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

By | November 17, 2017


EURUSD: 1.1765
Preferred Strategy:  EurUsd had a quiet session on Thursday in drifting from 1.1800 to 1.1855, and is sitting near the bottom end of the range following the US HoR vote on tax reform.

At the end of the session, the short term momentum indicators look a little heavy and we might see a further decline towards support at 1.1740/45, which should be strong but below which would open the way back to 1.1700, below which 1.1670 would attract.

The daily charts still suggest that further gains are possible in the days ahead, and back above 1.1800 would find good sellers at 1.1855/60 and again at 1.1880/85, beyond which would allow a run towards 1.1900.

For the coming session I prefer to adopt a neutral stance in that absence of any major data, but would possibly look to sell into strength above 1.1800, with a SL placed above 1.1880. Watch out for words of wisdom from Draghi/Weidmann.

Sell EurUsd @ 1.1830. SL @ 1.1885, TP @ 1.1740.

24 Hour: Neutral -Mildly Bearish Medium Term: Neutral – Prefer to sell rallies
FX Charts Position: Short  – SL  above 1.1880
Resistance Support
1.1886 (61.8% of 1.2091/1.1553) 1.1756 Session low
1.1880 12 Oct high 1.1740/35 (38.2% of 1.1553/1.1859)/100 DMA
1.1857/59 20 Oct high/Session high 1.1700 Minor
1.1825 Minor 1.1671 (61.8% of 1.1553/1.1859)
1.1800 Minor 1.1660 14 Nov low

Economic data highlights will include:

EU Current Account, Mario Draghi Speech, Buba’s Weidmann Speech, Construction Output, US Building Permits, Housing Starts, Kansas Fed Mfg Activity, Baker Hughes Oil Rig Count

USDJPY: 113.00
Preferred Strategy:  US$Jpy has had another choppy session but has again ended up at 113.00, where the Fibo level at 112.95 is acting as a magnate.

With the short term momentum indicators looking mixed, a choppy session near to current levels would not surprise, and on the topside, minor resistance now lies at 113.30/35, ahead of 113.50, 113.70 and the 14 Nov high of 113.90. Back above 114.00 and the 9 Nov high of 114.06 is unlikely today but if wrong, could return to 114.35/45 and beyond, towards the 114.73, 6th Nov high. Further out, we could eventually see a retest of the descending trend resistance, currently at around 114.90, and a break of 115.00 would then see little resistance until 115.20 and then 115.50.

The downside will once again find bids at 112.70 and then at 112.50. This may hold today, but if wrong, look for a move towards 112.30 and 112.00, ahead of strong support at 111.80 (100 DMA/200 DMA).

As before, I remain fairly neutral, although I still like the dollar in the medium term and prefer to buy dips, but today looks like being a choppy and rather directionless session. Use 112.70/113.30 as a guide.

24 Hour: Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
114.06 9 Nov high 112.95 (23.6% of 107.31/114.73)
113.90 14 Nov high 112.73 Session low
113.70 Minor 112.47 15 Nov low
113.49 15 Nov high 112.30 19 Oct low
113.32 Session high 112.00 Minor

GBPUSD: 1.3184
Preferred Strategy: Sterling is firmer following the better than expected Retail Sales but has been unable to make any headway above 1.3200/05.

Overall, the momentum indicators are still in neutral so a cautious stance is required and it is wise to stand aside (although I remain long GbpAud). Further choppy trade near current levels would not really surprise in the absence of any data, although if anything I remain mildly positive for Sterling.

On the topside, resistance will again be seen at 1.3200/05, while back above 1.3213 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 1.3130 and at 1.3115 ahead of the rising trend support/14 Nov low at 1.3075 and then at 1.3000 although I don’t think we head down here for the time being.

I remain neutral, possibly very cautiously bullish.

