10 Oct: Forecast: FX: US$/Majors + Trade Ideas

By | October 10, 2017


EURUSD: 1.1740
Preferred Strategy:  It is all rather neutral at the start of Tuesday trade so a nimble stance is required. The dailies do still point lower although they need to see some directional move soon as they will otherwise run out of steam and then further choppy trade could be in store. Given the lack of data today, it could be another rangebound session while waiting on tomorrow’s FOMC Minutes. After that it will be a pretty lean data calendar until Friday’s CPI and Retail Sales reports, which will again be viewed through the hurricane effected conditions. No trade today.
24 Hour: Neutral Medium Term: Mildly Bearish  – Prefer to sell rallies
Resistance Support
1.1830 (38.2% of 1.2092/1.1669) 1.1718 Session low
1.1800 Descending trend resistance 1.1700 Minor
1.1785 4 Oct high 1.1669 6 Oct low
1.1770 Minor 1.1661 17 Aug low
1.1755 200 HMA /Session high 1.1612 26 July low

Economic data highlights will include:

German Trade Balance, Current Account, API Weekly Crude Oil Stock Inventory

USDJPY: 112.66
Preferred Strategy:  The dollar remains rangebound within 112.32/112.74 today and similar conditions appear set to continue. As before, I think the dollar will eventually head higher, so buying dips is preferred although for the time being 112.00/113.00 looks set to cover it gain.
24 Hour: Neutral Medium Term: Mildly Bullish – Prefer to buy dips
Resistance Support
113.55 Minor 112.40 Minor
113.43 6 Oct high 112.32 4 Oct low/29 Sept low /Session low
113.20 Minor 112.20 27 Sept low
113.00 Minor 112.00 (23.6% of 107.31/113.43)
112.74 Session high 111.80 Minor

Economic data highlights will include:

Trade Balance, Current Account

GBPUSD: 1.3141
Preferred Strategy:  Cable has bounced from the 1.3075 low after the announcement that the inflation data had been underestimated, potentially bringing about a BOE rate hike in November. It has been up to 1.3183 and currently sits at 1.3150, and with the 4 hour charts looking positive, a retest of the highs would not surprise. The dailies though still point strongly lower so selling into strength would seem the medium term plan. Sell GbpUsd @ 1.3190. SL @ 1.3230, TP @ 1.3050.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
1.3174 (23.6% of 1.3656/1.3026) 1.3120 Minor
1.3145 Minor 1.3100 Minor
1.3120 6 Oct high 1.3075 Session low
1.3100 Minor 1.3050 Minor
1.3080 Minor 1.3010 100 DMA

Economic data highlights will include:

Manufacturing/Industrial Production, Trade Balance, Industrial Production, NIESR GDP Estimate

USDCHF: 0.9796
Preferred Strategy:  US$Chf has had a choppy session (0.9773/0.9807) and something similar looks to be in store today, as long as the rising trend support at 0.9765 holds. Under there could trigger some stops and  could see an extended dip although in the medium term I still like the dollar higher, eventually looking for a run towards parity. A close above the 200-DMA (0.9850) would help extend the uptrend.

Buy US$Chf @ 0.9750. SL @ 0.9690, TP @ 0.9850.

24 Hour: Prefer to buy dips Medium Term: Mildly Bullish
Resistance Support
0.9900 Minor 0.9774 Session low
0.9880 (50% of 1.0343/0.9420) 0.9765 Rising trend support
0.9850 200 WMA 0.9735 5 Oct low/200 HMA
0.9835 200 DMA/(61.8% of 1.0099/0.9420) /6 Oct high 0.9710 4 Oct low
0.9807 Session high 0.9676 2 Oct low

Economic data highlights will include:


AUDUSD: 0.7752
Preferred Strategy:  The Aud remains heavy, albeit in a tight range on Monday of 0.7747/81. Something similar looks in store today, with the NAB Business Conditions/Confidence being the only real focus. The short term momentum indicators are neutral, but with the dailies still pointing lower, selling rallies still appears to be the plan. Sell AudUsd @ 0.7780. SL @ 0.7820, TP @ 0.7765 (200 DMA).
24 Hour: Mildly Bearish Medium Term: Mildly Bearish
Resistance Support
0.7850 Minor 0.7747 Session low
0.7830 200 HMA 0.7732 6 Oct low
0.7815 Descending trend resistance/(23.6% of 0.8102/0.7732) 0.7725 (50% pivot of 0.7328/0.8125)
0.7800 Minor 0.7700 Minor
0.7781 Session high 0.7680 Minor

Economic data highlights will include:

NAB Business Conditions/Confidence, China Money Supply, New Loans

NZDUSD: 0.7063
Preferred Strategy:  The Kiwi remains heavy and the dailies look as though there is further downside to come, so as with yesterday, selling into strength seems to be the pan.  There is little to recommend buying the Kiwi until the political uncertainty quashed and until that occurs (Thur?) it is likely to remain under pressure. Sell NzdUsd @ 0.7100. SL @ 0.7140, TP @ 0.7015.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
0.7180 Minor 0.7058 6 Oct low /Session low
0.7165 5 Oct high 0.7050 Minor
0.7145 (23.6% of 0.7434/0.7058) 0.7035 Minor
0.7118 6 Oct high 0.7010 Minor
0.7100 Minor 0.6990 (76.4% of 0.6817/0.7528)

Economic data highlights will include:

Electronic Card Retail Sales