14 Nov: Forecast: FX: US$/Majors + trade ideas

By | November 14, 2017

 

EURUSD: 1.1668
Preferred Strategy:  EurUsd had a steady session on Monday although the Euro remains underpinned into the close, sitting just below the neckline of the head/shoulders formation having tested it by reaching a high of 1.1675.

As before, while I prefer t be short, some caution is warranted as the momentum indicators, including the dailies, seems to be turning to point higher although as long as the Euro holds below 1.1675 on a daily-close basis, shorts can be maintained; but with a tight SL above there. A topside break of 1.1675 would trigger stops and could see a run back to 1.1700 where the 100 DMA will provide stern resistance, but above there could see a bigger squeeze towards the descending trend resistance at around 1.1775.

On the downside, support will today be seen at the session low (1.1635), at 1.1620 and again at around 1.1580/85, where the rising trend support also lies. Below there, the trend low at 1.1553 and the Fibo level at 1.1510 will come into play although probably not today.

Right now the upside looks to be the path of least resistance, but I would still look to sell into strength, with a SL placed tight above the 100 DMA. The weeklies still point lower but any tax-bill headlines should be watched closely this week, as any hint of a delay would have quite an impact on markets, possibly sending the dollar sharply lower. The US Retail Sales and CPI on Wednesday are the next key event risks. Keep SL tight on any short positions but look to sell into strength above 1.1700, with a SL again placed quite tight, above the 100 DMA at around 1.1735 or above the Descending trend resistance, currently at 1.1760.

Watch out for any central bankers headlines from the ECB conference today alongside a busy calendar.

Sell EurUsd @ 1.1710. SL @ 1.1740, TP @ 1.1500.

24 Hour: Mildly Bullish – Prefer to sell rallies Medium Term: Mildly Bearish – Prefer to sell rallies
FX Charts Position: Short  – Looking  to add to the position into strength
Resistance Support
1.1760 (61.8% of 1.1879/1.1574) 1.1635 Session low
1.1715/18 (50% of 1.1879/1.1574)/100 DMA 1.1620 200 HMA /10 Nov low
1.1686/90 3 Nov high /(38.2% of 1.1879/1.1574) 1.1578 Rising trend support
1.1675/77 H.S. Neckline /Session high/10 Nov high 1.1553 7 Nov low
1.1660 200 WMA 1.1510 (38.2% of 1.0570/1.2091)

Economic data highlights will include:

German CPI/HICP, Preliminary Q3 GDP, EU Preliminary GDP, Industrial Production, German/EU ZEW Economic Sentiment Survey , US PPI, US NFIB Business Optimism Index, API Weekly Crude Oil Stock Inventory, Speeches” Draghi, Yellen, Carney, Kuroda



USDJPY: 113.59
Preferred Strategy:  US$Jpy had a tight session (113.24/71), leaving the outlook unchanged, and given the rather mixed/neutral look of the momentum indicators we could be in for a similar session today although Kuroda will be speaking at the ECB roundtable conference and could create some waves..

On the downside, support will be seen at 113.20 and then again at 112.95/00, below which there is only minor support to be seen ahead of the mid October low at 112.30 although I don’t think we head this far today.

On the topside, minor resistance now lies at 113.70 and 113.85, ahead of 114.00 and the 9 Nov high of 114.06. Above here, unlikely today, could return to 114.35/45 and beyond, towards the 114.73, 6th Nov high, but above which could see a test of the descending trend resistance, currently at around 114.90. A break of 115.00 would then see little resistance until 115.20 and then 115.50.

As before, I remain fairly neutral, although I still like the dollar in the medium term and prefer to buy dips although right now may be a little premature to do so.

24 Hour: Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
114.73 6 Nov high 113.23/21 Session low/10 Nov low
114.33 7 Nov high 113.08 9 Nov low
114.06 9 Nov high 112.95 31 Oct low/(23.6% of 107.31/114.73)
113.85 200 HMA /Daily Tenkan 112.70 Minor
113.70 Session high 112.30 19 Oct low


GBPUSD: 1.3121
Preferred Strategy: Sterling opened lower and traded heavily, down to a low of 1.3061; on the back of the Sunday Times article suggesting that a vote of no confidence in UK PM Theresa May is not too far away.

