11 May: Forecast: FX: US$/Majors

By | May 11, 2017

 

EURUSD: 1.0866

EurUsd has traded a tight 1.0852/99 range on Wednesday, leaving the outlook unchanged.

The 4 hour/daily momentum indicators still both look negative and suggest that we are going to see further downside pressure in the days ahead. If so, once back below 1.0850, the 200 DMA (1.0825) will provide some support although below there would potentially allow the chart gap to close, which would take the Euro all the way back to 1.0730. On the topside, resistance will be seen at 1.0900 and then at the 9 May high of 1.0932 although I am not sure that we see it up here again today. If wrong, we could then see a move back towards 1.1000 and Monday’s high of 1.1020, a break of which would see little resistance until the channel top at 1.1055 and then the Fibo level at 1.1070. The preference is to trade from the short side and to sell into rallies, with a SL placed above 1.0935.

24 Hour: Prefer to sell rallies Medium Term: Prefer to sell rallies
                                          Resistance Support
1.1020 8 May high 1.0851/52 (38.2% of 1.0570/1.1020) /26 Apr low /Session low
1.1000 Psychological 1.0825/20 200 DMA /24 Apr low
1.0950 Minor 1.0795 (50% of 1.0570/1.1020)
1.0932 9 May high 1.0775 20 Apr high
1.0897 Session high 1.0740 (61.8% of 1.0570/1.1020)

Economic data highlights will include:

EU Economic Bulletin, US PPI, Jobless Claims


USDJPY: 114.27

US$Jpy remains well bid after a choppy day’s trade either side of 114.00.

With the daily momentum indicators pointing sharply higher, further gains would seem possible although the 4 hour charts are flirting in overbought territory so some caution is warranted but buying dips remains the preferred strategy. Above the 114.36 high would find little meaningful resistance until we hit 115.20 and the previous trend high of 115.50 although I don’t think we are going there in a hurry and we may need to wait for the US Retail Sales & CPI on Friday for the chance to push on to this level.

On the downside, back below the session low, support would be seen at the100 DMA and the 100 WMA although there is little else to be seen until we reach 112.80. For the time being buying dips seems to be the plan, with a SL placed below 112.80

24 Hour: Prefer to buy dips Medium Term: Mildly bullish – Prefer to buy dips.
                                         Resistance Support
115.50 10 Mar high 113.80 Minor
115.20 14 Mar high 113.62 Session low
114.90 Minor 113.25 100 WMA
114.50 Minor 113.05 100 DMA
114.36 Session high 112.82 (23.6% of 108.12/114.32)

Economic data highlights will include:

Foreign Bond/Stocks Investment, Trade Balance, Eco Watchers Survey 


GBPUSD: 1.2938

Once again, Cable is ending the day pretty much near flat after a range of 1.2926/87, where we now have a minor double top , capped by the 55 WMA, and leaving the outlook unchanged. The momentum indicators remain neutral today and a cautious stance is required while waiting on the outcome of today’s BOE Meeting and MPC vote count.

No change is expected but a hawkish outlook could allow a break of the double top (1.2988)  and could trigger the move to 1.3000 – last seen in September – beyond which would open the way to decent resistance levels seen at each of 1.3020, 1.3035 and to 1.3060, and then further out to where the longer descending term trend resistance currently lies at around 1.3135.

On the downside, back below the 9 May low of 1.2900, the initial support lies at 1.2880/70, a break of which could signal a return to 1.2830 (4 May low) and possibly to 1.2800/10.

 24 Hour: Range trade Medium Term:  Prefer to buy dips
                                         Resistance           Support
1.3120 Descending trend resistance/22 Sept high 1.2926 Session low
1.3060 (76.4% of 1.3445/1.1821) 1.2902 9 May low
1.3035/30 (38.2% of 1.5018/1.1821) Weekly cloud base 1.2860 Minor
1.3020 Weekly cloud base 1.2830 4 May low
1.2985/88 55 WMA /8 May high/Session high 1.2805 26 Apr low

Economic data highlights will include:

Manufacturing/Industrial Production, BOE Interest Rate Decision/Monetary Policy Statement/Quarterly Inflation Report/BOE Minutes


USDCHF: 1.0089

Following the steep rise of each of the previous two sessions US$Chf has traded a tight 1.0047/95 range but is finishing towards the highs and looks as though it could have further gains ahead in coming days.

