10 Nov: Forecast: FX: US$/Majors + trade ideas

By | November 10, 2017

 

EURUSD: 1.1641
Preferred Strategy:  EurUsd has had very choppy Thursday, impacted by rumours of a delay to the US tax bill and by volatility in the bond market, but at the end of the day has finished just below session highs of 1.1650, still below the head/shoulder neckline.

Some caution is warranted by those who are short the Euro as the momentum indicators, including the dailies, seems to be turning to point higher. As before though, as long as the Euro holds below 1.1675 on a daily-close basis, shorts can be maintained but with a tight SL above here. A topside break of 1.1675 would trigger stops and could see a run back to 1.1700 where the 100 DMA will provide stern resistance, but above there could see a bigger squeeze towards the descending trend resistance at 1.1780.

On the downside, minor support will today be seen at 1.1620 and again at the recent lows at around 1.1580/85, where the rising trend support also lies. Below there, the trend low at 1.1553 and the Fibo level at 1.1510 will come into play although probably not today.

Right now the upside looks to be the path of least resistance, but I would still look to sell into strength, with a SL placed tight above the 1.1700 area. The weeklies still point lower but any tax-bill headlines should be watched closely, and a confirmation of any delay would have quite an impact on markets, possibly sending the dollar sharply lower. Keep SL tight on any short positions!

Sell EurUsd @ 1.1675 & @ 1.1700. SL @ 1.1730, TP @ 1.1500.

24 Hour: Mildly Bullish – Prefer to sell rallies Medium Term: Mildly Bearish
FX Charts Position: Short  – Looking  to add to the position into strength
Resistance Support
1.1715 Minor 1.1620 200 HMA
1.1700 Minor 1.1585 Session low
1.1686/90 3 Nov high /(38.2% of 1.1879/1.1574) 1.1578 Rising trend support
1.1675 H.S. Neckline 1.1553 7 Nov low
1.1654 Session high 1.1510 (38.2% of 1.0570/1.2091)

Economic data highlights will include:

US Holiday Observed (Veterans Day – Saturday), Michigan Consumer Sentiment Index



USDJPY: 113.37
Preferred Strategy:  US$Jpy is heavy today, having been down to 113.08, with the charts hinting that further downside may lie ahead as we head into the weekend. If so, on the downside, support will be seen at 112.95/00, below which there is only minor support to be seen ahead of the mid October low at 112.30 although I don’t think we head this far today.

On the topside, minor resistance now lies at 113.50 and 113.80, ahead of 114.00 and the session high of 114.06. Above here, unlikely today, could return to 114.35/45 and beyond, towards the 114.73, 6th Nov high, but above which could see a test of the descending trend resistance, currently at around 114.90. A break of 115.00 would then see little resistance until 115.20 and then 115.50.

I remain fairly neutral, although I still like the dollar in the medium term and prefer to buy dips although right now does seem too early to do so.

24 Hour: Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
114.73 6 Nov high 113.08 Session low
114.33 7 Nov high 112.95 31 Oct low/(23.6% of 107.31/114.73)
114.06 Session high 112.70 Minor
113.80 200 HMA 112.50 Minor
113.50 Minor 112.30 19 Oct low


GBPUSD: 1.3148
Preferred Strategy: Sterling has had another choppy session, weighed down by the usual Brexit/Political problems in the UK, but is, so far, holding on to the important rising trend support.

The momentum indicators remain in neutral, so a cautious stance is required and further choppy trade near current levels would not really surprise although a break of the session/8 Nov low of 1.3085 would then allow a move to the previous lows at around 1.3030 and then to 1.3000.

On the topside, minor resistance will be seen here, at 1.3150 (200 HMA), and again at 1.3175. Above here looks unlikely, but if wrong, look for a move back to 1.3200+, possibly towards 1.3225/50.

Watch out today for the Manufacturing/Industrial Production and the Goods Trade Balance which will produce some volatility.

24 Hour: Neutral Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
1.3250 (76.4% of 1.3320/1.3042) 1.3125 200 HMA
1.3235 Minor 1.3085/80 Session low /8 Nov low/100 DMA
1.3215 (61.8% of 1.3320/1.3042) 1.3060 Rising trend support
1.3175/80 8 Nov high /(50% of 1.3320/1.3042) 1.3026 6 Oct low
1.3165 Session high 1.1.2995 (61.8% of 1.2588/1.3656)

Economic data highlights will include:

UK Goods Trade Balance, Manufacturing/Industrial Production



USDCHF: 0.9941
Preferred Strategy: US$Chf had a choppy session, heading up to 1.0017 before reversing sharply in volatile trade, to reach a low of 0.9921 and then finishing near 0.9940.