It has since recovered 1.3100, and with the momentum indicators still in neutral a cautious stance is required. Further choppy trade near current levels would not really surprise although CPI is due today and may cause some volatility.

On the topside, resistance will be seen at 1.3135 and at 1.3180/85, where a chart gap now needs to be filled. Back above 1.3200 would find good offers at around 1.3230 although I don’t see it up here today unless the CPI is very strong.

On the downside, support will be seen at 1.3060 ahead of 1.3025 and then at 1.3000.

Neutral.

24 Hour: Neutral Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
1.3228 10 Nov high 1.3100 Minor
1.3215 (61.8% of 1.3320/1.3042) 1.3085/80 100 DMA
1.3200 Minor 1.3060 Session low
1.3180/85 Session high / Chart Gap 1.3026 6 Oct low
1.3135 200 HMA/100 HMA 1.3000 Psychological

Economic data highlights will include:

UK CPI, PPI, RPI (Oct)



USDCHF: 0.9959
Preferred Strategy: US$Chf had a choppy but rangebound session and closed the day pretty much unchanged.

The short-term indicators are neutral although the 4 hour charts may be picking up some mild positive momentum and suggest that we could see a run towards 0.9980/1.0000 again today. However, with the dailies still looking slightly heavy we may also see another decline towards the session low at 0.9936 and then to the 10 Nov low at 0.9920. Beyond that would open the way to 0.9890/9900, and then possibly to 0.9865 over the coming days although I don’t think we head back here today.

With the weekly momentum indicators generally looking positive, further dollar strength could be in store down the track, and if we can take out 1.0015/25 we could then head on to take another look at 1.0035/40. Above this there is little to hold the dollar up ahead of 1.0100, and beyond that to 1.1025 and 1.0170.

For now, look for the dollar to chop around current levels and possibly to head a little higher, but with the view of buying dips for an eventual move towards 1.1000+.

Buy US$Chf @ 0.9920. SL @ 0.9880, TP @ 1.0025.

24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
FX Charts Position: Long – Looking to add on dips.
Resistance Support
1.0036/37 27 Oct high /1 Nov high 0.9936 Session low
1.0028 6 Nov high 0.9921 10 Nov low/9 Nov low
1.0017 9 Nov high 0.9900 Rising trend support
1.0000 Psychological 0.9890 (23.6% of 0.9420/1.0037)
0.9986 200 HMA /Session high 0.9868 25 Oct low


AUDUSD: 0.7626
Preferred Strategy: The Aud had a heavy session in taking out the previous double bottom and trading down to 0.7616 ahead of a mild bounce although the technicals look heavy heading into Tuesday trade, when the NAB Business Conditions/Confidence and the China Retail Sales/Industrial Production will provide further guidance.

Near term support arrives at 0.7616 and again at 0.7600 below which would target 0.7570. as I said before, I suspect the Aud$ is building a bear flag (see daily chart) and is biding its time ahead of a more sustained test the downside which will eventually take us towards 0.7400. Patience will be required but trading from the short side is still preferred.

On the topside, resistance will be seen at 0.7650 and at the session high of 0.7665. Above this, would then allow room to move towards 0.7675/80 and possibly 0.7695/0.7700 although I doubt that we actually see it up here. If wrong, we could be in for a possible squeeze above 0.7700 which could see a run towards 0.7730/40. Doubtful.

Sell AudUsd @ 0.7650. SL @ 0.7685, TP @ 0.7580

24 Hour: Neutral  – Prefer to sell rallies Medium Term: Neutral –Mildly Bearish
FX Charts Position:   
Resistance Support
0.7738 Descending trend resistance 0.7616 Session low
0.7729 2 Nov high 0.7600 Minor
0.7700 200 DMA/7 Nov high 0.7585 Minor
0.7693 10 Nov high/9 Nov high 0.7571 7 July low
0.7765/70 Session high /200 HMA 0.7500 Minor

Economic data highlights will include:

NAB Business Conditions/Confidence, China Retail Sales, Industrial Production, Urban Investment



NZDUSD: 0.6903

xxxx.