13 Dec: Forecast: FX: US$/Majors + trade ideas

By | December 13, 2017

 

EURUSD: 1.1746
€/Usd has traded a mostly heavy session after the softer ZEW,/stronger US PPI undermined the Euro although the dollar then gave back some of its gains after headlines came through that Senator Rand Paul feels unable to vote for raising the US budget deficit. We now await the upcoming US CPI and the FOMC/ ECB meetings.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:  The Euro has fallen to meet the rising trend line support on Tuesday, but with the short term momentum indicators now aligning with the daily charts to point a little lower, it seems that we may be looking at further dollar strength ahead. The German/US CPI will be the main focus today, ahead of the FOMC, so a cautious stance is required, but a run below 1.1700 would not really surprise, where 1.1650 would be the next Fibo target.
Resistance Support
1.1847 6 Dec high 1.1716 Session low / Rising trend support
1.1811 11 Dec high 1.1707 (61.8% of 1.1553/1.1943)
1.1800 100 DMA 1.1690 Minor
1.1792 Minor 1.1650 (76.4% of 1.1553/1.1943)
1.1765 Minor 1.1620 Minor

Economic data highlights will include:                                                                                                                

German CPI/HICP, EU Industrial Production, Employment Change, US CPI, FOMC Meeting/Growth Projections



USDJPY: 113.50
US$Jpy finished the day pretty much unchanged after a choppy range, particularly after the PPI/Rand headlines,  of 113.36/75, but leaving the outlook unchanged.
1 hour/4 hour indicators: Neutral – Turning lower? Daily Indicators: Turning higher? Weekly Indicators:  Neutral
Preferred Strategy:  With the momentum indicators looking mixed, a cautious stance is needed while we wait on today’s Fed decision, where the dot plots for 2018/19 will be the main focus. On the topside, a break of the session high would then allow a run towards the Fibo level at 113.82, beyond which 114.00/05 will see sellers ahead of a possible towards 114.30 and even 114.75. On the downside, support will be seen at 113.35 (Daily cloud top), at 113.20 and again at 113.00 below which could see a run back towards 113.50/60 although probably not today.

As before, look to buy dips towards 113.00/10 with a SL placed sub 112.80.

Buy US$Jpy @ 113.05. SL @ 112.85, TP @ 114.20 (or wait until the FOMC and then go with the flow.)

Resistance Support
114.73 6 July high 113.37 Daily cloud top /Session low
114.33 7 July high 113.24 11 Dec low
114.06 9 Nov high 113.07 8 Dec low
113.82 (76.4% of 114.73/110.83) 112.95 (23.6% of 110.83/113.58)
113.75 Session high 112.55 (38.2% of 110.83/113.58)

Economic data highlights will include:                                                               

Machinery Orders



GBPUSD: 1.3319

 

 

 

T: German/EU Flash Manufacturing/Services/Composite PMIs, ECB Meeting/Interest Rate Decision/Press Conference, US Retail Sales, Import/Export Index, Jobless Claims,  US Flash Manufacturing/Services/Composite PMIs, Business Inventories, EIA Crude Oil Stocks Weekly Change

F: German Wage Price Index, EU Trade Balance, US New York State Empire Mfg Index, Capacity Utilisation, Industrial Production

————————————————————————————————————————————————-

 

USDJPY:

US$Jpy finished the day pretty much unchanged after a choppy range, particularly after the PPI/Rand headlines,  of 113.36/75, but leaving the outlook unchanged.
1 hour/4 hour indicators: Neutral – Turning lower? Daily Indicators: Turning higher? Weekly Indicators:  Neutral
Preferred Strategy:  With the momentum indicators looking mixed, a cautious stance is needed while we wait on today’s Fed decision, where the dot plots for 2018/19 will be the main focus. On the topside, a break of the session high would then allow a run towards the Fibo level at 113.82, beyond which 114.00/05 will see sellers ahead of a possible towards 114.30 and even 114.75. On the downside, support will be seen at 113.35 (Daily cloud top), at 113.20 and again at 113.00 below which could see a run back towards 113.50/60 although probably not today.

As before, look to buy dips towards 113.00/10 with a SL placed sub 112.80.

Buy US$Jpy @ 113.05. SL @ 112.85, TP @ 114.20 (or wait until the FOMC and then go with the flow.)

