11 July: Forecast: FX: US$/Majors

By | July 11, 2017

 

EURUSD: 1.1397
24 Hour Outlook: Prefer to sell rallies  – tight SL Medium Term: Possibly prefer to buy dips.
Preferred 24-hour Strategy:  The short term momentum indicators are neutral, and another sideways session would not surprise given the lack of data today, ahead of Janet Yellen, tomorrow. The dailies are also not telling us a lot so once again, selling rallies with a tight SL above the 1.1445/55 resistance seems to be the short-term plan. Longer term players may continue to look to buy dips. For today a range trade seems in store. Use 1.1370/1.1440 as a guide.

Minor support lies at the 7 July/session low of 1.1380 and then at 1.1350/55, 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 7 July 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
1.1500 Minor 1.1379/81 7 July low /Session low
1.1480 Minor 1.1355 Minor
1.1445 Descending trend resistance/29 June high/29 June high 1.1320 (38.2% of 1.1117/1.1445)
1.1439 7 July high 1.1311 5 July low
1.1417 Session high 1.1285 (50% of 1.1117/1.1445)

Economic data highlights will include:

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



USDJPY: 114.06
24 Hour Outlook: Prefer to buy dips Medium Term: Mildly Bullish
Preferred 24-hour Strategy:  While the short term momentum indicators suggest that we may see some profit taking on existing short Yen positions, the longer term charts remain constructive for the dollar, so looking to buy dips is still favoured.

The short term momentum indicators look a bit heavy on Tuesday and we may see a near term drift lower, back towards the session low of 113.85, possibly to 113.50 and even to 7 July’s low at 113.09.  If so I would be looking to buy the dips, with a SL placed below 113.00, A break of 112.70 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 the resistance seen at 114.30/35, there is little to stand in the way of an attack on 115.00 and eventually higher. I think we will get there, albeit possibly not today. – Post Janet Yellen? Maybe.

Resistance Support
115.19 14 Mar high 113.85 Session low
114.88 15 Mar high 113.65 Minor
114.50 Minor 113.50 Minor
114.35 10 May high 113.09/00 7 July low /(23.6% of 108.80/114.29)
114.29 Session high 112.73 4 July low


GBPUSD: 1.2879
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy:  The momentum indicators are generally fairly flat, and a neutral stance is wise. Overall, Brexit talks and weak wages/growth remain a risk to any future UK rate hike and will probably see Cable underperform, particularly against the Euro, in the sessions to come.

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/session low (1.2853) would find little support ahead of 1.2810, and a break of 1.2790 could have us quickly back at 1.2750.

On the topside, sellers will be seen at the 1.2907 session high, 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. Today’s Inflation Report Hearing and BOE speakers may create some waves.

Resistance Support
1.3000 Pivot 1.2853 Session low
1.2983 6 July high 1.2830 Minor
1.2965 Minor 1.2810 (50% of 1.2588/1.3029)
1.2940 200 HMA 1.2793 28 June low
1.2907 Session high 1.2755 (61.8% of 1.2588/1.3029)

Economic data highlights will include:

Inflation Report Hearing, BOE Broadbent Speech



USDCHF: 0.9657
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy:  Neutral

The short term momentum indicators are neutral, and below Monday’s low of 0.9630, 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 0.9670/85, 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 0.9629 Session low
0.9725 Minor 0.9591 7 July low
0.9700 Minor 0.9555/52 3 July low/29 June low /200 WMA
0.9680/87 (23.6% of 1.0099/0.9555)/5 July high 0.9535 18 Aug  2016 low
0.9674 Session high 0.9521 23 June 2016 low


AUDUSD: 0.7606
24 Hour Outlook: Mildly Bullish – Prefer to sell rallies Medium Term: Neutral –Turning slightly bearish
Preferred 24-hour Strategy:  The Aud has traded another choppy session, using 0.7600 as a pivot on Monday, and a similar day may lie ahead although the NAB Business Conditions/Confidence and Home Loans data may give us something more directional.

The 4 hour momentum indicators still look mildly positive, and on the topside resistance will be seen at the session high of 0.7614 ahead of the 7 July’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 the session low of 0.7585 and eventually to 0.7570 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.

Resistance Support
0.7685 Minor 0.7585 Session low
0.7650 Minor 0.7571/70 7 July low /5 July low
0.7631 5 July high 0.7565 (38.2% of 0.7328/0.7710)
0.7622 7 July high 0.7540 (50% pivot of 0.7373/0.7710)
0.7614 Session high 0.7520 (50% pivot of 0.7328/0.7710)

Economic data highlights will include:                                                                                     

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



NZDUSD: 0.7274
24 Hour Outlook: Neutral Medium Term: Neutral –Turning lower?
Preferred 24-hour Strategy:  The Kiwi remains at 0.7275 and a neutral stance seems wise. As before selling rallies is mildly preferred, although not convinced.

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. Electronic Card Retail Sales coming up.

                                         Resistance             Support
0.7360 Minor 0.7260/61 7 July low  /Session low
0.7344/45 3 July high/29 June high 0.7243 6 July low
0.7325 Minor 0.7235 Minor
0.7309 7 July high 0.7220 (23.6% of 0.6816/0.7343)
0.7282 Session high 0.7193 22 June low

Economic data highlights will include:

Electronic Card Retail Sales (June)