The short-term momentum indicators are neutral, while the dailies are looking slightly heavy and may signal a further decline towards 0.9890/9900, and then possibly to 0.9865 over the coming days although I don’t think we head back here today.

With the weekly momentum indicators generally looking positive though, further dollar strength could be in store down the track and if we can take out 1.0015/25, we could then head on to take another look at 1.0035/40. Above this there is little to hold the dollar up ahead of 1.0100, and beyond that to 1.1025 and 1.0170.

For now, look for the dollar to chop around current levels and possibly to head a little lower, but with the view of buying dips for an eventual move towards 1.1000+.

Buy US$Chf @ 0.9895. SL @ 0.9895, TP @ 1.0085.

24 Hour: Mildly Bearish – Prefer to buy dips Medium Term: Prefer to buy dips
FX Charts Position: Long – Looking to add on dips.
Resistance Support
1.0036/37 27 Oct high /1 Nov high 0.9921 Session low
1.0028 6 Nov high 0.9900 Rising trend support
1.0017 Session high 0.9890 (23.6% of 0.9420/1.0037)
0.9990 200 HMA 0.9868 25 Oct low
0.9970 Minor 0.9850 Minor


AUDUSD: 0.7680
Preferred Strategy: The Aud has had a tight session (0.7650/93), leaving the technical outlook unchanged but with the Statement on Monetary Policy coming up we could get a directional move.

While the short term momentum indicators are neutral, the dailies appear to be turning a little more positive, suggesting that we could be in for a possible squeeze towards 0.7700, above which could see a run towards 0.7730/40.

The weekly charts still look heavy though so selling into strength remains the overall plan. Near term support arrives at 0.7650 and again at the strong level of 0.7625. An eventual break of 0.7625 would bring fresh selling which could then see a run towards 0.7600 and eventually to 0.7570. Overall, with the longer term charts looking heavy, I suspect the Aud$ is building a bear flag (see daily chart) and is biding its time ahead of a more sustained test of 0.7625/30, which could then take us to 0.7570 and eventually towards 0.7400, but patience will be required and we look likely to see better levels to sell it than we are currently trading at.

24 Hour: Neutral  – Prefer to sell rallies Medium Term: Neutral –Mildly Bearish
FX Charts Position:   
Resistance Support
0.7738 Descending trend resistance 0.7670 200 HMA
0.7729 2 Nov high 0.7650 Session low
0.7715 Minor 0.7624 27 Oct low
0.7700 200 DMA/7 Nov high 0.7600 Minor
0.7693 Session high 0.7585 Minor

Economic data highlights will include:

RBA Monetary Policy Statement, China New Loans



NZDUSD: 0.6953
Preferred Strategy: The Kiwi is slowly squeezing higher, making a series of higher highs/lows and this trend looks as though it could continue although the descending trend resistance at 0.6985 will prove a hurdle. Above this could see a run to 0.7000 and above, although at this stage I doubt we see it much above 0.7000 today unless the US$ comes under some pressure of its own.

On the downside, minor support now lies at 0.6930 ahead of 0.6900. A move back below 0.6890 could see a retest of 0.6875, below which could then see a return to 0.6850. Under there would find strong support at 0.6830 and again at 0.6817, where we have the double bottom with the May low. Below that though would then find that there is little support ahead of 0.6670 although I don’t think we head anywhere close for the time being.

Overall, with the longer term (weekly) charts looking heavy, I suspect the Kiwi is currently biding its time ahead of a more sustained test of the recent lows but patience will be required and we look likely to see better levels to sell it than we are currently trading at.

24 Hour: Mildly bullish Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
0.7035 20 Oct high 0.6932 Session low
0.7004 24 Oct high 0.6890 7 Nov low
0.6985 Descending trend resistance 0.6873 6 Nov low
0.6979 Session high 0.6832/30 30 Oct low /31 Oct low
0.6965 Minor 0.6817 11 May low/27 Oct low

Economic data highlights will include:

Electronic Card Retail Sales