The 4 hour/daily momentum indicators both look constructive, and if we get above 1.0095 and then 1.0107 (10 Apr high) there is then not too much to stop the dollar heading on to 1.1070 and then towards 1.0250.  On the downside, the initial support will arrive at 1.0140/45 and then again at parity, ahead of further minor Fibo levels at 0.9975 and 0.9950. Buying dips still seems to be the plan, with a SL not placed below 1.0000.

24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
                                         Resistance Support
1.0200 Minor 1.0138 (23.6% of 0.9858/1.0195)
1.0170 7 Mar high 1.0000 (38.2% of 0.9858/1.0190)
1.0140 Minor 0.9975 (50% of 0.9858/1.0190)
1.0107 10 Apr high 0.9950/45 100 DMA /(61.8% of 0.9858/1.0190)
1.0094/85 Session high/(76.4% of 1.0170/0.9813) 0.9910 (76.4% of 0.9858/1.0190)

Economic data highlights will include:

Unemployment


AUDUSD: 0.7350

AudUsd squeezed slowly higher through much of the session, reaching 0.7394 in NY before turning lower as the US$ picked up a generally bid tone, sending the Aud back to 0.7365 where the pair is ending the day. The RBNZ have just left rates unchanged in early NZ trade but the Kiwi has nose-dived by 100bp, taking the Aud$ along for the ride although it is currently holding on above yesterday’s trend low of 0.7328.

Technically, the short term momentum indicators still look mixed, with the 4 hour charts suggesting that we could see another squeeze to the topside, which, if correct would find offers at 0.7380 and at 0.7395/00. Beyond 0.7400 would allow a move back towards 0.7415 and possibly to 0.7425.

On the other hand, the dailies are pointing increasingly lower, suggesting any short term strength should be sold into. Back below the Tuesday low of 0.7328 would find little to hold the Aud up until 0.7300 and the rising trend support, at 0.7285, although this seems unlikely to be seen today. If wrong, a break of 0.7285 would see little support until 0.7160, so worth watching. Being short is still preferred, looking for a near term rally to sell into, with a SL placed above 0.7425. Today could be one of consolidation though and 0.7330/0.7400 may once again cover it.

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
                                         Resistance                                         Support
0.7435 200 HMA 0.7340 Minor
0.7425 5 May high/8 May high 0.7330/28 (50% pivot of 0..6826/0.7835)/ 9 May low
0.7415 (35.2% of 0.7555/0.7328) 0.7298 (76.4% of 0.7160/0.7750)
0.7394 Session high 0.7285 Rising trend support
0.7380 (23.6% of 0.7555/0.7328) 0.7260 Minor

Economic data highlights will include:

Consumer Inflation Expectation


NZDUSD: 0.6850

The RBNZ just left rates unchanged, as expected. For some reason the Kiwi decided it did not like that, and a knee jerk move has seen it fall a big figure  (low 0.6833)– no idea why at this stage apart from the statement which said that policy will remain accommodative for some time to come and that the fall in the NZ TWI is encouraging.

The Kiwi has had a mostly solid session on Wednesday, in rising from the day’s lows of 0.6888 to a high of 0.6950, before settling at 0.6940 with traders now waiting on the RBNZ decision due in the next couple of hours – no change expected.

The momentum indicators still look mixed so further choppy trade near current levels would not really surprise although the dailies do seem to be picking up a mildly bid tone. If the Kiwi does head higher, look for targets at 0.6950 and then at 0.6970, beyond which could then see a run back to 0.7000 and which should be decent resistance.

On the downside, back under 0.6900, support will be seen at 0.6880/90 and then again at 0.6860. Further out, below the 4 May low of 0.6838 would find Fibo support at around 0.6805, and below that would then allow a move to 0.6780 and eventually lower. Eventually I think we are going back to the 27 May 2015 low of 0.6675.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
0.7015 Minor 0.6900 Minor
0.7000 (76.4% of 0.6868/0.6838) 0.6880 9 May low
0.6980 Minor 0.6860 5 May low
0.6970/68 (61.8% of 0.6868/0.6838) /3 May High 0.6838 4 May low
0.6950 Session high 0.6803 (50% pivot of 0.6347/0.7485)

Economic data highlights will include:

T:  RBNZ Interest Rate Decision. Press Conference, Monetary Policy Statement, Food Price Index