685 Minor 0.7571/70 Friday low /5 July low
0.7650 Minor 0.7565 (38.2% of 0.7328/0.7710)
0.7631 5 July high 0.7540 (50% pivot of 0.7373/0.7710)
0.7622 Friday high 0.7520 (50% pivot of 0.7328/0.7710)

Economic data highlights will include:

M:  China CPI, PPI (June)

T:  Investment Lending for Homes, Home Loans (May), NAB Business Conditions/Confidence (June)

W: WBC Consumer Confidence   (July), China Foreign Direct Investment, New Loans (June)

T:  China Trade Balance (June)

F:


NZDUSD: 0.7279
24 Hour Outlook: Neutral Medium Term: Neutral –Turning lower?
Preferred 24-hour Strategy: A neutral stance is required while the Kiwi remains near the 0.7300 pivot. The price action has been very choppy recently and so is best left alone I think.

The Kiwi still seems to be building a topping formation and as before, I prefer to sell rallies towards/above 0.7300, with a SL placed above 0.7350. There are better things to trade right now.

                                         Resistance             Support
0.7402 8 Nov high 0.7260 Friday low
0.7360 Minor 0.7243 6 July low
0.7344/45 3 July high/29 June high 0.7235 Minor
0.7325 Minor 0.7220 (23.6% of 0.6816/0.7343)
0.7309 Friday high 0.7193 22 June low