16 Mar: Forecast: FX: US$/Majors + trade ideas

By | March 16, 2018

 

EURUSD: 1.2302
The US$ is stronger all round today, and after a slow drift lower in Europe €/Usd increased its downside momentum after the strong US data, ending the day on session lows at 1.2300. A busy US calendar again today could see another active session , and if the data is as firm as yesterday’s we can expect to see further dollar strength.
1 hour/4 hour indicators: Turning lower. Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  The short term momentum indicators look heavy and a break below 1.2290 would suggest that we could head towards support at 1.2265 and then at 1.2250 and possibly 1.2220.

Selling rallies is currently preferred, although the medium term indicators still look fairly neutral, but minor resistance should today be seen at 1.2335 and then at 1.2350 and at the session high at 1.2383. Beyond there could then return to 1.2400/10, above which could head back to 1.2440 and even to 1.2500 although not today.

The bigger picture also looks neutral from a technical perspective although I think that the improving US data and expected rate hikes will keep the dollar relatively underpinned, for an eventual move towards the rising trend support, currently at 1.2140.

Resistance Support
1.2444 8 Mar high 1.2300 Session low
1.2412 14 March high 1.2290 12 March low
1.2383 Session high 1.2265 (61.8% of 1.2154/1.2444)
1.2360 200 HMA 1.2250 2 March low
1.2335 Minor 1.2220 (76.4% of 1.2154/1.2444)

Economic data highlights will include:

German Wage Price Index, EU CPI – Feb, US Building Permits, Housing Starts all Feb, Michigan Consumer Sentiment Index Preliminary – Mar, Industrial Production, Capacity Utilisation



USDJPY: 106.34
US$Jpy has been volatile again on Thursday, falling to 105.80 in Asia, bouncing back above 106.00, falling again to the lows and then chopping higher to finish near session highs of 106.40, pretty much unchanged from yesterday’s close.
1 hour/4 hour indicators: Mixed. Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  A cautious approach is required and 106/107 range may cover it today, although the momentum indicators do look a little more constructive and a test of the descending trend resistance at around 106.75 may be on the cards. Above here could stretch to 107.00 and then to 107.30/40.

Back below 106.00 could see a run back towards the session low and the 200 MMA at 105.70 although this is less favoured today and I prefer to buy dips.

Resistance Support
107.47 (23.6% of 114.73/105.25) 106.00 Minor
107.28 13 March high 105.78 Session low
107.00 Minor 105.70 200 MMA
106.73 14 March high / Descending trend resistance 105.45 7 March low
106.35 Session high 105.25 2 March low

Economic data highlights will include:

Capacity Utilisation – Feb, Industrial Production – Jan



GBPUSD: 1.3933
Cable remains rangebound on Thursday against the US$ (1.3921/88) but firmer on the crosses, on rising hopes of a UK rate hike at the Mar 22 BoE meeting. Note that UK Brexit secretary Davis is to meet the EU’s Barnier on Monday.
1 hour/4 hour indicators: Neutral – Turning lower? Daily Indicators:  Neutral. Weekly Indicators:  Possible topping formation.
Preferred Strategy:     Cable remains very choppy, and I suspect is still best left alone, with too many factors, not least the ongoing Brexit headlines, influencing market moves. The 4 hour/daily indicators remain in neutral, and on the topside resistance will arrive ahead of 1.4000, which should be strong if we get there but above which would open 1.4030, 1.4070 and eventually 1.4100. On the downside, minor support will be seen at 1.3920 ahead of 1.3900 and 1.3875. Sidelined. Note that GbpAud may be about to break a long-term resistance line going back to 2015 (chart below).
Resistance Support
1.4100 (61.8% of 1.4345/1.3711) 1.3921 Session low
1.4070 26 Feb high 1.3900 Minor
1.4030 (50% pivot of 1.4345/1.3711) 1.3875 13 March low
1.3995 13 March high 1.3840 12 March low
1.3965 Minor 13800 Minor


