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

By | November 15, 2017


EURUSD: 1.1792
Preferred Strategy:  EurUsd had a strong rise on the back of solid EU data, negating the Head/Shoulder formation, and will now await today’s all-important US CPI, with the result, either side of the expected 1.7%yy to decide the next directional move for the pair. The 4 hour/daily momentum indicators do suggest further gains are possible, which would allow a run towards 1.1900 although there are plenty of previous highs ahead to provide resistance, which could stand in the way. The downside would find good support at the 100 DMA, at 1.1735, while below that would take us back towards 1.1700 and lower. This seems less likely right now and the US data will decide the direction, with the dollar needing an above-expectation reading in order to regain its balance.
24 Hour: Mildly Bullish Medium Term: Neutral
FX Charts Position: Short  – SL  above 1.1880
Resistance Support
1.1880 12 Oct high 1.1780 Minor
1.1857 20 Oct high 1.1760 Minor
1.1836 26 Oct high 1.1735 100 DMA
1.1822 (50% pivot of 1.2091/1.553) 1.1700 Minor
1.1805 Session high 1.1660 Session low

Economic data highlights will include:

EU Trade Balance, US Retail Sales, CPI, Business Inventories

USDJPY: 113.45
Preferred Strategy:  US$Jpy had a choppy session, pretty much confined to the previous range but is finishing the US session towards the lows, in line with the US$ weakness seen elsewhere.

As before, given the rather mixed/neutral look of the momentum indicators we could be in for a similar session today and on the downside, support will be seen at 113.20/30 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 at the session high of 113.90, 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 but right now may be a little premature to do so.

Note that the Japan Q3 GDP is out tonight and is seen slowing from strong 2nd Qtr.

24 Hour: Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
114.73 6 Nov high 113.30 Session 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)
113.90 Session high 112.70 Minor
113.70 Minor 112.30 19 Oct low

Economic data highlights will include:

Preliminary GDP (Q3), Industrial Production, Capacity Utilisation

GBPUSD: 1.3166
Preferred Strategy: Sterling fell to 1.3075 due to the UK October inflation data miss but then headed higher for most of the US session, riding on the back of the move in the Euro.

Overall, the momentum indicators are still in neutral so a cautious stance is required, and further choppy trade near current levels would not really surprise although the UK unemployment figures are due today and may cause some volatility.

On the topside, resistance will again be seen at 1.3180/85, while back above 1.3200 would find good offers at around 1.3230, beyond which could see a run back to 1.3250 and eventually to 1.3300.

On the downside, support will be now seen at 1.3115 ahead of the rising trend support/session low at 1.3075 and then at 1.3000 although I don’t think we head down here today.

I remain neutral, possibly very cautiously bullish.

24 Hour: Neutral Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
1.3255 (76.4% of 1.3320/1.3042) 1.3140 Minor
1.3228 10 Nov high 1.3115 100 DMA  /200 HMA
1.3215 (61.8% of 1.3320/1.3042) 1.3074 Session low /Rising trend support
1.3200 Minor 1.3060 13 Nov low
1.3186 Session high 1.3026 6 Oct low

Economic data highlights will include:                                                                                                        

UK Unemployment

USDCHF: 0.9897
Preferred Strategy: US$Chf had a tough session in falling hard, in line with the move in the Euro, and finishing near the day’s low of 0.9881.

The 4 hour/daily momentum indicators are warning of further losses ahead, which if correct would target 0.9865/70, and below there could see a run towards 0.9835 and 0.9800.

The topside currently looks a little limited, but a good US CPI could see a run back towards 0.9940 and to the session high of 0.9970, and then possibly back towards parity although the momentum indicators don’t really suggest such a move.

Further out, given the positive look of the weeklies, if we can eventually take out 1.0015/25 we could then head on to take another look at 1.0035/40, above which there is little to hold the dollar up ahead of 1.0100, and beyond that to 1.1025 and 1.0170.

24 Hour: Mildly Bearish Medium Term: Prefer to buy dips
FX Charts Position: Long – SL @ 0.9840.
Resistance Support
1.0017 9 Nov high 0.9881 Session low
0.9986 13 Nov high 0.9868 25 Oct low
0.9970 Session high 0.9850 Minor
0.9940 Minor 0.9830/35 23 Oct low/100 WMA
0.9925 Minor 0.9800 (38.2% of 0.9420/1.0037)

AUDUSD: 0.7630
Preferred Strategy: The Aud had heavy session because of yesterday’s China data, which generally missed expectation and has weighed on the downside ever since. US$ weakness has allowed the Aud to recover from the session lows but it has remained in a tight range, hovering above 0.7600.

Near term support arrives at 0.7600/10, below which would target 0.7570, and 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 13 Nov 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 today. If wrong, we could be in for a possible squeeze above 0.7700 which could see a run towards 0.7730/40. Doubtful. The Q3 wage price index is a data risk today and if soft, the Aud is likely to trade towards the 0.7600 support.

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:    Short
Resistance Support
0.7729 2 Nov high 0.7608 Session low
0.7700 200 DMA/7 Nov high 0.7600 Minor
0.7693 10 Nov high/9 Nov high/Descending trend resistance 0.7585 Minor
0.7665 13 Nov high /200 HMA 0.7571 7 July low
0.7649 Session high 0.7550 Minor

Economic data highlights will include:

WBC Consumer Confidence, Wage Price Index

NZDUSD: 0.6876
Preferred Strategy: The Kiwi has today set a new short term low at 0.6844 before a bounce, which has seen it close Tuesday at 0.6880.

The momentum indicators are now mixed and we may be in for a choppy session while waiting on the US data. On the downside, the initial support lies at 0.6845 ahead of 0.6830, below which would find strong support at 0.6817 where we have a major double bottom with the May low. Below that though would then find that there is little support ahead of 0.6670 although this remains a long way off.

On the topside, resistance will be seen at 0.6900 and again at 0.6920 and 0.6935. The 4 hour charts may be attempting to point a little higher so a small upside squeeze would not really surprise.

Overall, with the longer term (weekly) charts looking heavy, I suspect the Kiwi is currently biding its time ahead of a more sustained test of the recent lows, but patience will be required.

24 Hour: Neutral Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
0.6975/79 Descending trend resistance /9 Nov high 0.6870 Minor
0.6957 10 Nov high 0.6844 Session low
0.6935 13 Nov high 0.6832/30 30 Oct low /31 Oct low
0.6920 Minor 0.6817 11 May low/27 Oct low
0.6901 Session high 0.6800 Minor