Resistance Support
114.73 6 July high 113.37 Daily cloud top /Session low
114.33 7 July high 113.24 11 Dec low
114.06 9 Nov high 113.07 8 Dec low
113.82 (76.4% of 114.73/110.83) 112.95 (23.6% of 110.83/113.58)
113.75 Session high 112.55 (38.2% of 110.83/113.58)

Economic data highlights will include:                                                               

Machinery Orders

T: Nikkei Mfg PMI, Industrial Production, Capacity Utilisation

F: Tankan

                                                                                      

————————————————————————————————————————————————

 

GBPUSD:

Having reached a brief high of 1.3379 following the better than expected UK CPI, Sterling has been very choppy, but overall has moved lower through the rest of the session to a low of 1.3303 as those holding long positions lighten up ahead of the FOMC, the EU Summit and the BOE meeting on Thursday, where no changes are expected. The UK unemployment figure today may create some waves if too far from expectations (exp Change of +4K).
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower Weekly Indicators:  Turning higher?
Preferred Strategy:  Sterling looks set to remain choppy in the medium, with Brexit headlines likely to guide the direction although today will look to FOMC Meeting (Wed) and then the BOE Meeting (Thur) for direction. No change expected from the BOE.

I remain neutral and possibly look to play a range of 1.3230/1.3400 although the momentum indicators suggest that the bias will continue to point to the downside, where the Fibo level at 1.3230 would be a target.

Resistance Support
1.3430 11 Dec high 1.3303 Session low
1.3417 Weekly cloud top 1.3295 (50% of 1.3038/1.3549)
1.3400 Minor 1.3280 Minor
1.3379 Session high 1.3250 Minor
1.3350 Minor 1.3232 (61.8% of 1.3038/1.3549)

Economic data highlights will include:                                                                                                              

UK Unemployment



USDCHF: 0.9910
US$Chf has traded a familiar range of 0.9889/9935 on Tuesday, and something similar may be in store today  as traders stand aside ahead of the FOMC/SNB/ECB Meetings due Wed/Thur.
1 hour/4 hour indicators: Neutral Daily Indicators: Neutral Weekly Indicators:  Neutral
Preferred Strategy:  With the short term charts looking neutral a cautious stance is needed ahead of the FOMC/SNB meetings. Another test of 0.9900/0.9875 would not surprise although the daily momentum indicators still look mildly constructive, and buying dips is still preferred as I suspect that we could eventually see a run back to 1.0000 and possibly to 1.0040.

Buy US$Chf @ 0.9880. SL @ 0.9830, TP @ 0.9980.

Resistance Support
1.0000 Psychological 0.9889 Session low
0.9971 8 Dec high 0.9985 (38.2% of 0.9742/0.9977)
0.9965 (76.4% of 0.1137/0.9816) 0.9854 6 Dec low / (50% of 0.9742/0.9977)
0.9950 Minor 0.9835 100 WMA /5 Dec low
0.9935 11 Dec high /Session high 0.9800 Minor


AUDUSD: 0.7561
 AudUsd is trading higher on Wednesday, underpinned by the Westfield M&A news although the strong US PPI has seen some of those gains eroded, and the 100 WMA could act as a magnate over the next few hours. Note that the  RBA’s Lowe/Kent  are speaking and could create some waves, as could the Consumer Confidence figure.
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning lower Weekly Indicators:  Turning lower
Preferred Strategy:   The short term indicators are still mixed, but trading from the short side continues to be the plan ahead of the FOMC Meeting (Wed) although it may be prudent to wait to sell it given the positive look of the 4 hour charts. Overall though, with the US$ looking generally underpinned elsewhere, I suspect that further upside for the Aud will be limited and selling into rallies is still preferred, but leave room for another squeeze towards 0.7580 and even to 0.7600. On the downside, support will arrive at 0.7520, below which there will be plenty of work to do at 0.7500 and then again at 0.7470/80, which will be strong, so taking some profit on shorts, if/when we get there, and looking to resell into a rally may be a more medium term plan.

Sell AudUsd @ 0.7580. SL @ 0.7615, TP @ 0.7500.

Resistance Support
0.7615 Minor 0.7540 Minor
0.7600 Minor 0.7518 Session low
0.7589 Session high           0.7502 8 Dec low/11 Dec low
0.7565 200 HMA 0.7480 Rising trend support
0.7550 100 WMA 0.7470 Weekly cloud top/Weekly cloud base

Economic data highlights will include:

WBC Consumer Confidence   – Dec, RBA Speeches – Lowe/Kent



NZDUSD: 0.6937
The Kiwi made a new 1 month high at 0.6952, but the US PPI contained further gains and pushed it back to 0.6930 by the end of the session. The Food Price Index is a risk factor coming up shortly.
1 hour/4 hour indicators: Mixed Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  The momentum indicators are mixed, and right now I would be square but a break of 0.6950/55 would suggest further topside momentum so buying a break may be the plan.

Buy NzdUsd @ 0.6955 SL Entry.  SL @ 0.6920, TP @ 0.7080.

Resistance Support
0.7030 (38.2% of 0.7434/0.6783) 0.6900 Session low
0.7005 24 Oct high 0.6875 Minor
0.6980 9 Nov high/Descending trend resistance 0.6850 Minor
0.6952 Session high 0.6822 11 Dec low
0.6935 Minor 0.6816 1 Dec low

Economic data highlights will include:                                                                            

Food Price Index – Nov