USDCHF: 0.9519
US$Chf traded higher on Thursday , taking the dollar back up to 0.9520, settling the day at 0.9515 and looking constructive heading into Friday trade..
1 hour/4 hour indicators: Turning higher Daily Indicators: Neutral – Turning higher? Weekly Indicators:   Neutral
Preferred Strategy:  The short term momentum indicators look constructive today, and the dailies also seem to be picking up steam again on the topside so I still prefer to look to buy dips, possibly nearer 0.9485 today, with a SL placed below 0.9445. The immediate resistance will be seen at 0.9520 and then at the 8 March high of 0.9534 ahead of minor leaves towards 0.9600, above which allows a move to the 0.9615 Fibo level.

Buy US$Chf @ 0.9485. SL @ 0.7445, TP @ 0.9610

Resistance Support
0.9615 (50% of 1.0037/0.9186) 0.9500 Minor
0.9585 Minor 0.9470 100 HMA
0.9560 Minor 0.9440 200 HMA
0.9534 8 Mar high 0.9421/23 8 Mar low /14 March low
0.9512/15 (38.2% of 1.0037/0.9186) /Session high 0.9400 (38.2% of 0.9186/0.9534)


AUDUSD: 0.7796
The Aud has fallen sharply in EU/US trade reaching 0.7795 and closing on its lows. A stronger US$ and with the risk mood seemingly souring somewhat, dragged commodities and the Aud lower. Note:  RBA Assist Gov Debelle Speech today.
1 hour/4 hour indicators: Turning lower. Daily Indicators: Turning Neutral Weekly Indicators:  Turning lower?
Preferred Strategy:

The short term momentum indicators look increasingly heavy today although the dailies are flat. I prefer the downside though and if correct, 0.7790 should take a while to break through but below which opens the way to 0.7770/60 which should also be strong. Under there allows a return to 0.7710/15 although possibly not today unless the US data is very strong and sees the US$ run higher on all fronts.

On the topside, resistance will be seen at 0.7825/30 and then at 0.7850 and 0.7865.

Prefer to sell rallies

Sell AudUsd @ 0.7825. SL @ 0.7865, TP @ 0.7725

Resistance Support
0.7916 14 March high 0.7795/90 Session low /(61.8% of 0.7713/0.7916)/200 DMA
0.7890 Minor 0.7770 100 DMA / 7 Mar low/8 Mar low
0.7865 100 HMA 0.7760 (61.8% of 0.7713/0.7916)
0.7850 Minor 0.7725 5 March low
0.7830 200 HMA 0.7712 1 March low

Economic data highlights will include:                                                     

F: RBA Assist Gov Debelle Speech



NZDUSD: 0.7275
The Kiwi has headed lower, breaking back below 0.7300, under pressure from the strong US$, and falling to 0.7266 before closing the day at 0.7280. NZ Mfg PMI coming up shortly.
1 hour/4 hour indicators: Turning lower Daily Indicators:  Neutral Weekly Indicators:  Turning Neutral
Preferred Strategy:   The 4 hour/daily momentum indicators are heavy but the dailies remain flat, so I still prefer to stand aside right now although the 4 hour charts do hint at a possible short term downside momentum. If so,  bids will arrive again today at 0.7265 and then at 0.7245/50 ahead of 0.7220, with the major downside target being the major Fibo level at around 0.7185, (38.2% of 0.6780/0.7438) but we have to wait and see on that.

Today will find offers at 0.7300 and at the session high of 0.7333 ahead of further resistance at 0.7240/50 and at the 22 Feb, 0.7365 high, beyond which opens 0.7400+. Sidelined.

Resistance Support
0.7365 22 Feb high 0.7266 Session low
0.7354 13 March high /14 March high 0.7244/49 8 Mar low /9 March low
0.7340 (61.8 % of 0.7436/0.7185) 0.7220 6 Mar low
0.7333 Session high 0.7202 5 Mar low
0.7300 Minor 0.7185 1 March low

Economic data highlights will include:

NZ Mfg PMI