13 June: Forecast: FX: US$/Majors

By | June 13, 2017


EURUSD: 1.1204

EurUsd has been choppy but without any direction on Monday, trading a 1.1191/1.1231 range.

The rangebound trade may continue but the dailies are rolling over and do suggest that selling into strength is probably still the way to go.  Above today’s 1.1230 high, the major resistance remains at last week’s high of 1.1285, above which, the top of the channel now sits at 1.1310, although that currently looks unlikely to be bothered. If wrong, a break of the topside could elicit a quick move higher, to where the points to watch are at 1.1365 (18 Aug high), 1.1427 (24 June high) and then at 1.1450 (major descending trend resistance).

The short term momentum indicators are neutral and it may just remain choppy today while waiting on the outcome of tomorrow’s FOMC meeting, but back under 1.1200/1.1190 would then allow for another test of 1.1160 and potentially of 1.1100/10. Further out, 1.1075 and 1.1040 are likely targets albeit that they are still some way off.

While the dailies remain toppish, selling rallies towards 1.1230/50 remains the plan, but with a tight SL placed above 1.1285, as we are then likely to see a run towards 1.1300/10 where I would again be looking to sell it with a tight SL above 1.1330.

A choppy day looks likely, ahead of the FOMC, but I prefer to trade from the short side. ZEW today.

24 Hour: Prefer to sell rallies Medium Term: Prefer to sell rallies
                                          Resistance Support
1.1326 8 Sept high 1.1191 Session low
1.1310 Channel Top 1.1163 31 May low
1.1300 9 Nov high 1.1150 (76.4% of 1.1108/1.1284)
1.1284 2 June high/7 June high 1.1108 30 May low
1.1231 Session high/200 HMA 1.1075 18 May low

Economic data highlights will include:

German Wage Price Index, German/EU ZEW Economic Sentiment Survey, US PPI, US NFIB Business Optimism Index , API Weekly Crude Oil Stock Inventory

USDJPY: 109.89

US$Jpy fell from the session high of 110.43 to a low of 109.62 as safe-haven demand set in on the back of the fall in the Nasdaq. A late bounce has seen the dollar close back towards the 110.00 pivot, and a neutral /mildly bearish stance seems wise for the coming session.

Below Monday’s low, 109.10 will provide the first real support, but below which there is not a lot to prop the dollar up until 108.85. Below there we could easily revisit the early April low, just above 108.00 although the short term momentum indicators are pointing a little higher today and the dollar looks relatively underpinned.

On the topside, the pivot remains at 110.00 which might well act as a magnate ahead of tomorrow’s US Interest Rate Decision. Above there, good resistance lies at 110.40/50, and further out 110.70 and 111.00/10 will be hurdles although this seems unlikely to be seen today.

With the dailies seemingly picking up some downside momentum, selling rallies is preferred although a rate hike tomorrow could quickly see the dollar turn higher.

24 Hour: Neutral Medium Term: Possibly prefer to sell rallies
                                         Resistance Support
111.11 (38.2% of 114.36/109.10) 109.62 Session low
111.00 Minor 109.10 6 June low
110.72 5 June high 108.87 21 April low
110.43/47 Session high/Daily Tenkan/ 200 DMA 108.32 18 April low
110.00 Minor 108.12 17 Apr low

GBPUSD: 1.2669

Cable has ended the day back at the post-election lows (1.26360 after having seen a squeeze up to 1.2768 in Asia.

The market is overwhelmingly bearish on Sterling and the dailies do seem to be hinting in that direction, in which case the points to watch, below 1.2620/30, are at 1.2600 and then at 1.2575 and 1.2514, which was the low seen on the announcement of the election. Below that would head towards 1.2465/70 although that remains some way off.

On the topside, resistance will be seen at minor levels at 1.2700/1.2730 and at the session high of 1.2768. This seems unlikely to be bothered again today but would present a decent sell opportunity if we get close, with a SL place above 1.2790.

24 Hour: Neutral Medium Term:  Neutral
                                         Resistance           Support
1.2840 (50% pivot of 1.3047/1.2636) 1.2636/38 9 June low/Session low
1.2790 (38.2% of 1.3047/1.2636) 1.2622 100 DMA
1.2768 Session high 1.2600 Minor
1.2730 Minor 1.2576 200 DMA/(50% pivot of 1.2108/ 1.3047)
1.2700 Minor 1.2514 18 April low

Economic data highlights will include:


USDCHF: 0.9686

US$Chf has traded a tight range of 0.9669/94 on Monday and the short term momentum indicators are neutral, suggesting more of the same, although the dailies do appear to be building some upside pressure.

