16 Oct: Forecast: FX: US$/Majors

By | October 16, 2017

 

EURUSD: 1.1820
Preferred Strategy:  EurUsd was choppy within the tight 1.1800/75 range on Friday but ended up going nowhere, leaving the outlook a little cloudy at the start of the week. The bigger picture still seems to be building a head/shoulder top, so I do prefer an eventual run lower but in the meantime the current conditions look set to persist. A short term neutral stance seems wise and selling rallies is preferred. A move above 1.1880 could then see a run towards 1.1900/10, where I would look to sell again, with a SL above 1.1970.

Sell EurUsd @ 1.1880. SL @ 1.1920, TP @ 1.1680

Sell EurUsd @ 1.1970. SL @ 1.2020, TP @ 1.1750

24 Hour: Neutral-Prefer to sell rallies Medium Term: Mildly Bearish  – Prefer to sell rallies while under 1.1880
Resistance Support
1.1930 (61.8% of 1.2092/1.1669) 1.1804 Friday low
1.1920 Descending trend resistance 1.1795 11 Oct low
1.1900 Minor 1.1760 200 HMA
1.1879/82 12 Oct high/(50% of 1.2092/1.1669) 1.1725 Minor
1.1874/70 Session high/Neckline resistance 1.1700 Minor

Economic data highlights will include:

M:  EU Trade Balance, Buba, New York State Empire Mfg Index

T: German Wage Price Index, German/EU ZEW Economic Sentiment Survey, EU CPI, US Import/Export Index, Industrial Production, Capacity Utilisation, NAHB Housing Market Index, API Weekly Crude Oil Stock Inventory

W: Extraordinary EU Economic Summit, EU Construction Output, US Building Permits, Housing Starts, Beige Book ,EIA Crude Oil Stocks Weekly Change

T: EU Council Meeting, US Jobless Claims, Philadelphia Fed Mfg Survey

F: German PPI, EU Current Account, US Existing Home Sales, Baker Hughes Oil Rig Count



USDJPY: 111.85
Preferred Strategy:  The dollar ended the week below 112.00, reaching 111.68 after the CPI miss, and for the time being it looks heavy with a chance of heading towards the strong support at 111.10.  As I said before, I think the dollar will eventually head higher, so buying dips is preferred although that seems unlikely to happen in the next few sessions. For today, 111.10/112.00 would seem to have it covered.
24 Hour: Neutral Medium Term: Neutral – Mildly Bearish?
Resistance Support
113.00 Minor 111.68 Friday low
112.74 9 Oct high 111.46 25 Sept low
112.51 12 Oct high 111.30 Minor
112.03 Friday high 111.10 (38.2% of 107.32/113.43) /100 DMA
112.00 Minor 110.80 Minor

Economic data highlights will include:

M:  Industrial Production, Capacity Utilisation

T:

W:

T: Trade Balance, Foreign Bond/Stocks Investment, All Industry Activity Index

F



GBPUSD: 1.3282
Preferred Strategy:  GbpUsd had another strong session on Friday, trading up to 1.3337 (100 WMA) on the back of stronger UK interest rates which are diverging sharply from what is happening in the EU.  The charts are mixed and the dailies still look heavy despite the strong rally late last week. I am happy to leave Cable alone for now, although a break of the 100 WMA could see a run towards the major descending trend resistance at 1.3530. In the meantime, today looks to be rangebound as traders look towards tomorrow’s CPI figure for a hint as to whether the BOE will raise rates in November.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.3450 Minor 1.3260 Minor
1.3415 (61.8% of 1.3656/1.3026) 1.3246 Friday low
1.3375 Minor 1.3220 100 HMA
1.3340 (50% of 1.3656/1.3026) 1.3190 200 HMA
1.3237 Friday high/100 WMA 1.3120 12 Oct low

Economic data highlights will include:

M:

T:  UK CPI, PPI, RPI

W: UK Unemployment, Inflation Report Hearing

T:  UK Retail Sales

F: UK Public Sector Net Borrowing Requirements, CBI Distributive Trade Survey – Orders



USDCHF: 0.9745
Preferred Strategy:  US$Chf was choppy on Friday but remains within the 0.9700/0.9800 range and looks likely to continue to do so early in the week. I still prefer to be long in looking for an eventual trade above 0.9800/30, but it is a frustrating trade and needs to make a move soon or it could roll over and head back towards 0.9675. Neutral.
24 Hour: Neutral Medium Term: Prefer to buy dips
Resistance Support
0.9850 200 WMA 0.9715 Minor
0.9835 200 DMA/(61.8% of 1.0099/0.9420) /6 Oct high 0.9705 Friday low
0.9807 9 Oct high 0.9685 Minor
0.9789 10 Oct high 0.9676 2 Oct low (38.2% of 0.9420/0.9836) /
0.9770 Friday high 0.9642 25 Sept low

Economic data highlights will include:

M:

T:

W:

T: Trade Balance

F



AUDUSD: 0.7889
Preferred Strategy:  AudUsd had a strong end to the week, squeezing sharply higher after the US inflation data on Friday, with solid China data also seeming to have played an important role in sending it higher. With both the 4 hour/daily momentum indicators pointing higher, further gains look possible and a move back towards 0.7900/15 seems possible. On the downside, support currently lies at around 0.7850, and below that at the Friday low of 0.7816 although that currently looks unlikely to be bothered.Watch out today for the China CPI (exp 0.4%mm, 1.6%yy) and PPI (6.3%yy).
24 Hour: Mildly Bullish Medium Term: Neutral
Resistance Support
0.7985 22 Sept low 0.7850 Minor
0.7960 (61.8 of 0.8102/0.7732) 0.7835 Minor
0.7940 Minor 0.7816 Friday low
0.7915 (50% pivot of 0.8102/0.7732) 0.7790 100 DMA
0.7897 Friday high 0.7770 11 Oct low

Economic data highlights will include:

M:  China CPI

T: WBC Leading Economic Index New Motor Vehicle Sales, RBA Minutes

W:

T: Australian Unemployment, China Retail Sales, Industrial Production, Urban Investment, GDP, NBS Press Conference

F



NZDUSD: 0.7173
Preferred Strategy:  As with the Aud, the Kiwi headed sharply higher on Friday and looks as though it has further gains ahead of it. Immediate resistance lies at 0.7200, but above which it could head on towards 0.7245. On the downside, the 100 DMA is at 0.7155 and if the kiwi fails to make headway, this may act as a near term pivot, below which could see a run back towards 0.7120 and perhaps 0.7100 although this looks unlikely right now.Watch out today for the China CPI
24 Hour: Mildly Bullish Medium Term: Neutral
Resistance Support
0.7290 (61.8% of 0.7434/0.7058) 0.7155 200 DMA
0.7245 (50% of 0.7434/0.7058) 0.7120 Friday low
0.7215 Minor 0.7090 100 HMA
0.7200 (38.2% of 0.7434/0.7058) 0.7077 12 Oct low
0.7196 Friday high 0.7055 10 Oct low

Economic data highlights will include:

M:  NZ CPI

T:  Global Dairy Trade Index

W:

T:

F NZ Visitor Arrivals