24 Hour: Neutral  -Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat (Long GbpAud)
Resistance Support
1.3275 2 Nov high 1.3150 200 HMA
1.3255 (76.4% of 1.3320/1.3042) 1.3134 Session low
1.3228 10 Nov high 1.3110 Minor
1.3213 (61.8% of 1.3320/1.3042) /15 Nov high 1.3074 14 Nov low /Rising trend support
1.3207 Session high 1.3026 6 Oct low

USDCHF: 0.9941
Preferred Strategy: US$Chf has corrected some of the losses of the previous session and currently sits at session highs at 0.9942.

The daily momentum indicators are still hinting at the chance of further losses ahead, which if correct would head back below 0.9900 to the session low of 0.9980. Below there would find minor support at 0.9865/70, below which could see a run towards 0.9835 and 0.9800.

The short term momentum indicators though look more positive today following the bounce and if 0.9940 can be recovered then we could see a run towards the 14 Nov high of 0.9970. Eventually, I suspect we will see a move back towards parity although the daily charts don’t really suggest such a move at this stage.

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 Bullish –Prefer to buy dips Medium Term: Prefer to buy dips
FX Charts Position: Long – SL @ 0.9875.
Resistance Support
1.0037 27 Oct high 0.9900 Minor
1.0017 9 Nov high 0.9879 Session low
0.9986 13 Nov high 0.9845 15 Nov low
0.9970 14 Nov high 0.9830/35 23 Oct low/100 WMA
0.9940 Session high 0.9800 (38.2% of 0.9420/1.0037)

AUDUSD: 0.7590
Preferred Strategy: Aside from some choppy trade after yesterday’s domestic jobs data, the Aud had an uninspiring session confined mostly to a 30 point range below 0.7600.

As before, near term support arrives at 0.7570 (July low), which was also briefly tested yesterday, below which would target Fibo support at around 0.7515. As I said before, I suspect the Aud$ is building a bear flag and is likely to see 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 0.7600/10, at 0.7620 and at 0.7650. I doubt we go close but if wrong, above here could then revisit the 13 Nov high of 0.7665, above which would then allow room to move towards 0.7675/80 and possibly 0.7695/0.7700.

In the absence of any data, a quiet day might be expected and the outlook remains unchanged.

Sell AudUsd @ 0.7600. SL @ 0.7635, TP @ 0.7515

24 Hour: Neutral  – Prefer to sell rallies Medium Term: Neutral –Mildly Bearish
FX Charts Position:    Short
Resistance Support
0.7693 10 Nov high/9 Nov high/Descending trend resistance 0.7568 Session low
0.7665 13 Nov high /200 HMA 0.7550 Minor
0.7649 14 Nov high 0.7520 (76.4% of 0.7328/0.8124)
0.7625 Minor 0.7500 Minor
0.7609 Session high 0.7475 Minor

Economic data highlights will include:

New Motor Vehicle Sales

NZDUSD: 0.6850
Preferred Strategy: The Kiwi has been heavy on Thursday but has recovered from session lows of 0.6835 to sit near 0.6860 ahead of the NZ Oct mfg PMI and the Q3 PPI which are due shortly.

The momentum indicators are mixed and we may be in for another choppy day although I still prefer to trade from the short side.

On the downside, the initial support now lies at 0.6830/35, 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, the initial resistance will be seen at 0.6880 ahead of 0.6900 and then at 0.6920 and 0.6935. The hourly charts are attempting to point a little higher so a small upside squeeze would not really surprise although I still prefer to sell into strength..

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.

Sell NzdUsd @ 0.6880. SL @ 0.6915, TP @ 0.6770

24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
FX Charts Position: Flat
Resistance Support
0.6957 10 Nov high 0.6835 Session low
0.6935 13 Nov high 0.6832/30 30 Oct low /31 Oct low
0.6918 15 Nov high 0.6817 11 May low/27 Oct low
0.6905 200 HMA 0.6800 Minor
0.6885 Minor 0.6770 Minor

Economic data highlights will include:                                                                                   

Business PMI, PPI