If so, on the topside sellers will be seen at 0.9695/00 ahead of the Fibo level at 0.9727, beyond which will allow a run towards  0.9765 and then to 0.9800/05.

On the downside, the 100 MMA may act as magnate ahead of the FOMC meeting tomorrow, below which would see a move towards 0.9615. Under 0.9600 there is  little to hold the dollar up until the November spike low at 0.9550, roughly where the 200 WMA also lies although this seem unlikely.

24 Hour: Neutral Medium Term: Prefer to buy dips
                                         Resistance Support
0.9807 30 May high 0.9669 Session low
0.9765 Minor 0.9640 100 MMA
0.9727 (23.6% of 1.0099/0.9613)/9 June high 0.9613/16 6 June low /9 June low
0.9710 Minor 0.9575 Minor
0.9694 Session high 0.9549/40 9 Nov low/200 WMA

AUDUSD: 0.7540

AudUsd had a tight 25 point range on Monday, and given the mixed look of the momentum indicators we could be in for the same again today. A neutral stance seems wise.

The 4 hour charts continue to correct lower which may limit the upside momentum although the dailies still look mildly bullish. Immediate resistance lies at the session high and then at the 100 DMA at 0.755. If we can make further progress, above the 7 June high of 0.7565 we could then head on to 0.7585 and then towards 0.7600/0.7610 although I am doubtful that we get here today.

On the downside, the initial bids will arrive at the session low/ 200 DMA, at 0.7521/25. This area looks fairly well underpinned right now but a downside break would trigger some short term stops and may produce a trip back towards 0.7490/0.7500, below which could revisit 0.7465/70 and even 0.7445/50. The NAB Business Conditions/Confidence and China Foreign Direct Investment are due today.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance                                         Support
0.7611 17 Apr high 0.7525/21 200 DMA /Session low
0.7588 (61.8% of 0.7750/0.7328) 0.7500 Minor
0.7565 7 June high 0.7490 (38.2% of 0.7372/0.7565)
0.7555 100 DMA 0.7468 (50% of 0.7372/0.7565)
0.7546 Session high 0.7445 (61.8% of 0.7372/0.7565)

Economic data highlights will include:

NAB Business Conditions/Confidence (May), China Foreign Direct Investment

NZDUSD: 0.7197

The Kiwi slipped from an early high at 0.7212, and did see a sharp but brief selloff to 0.7170 in early London, but really has spent much of the day at close to 0.7200.

The short term momentum indicators are mixed/flat, so further consolidation could be in store. The dailies remain positive but are approaching overbought conditions and may be close to rolling over. This has yet to happen though and further gains could take the Kiwi beyond 0.7210/15 and on towards 0.7240 and to 0.7300, beyond which there is little to stop it heading on towards 0.7370. It is too early for that scenario but as we said before, note that the Kiwi finished May by making a key-monthly bullish reversal, which possibly does hint at further gains through 2017.

On the downside the initial support lies at 0.7165/70 and then at 0.7150 ahead of the 0.7125 6 June low and at 0.7110/15. Below 0.7090 would allow a return to minor 0.7050/60 and, further out, support levels would be seen at the 30 May low of 0.7035 and at 0.7000 a break of which could take us back to the 24 May low of 0.6988.

While looking bid in the short term, I would once again be tempted to look to sell into strength at around 0.7225/30, with a tight SL placed above 0.7250. A break and daily close below 0.7165 would suggest a near term top is in place and could prompt an acceleration to the downside.

24 Hour: Prefer to sell rallies Medium Term: Neutral
                                         Resistance Support
0.7300 Minor 0.7168 Session low
0.7265 Minor 0.7150 Minor
0.7247 23 Feb high 0.7125 5 June low /(23.6% of 0.6817/0.7222)
0.7230/22 (61.8% of 0.7485/0.6817) /8 June high 0.7090 200 HMA
0.7212 Session high 0.7067 (38.2% of 0.6817/0.7222)