15 May: Forecast: FX: US$/Majors + trade ideas

By | May 15, 2018



EURUSD: 1.1927
EurUsd is back at 1.1935; pretty much where it began the day after a range bound session. Today will be a busy one with regards the calendar,  with the focus to be on  the German/EU Preliminary Q1 GDP (exp +0.4% qq both for German/EU), the ZEW and the  US Retail Sales (exp RS-Ex Auto +0.5%mm, Control Group +0.3%mm).
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher? Weekly Indicators:  Turning lower.
Preferred Strategy:  A cautious tone is needed again today, with the 4 hour/daily momentum indicators looking rather mixed. The 4 hour charts are beginning to point lower again, while the dailies are still unwinding from the recent selloff in the Euro, so a messy session, but without too much direction would not surprise. On the topside, the Euro would run into offers again at 1.1975 ahead of another test of 1.1995/1.2000 and the 200 DMA at 1.2015. Above this, the next target would be at 1.2070 (38.2% of 1.2475/1.1822).

The 4 hour charts look a bit heavy now though and the weeklies are also pointing lower, so if we get back below 1.1890/1900 then we could see a return to 1.1840 and to 1.1815/25, where the 55 WMA/December 12 low has so far propped the Euro up. A break would find minor bids at 1.1800, below which allows for a run towards 1.1785, beneath which there is little support to be seen ahead of 1.1700/10.

Sell EurUsd @ 1.2000. SL @ 1.2050, TP @ 1.1840

Buy EurUsd @ 1.1860. SL @ 1.1810, TP @ 1.2000

Resistance Support
1.2030 Minor 1.1922 Session low
1.2015 200 DMA 1.1890 12 May low /100 HMA
1.1995 Session high 1.1837/42 55 WMA/11 May low
1.1975 (23.6% of 1.2475/1.1822) 1.1822/16 9 May low/22 Dec low
1.1950 Minor 1.1787 (76.4% of 1.1553/1.2555)

Economic data highlights will include:

EU/German Preliminary Q1 GDP, EU Industrial Production – Mar, German/EU ZEW Economic Sentiment Survey – May, US Retail Sales – Apr, New York State Empire Mfg Index – May, Business Inventories – Mar, NAHB Housing Market Index – may, API Weekly Crude Oil Stock Inventory

USDJPY: 109.68
US$Jpy is firmer today but remains well within the 109/110 range, and with something similar looking likely on Tuesday. Any directional move looks likely to be seen following the release of the US Retail Sales later in the day, with all eyes firmly on the US10Y yield. (3.005%).
1 hour/4 hour indicators: Mixed. Daily Indicators: Turning Neutral. Weekly Indicators:  Turning higher
Preferred Strategy:  The momentum indicators are mixed heading into Tuesday so a cautious stance is required, with focus currently on the direction of US yields.

The daily charts are now turning neutral and further choppy trade looks likely for much of the session below 110.00, where the double top exists.  A sustained break of 110.00 would then allow for a move to 110.15/25, which should also be strong, ahead of 110.50 and 110.85 (76.4% of 114.73/104.60).

The initial support will arrive at 109.20/15 ahead of the 9 May low of 109.00. Below here, look for a return to 108.75/80 and possibly to 108.55/65 although this looks unlikely today


Resistance Support
110.48 2 Feb High 109.15/20 12 May low /Session low
110.15/25 200 DMA /(61.8% of 114.73/104.60) 108.99 9 May low
110.02/00 2 May high /11 May high 108.75/82 7 May low /8 May low
109.80 Minor 108.63/54 4 May low //24 Apr low/100 DMA
109.68 Session high 108.10 Neckline

GBPUSD: 1.3557
Cable had a choppy session to start the week in heading up to a high of 1.3607 before turning lower again  and currently shows little change from where it began the day as it consolidates in the 1.35/36 range, still sitting close to the 200 DMA.
1 hour/4 hour indicators:  Neutral Daily Indicators: Possible basing formation. Weekly Indicators:  Turning lower
Preferred Strategy:   The short term momentum indicators look mixed and a neutral stance is required. If Cable does manage a squeeze higher, near term, minor resistance will again be seen at 1.3580/85 ahead of 1.3600/10. Beyond last Thursday’s brief pre-BOE high of 1.3617, sellers would arrive at 1.3630 and the 2 May high 1.3665 although that seems some way off right now

The longer term charts still look heavy though, and below today’s base at 1.3635 would allow a retest of minor support at 1.3515 and the 12 May low at 1.3500. Under there could then head to the 8 May/trend low of 1.3485 a break of which would open the way to the January low at 1.3457 and the major Fibo level at 1.3400 (38.2% of 1.1821/1.4376)

Resistance Support
1.3665 2 May high 1.3536 Session low
1.3629 3 May high 1.3501 12 May low
1.3607 Session high 1.3485 Minor
1.3580 Minor 1.3457/60 11 Jan low /11 May low
1.3550 200 DMA  /200 HMA 1.3398 (38.2% of 1.1822/1.4376)

USDCHF: 1.0003
US$Chf, fell to 0.9957 on Monday ahead of a decent bounce, reaching 1.0012 in early NZ trade, finishing nearby.
1 hour/4 hour indicators: Mixed. Daily Indicators: Possible topping formation. Weekly Indicators:   Up
Preferred Strategy:  The short term momentum indicators look a little more positive after the bounce off the Monday low although the dailies now look a little toppish and it maybe that the recent uptrend has now run its course, possibly with some choppy trade ahead. The weekly charts still point higher though so looking to buy dips remains the medium/longer term strategy.

