12 July: Forecast: FX: US$/Majors

By | July 12, 2017

 

EURUSD: 1.1463
24 Hour Outlook: Prefer to buy dips Medium Term: Prefer to buy dips.
Preferred 24-hour Strategy:  Ahead of Janet Yellen’s testimony I prefer to be neutral but the short term momentum indicators are beginning to point higher, aligning with the dailies, so looking for levels to trade from the long side does now appear to be the plan

The Euro has squeezed up to 1.1479 on Tuesday, taking out the descending trend resistance to make a new 14 month high, and further gains now seem possible with minor resistance only, to stop the Euro from heading to the May 2016 high of 1.1616.

On the downside, minor support now lies at 1.1445/55, below which we could then head back to 1.1400 and to the 7 July/10 July/session lows of 1.1378/80.  Below here looks unlikely today but further losses would run towards 1.1350/55, below which could see a return to 1.1320/30 and possibly to 1300/10.

For the time being, buying dips remains the plan although I do remain cautious as US$Chf remains well supported above its late June lows, not really backing up the move in the EurUsd at this stage…partly due to the SNB’s less hawkish stance than the ECB though.

Resistance Support
1.1616 2 May 16 high 1.1445 Minor
1.1580 Minor 1.1395 (23.6% of 1.1117/1.1479) /200 HMA
1.1535 Minor 1.1379/81/78 7 July low /10 July low  /Session low
1.1500 Minor 1.1355 Minor
1.1479 Session high 1.1320 (38.2% of 1.1117/1.1479)

Economic data highlights will include:

EU Industrial Production, Janet Yellen testifies to Congress, EIA Crude Oil Stocks Weekly Change, Beige Book  



USDJPY: 113.91
24 Hour Outlook: Prefer to sell rallies Medium Term: Mildly Bullish
Preferred 24-hour Strategy:  While the dailies still point higher, the short term momentum indicators are looking increasingly heavy, and as with yesterday’s short-term trade suggestion in the trend table, selling into near term strength, with a SL placed above 114.55 remains the plan.

The short term momentum indicators again look heavy on Wednesday and we may see a near term move lower, back towards the session low of 113.71, 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 the session high of 114.49, 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.

Resistance Support
115.19 14 Mar high 113.85 Minor
114.88 15 Mar high 113.71 Session low
114.49 Session high 113.50 Minor
114.35 Minor 113.09/00 7 July low /(23.6% of 108.80/114.29)
114.15 Minor 112.73 4 July low

Economic data highlights will include:

Tertiary Industry Index (May)



GBPUSD: 1.2848
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy:  Cable remains offered after the BOE’s Broadbent was less hawkish than hoped, making no comment on interest rates, and is finishing near the session lows. Further losses look possible, but the price action is choppy so I prefer to stand aside. Buying EurGbp may be a better trade given the slightly more positive outlook for the Euro.

The momentum indicators for both the 1 hour and  the 4 hour charts could be hinting at further losses ahead, and below the session low of 1.2830 would find little support ahead of 1.2810 (Fibo). A break of 1.2790 could have us quickly back at 1.2750.

On the topside, minor sellers will be seen at 1.2880/1.2900 ahead of the 1.2926 session high, at 1.2935 and then again at 1.2985/1.3000 ahead of the trend high of 1.3047.

For the time being a neutral stance is required, but the triangle formation seems set to dominate the price action, and selling rallies is mildly favoured. Today’s UK Unemployment report may create some waves.

Resistance Support
1.2983 6 July high 1.2830 Session low
1.2936 200 HMA 1.2810 (50% of 1.2588/1.3029)
1.2926 Session high 1.2793 28 June low
1.2900 Minor 1.2770 Minor
1.2880 Minor 1.2755 (61.8% of 1.2588/1.3029)

Economic data highlights will include:

Unemployment (May), Claimant Count (June)



USDCHF: 0.9638
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy:  While the Euro is making headway against the US$, the US$Chf remains in a choppy, rangebound pattern and looks likely to remain so for now. Neutral.

The short term momentum indicators are pointing mildly lower, and below today’s low of 0.9623, good support lies at 0.9590/ 0.9600 although 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.  More choppy trade looks likely.

Resistance Support
0.9745 Descending trend resistance 0.9623 Session low
0.9725 Minor 0.9591 7 July low
0.9695 Session high 0.9555/52 3 July low/29 June low /200 WMA
0.9680 (23.6% of 1.0099/0.9555) 0.9535 18 Aug  2016 low
0.9660 Minor 0.9521 23 June 2016 low


AUDUSD: 0.7637
24 Hour Outlook: Mildly Bullish – Prefer to sell rallies Medium Term: Neutral –Turning slightly bearish
Preferred 24-hour Strategy:  The Aud was able to benefit from the combination of Brainard’s comments and from Trump’s emails and is finishing towards the session highs of 0.7641. The short term momentum indicators suggest at further near term gains although the dailies look less certain, so selling rallies currently remains preferred from a structural point of view. The WBC Consumer Confidence may produce some minor directional movement today..

The 1/4 hour momentum indicators still look mildly positive, and on the topside resistance will be seen at the session high of 0.7641 ahead of 0.7650.  Beyond here would allow a run towards 0.7680 and even back to 0.7710 although I doubt that we see it up here today.

In the longer term, further downside momentum still looks quite possible, and with the daily indicators still looking a little heavy, a return to the session low of 0.7602, the 10 July 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.

Either buying here, for the day trade, or selling into any strength (for structural trade) with a SL, today placed above 0.7680, could be the plan.

Resistance Support
0.7711 30 June high 0.7620 200 HMA
0.7680 Minor 0.7602 Session low
0.7665 Minor 0.7585 10 July low
0.7650 Minor 0.7571/70 7 July low /5 July low
0.7641 Session high 0.7565 (38.2% of 0.7328/0.7710)

Economic data highlights will include:                                                                                     

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



NZDUSD: 0.7227
24 Hour Outlook: Prefer to sell rallies Medium Term: Neutral –Turning lower?
Preferred 24-hour Strategy:  The Kiwi never recovered from yesterday’s soft Retail Sales data and traded down to 0.7201. Selling rallies is still preferred as I think that lower levels lie ahead, albeit that the short term momentum indicators are currently trying to squeeze a little higher so we me see better levels to do so..

The Kiwi seems to have completed it topping formation, and as before, I prefer to sell rallies, now at around 0.7250, with a SL placed above 0.7300. On the downside, below 0.7200, 0.7170/90 will provide minor support but below that could accelerate towards 0.7145 and eventually to 0.7080.

                                         Resistance             Support
0.7344/45 3 July high/29 June high 0.7201 Session low
0.7325 Minor 0.7193 22 June low
0.7309 7 July high 0.7170 12 June low
0.7282 10 July high 0.7143 (38.2% of 0.6817/0.7345)
0.7250 Minor 0.7115 Minor