If the dollar heads lower, support will again be seen at 0.9975/80, ahead of 0.9955/60 and minor levels at 0.9935/15 ahead of the 1 May low of 0.9890. This looks unlikely right now but if wrong, on a break of 0.9890, further bids should arrive at 0.9870 and at 0.9845/50.

On the topside, above 1.0015, decent resistance will be seen at the trend high of 1.0055, which looks unlikely to be taken out today, but above which would open the way to 1.0065/70, which is a major Fibo level, and to 1.0100. Further out we are potentially looking at a run up to 1.0170 and even to the December 2016 high of 1.0343 albeit probably not for a while to come.

Buy US$Chf @ 0.9960. SL @ 0.9920, TP @ 1.0100

Resistance Support
1.0107  Apt 2017 high 1.0000 Pivot
1.0099 May 2017 high 0.9975 Minor
1.0067 (76.4% of 1.0343/0.9187) 0.9957 Session low
1.0055/56 7 May high /9 May high /11 May high 0.9935 2 May low
1.0006 Session high 0.9890 1 May  low

AUDUSD: 0.7526
The Aud reached a high of 0.7565 before reversing lower and is finishing the day on its lows ahead of today’s RBA Minutes and China Retail Sales (exp +10%)/Industrial Production (exp +6.3%). RBA’s Debelle will be speaking shortly.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:   The short term momentum indicators are turning lower while the daily charts still look as though they may be attempting a basing formation, but with direction likely to be driven by the RBA Minutes.

If we do see another squeeze higher, minor resistance will be seen at 0.7550 ahead of the more important 0.7565/70. Above here opens up 0.7580/90 ahead of 0.7600/05. This seems unlikely to be visited today but if wrong look for further gains towards 0.7620.

The weekly charts remain heavy, and would seem to suggest further losses to come in the days ahead. If so, below 0.7520, the initial support will arrive at 0.7500 ahead of 0.7485 and 0.7450. Below minor support at 0.7435/40 would then head towards the 9 May low of 0.7411, the 11 month trend low. Below 0.7400, there really is not too much to hold it up ahead of Fibo support at 0.7385, the 1 June 2017 low at 0.7371 and the May 2017 low of 0.7328.

Longer term; Sell AudUsd @ 0.7585. SL @ 0.76250, TP @ 0.7450

Resistance Support
0.7620 24 Apr high 0.7522/25 12 May low/Session low
0.7604 (38.2% of 0.7915/0.7411) 0.7500 200 HMA
0.7582/88 (23.6% of 0.8135/0.7411) /26 April high 0.7485 100 HMA
0.7566 12 May high/Session high 0.7450 11 May low
0.7550 Minor 0.7411 9 May low

Economic data highlights will include:

RBAs Debelle Speech, RBA Minutes, China Retail Sales, Industrial Production, Fixed Asset Investment – Mar

NZDUSD: 0.6916
 The Kiwi is lower on Tuesday, hurt by contagion from the EM selloff, and after seeing an early high of 0.6974 it is now sitting just above the lows of 0.6910, currently right on the major rising trend support
1 hour/4 hour indicators: Turning lower Daily Indicators:   Turning lower Weekly Indicators:  Turning lower
Preferred Strategy:   The Kiwi looks vulnerable to further fallout from the selloff in the EM sector, and a break of current levels could see quite a sharp move lower. Important  support (rising trend line) may hold it here above 0.6900 but a downside break  would trigger stops and open up a move to 0.6815 and then to 0.6780, with only minor support to be seen once 0.6900 is broken.

On the topside, sellers will be found today at 0.6950 (minor) and at the Monday high of 0.6975 ahead of 0.6980/85, at 0.6995/7000. This looks unlikely to be revisited today, although if wrong, look for a squeeze towards the 8 May high of 0.7030. Above here, unlikely, a bounce to 0.7040/50 would see sellers, beyond which allows for 0.7080 and then 0.7095/00, but probably not for quite a while now.

Global Dairy Trade Index tonight

Sell NzdUsd @ 0.6950. SL @ 0.6990, TP @ 0.6825

Resistance Support
0.7030 8 May high 0.6910/15 Session low/Rising trend support
0.7015/20 100 HMA/200 HMA 0.6902 11 May low
0.6997 9 May high 0.6870 Minor
0.6986 12 May high 0.6850 Minor
0.6976 Session high 0.6828 11 Dec low

Economic data highlights will include:                    

Global Dairy Trade Index