18 Dec: Forecast: FX: US$/Majors + trade ideas

By | December 18, 2017


EURUSD: 1.1750
€/Usd has traded a choppy 1.1818/1.1750 range on Friday, initially heading higher but then ending on the lows, with the dollar underpinned by the hopes at the tax bill will soon be passed.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:  For now I prefer to remain short Euro although the rising trend support at 1.1735 is close by and may contain the downside. A break, which the daily charts suggest is possible, would allow a run back towards 1.1705/15, below which could see an acceleration towards 1.1650/80. On the topside, 1.1800 will continue to act as resistance.

For Monday, look for a range of 1.1780/1.1680 with the EU CPI likely to be the key driver.

Resistance Support
1.1865 (61.8% of 1.1960/1.1717) 1.1750 Friday low
1.1847 6 Dec high 1.1735 Rising trend support
1.1811 Friday high 1.1716/12 12 Dec low/21 Nov low
1.1800 100 DMA 1.1707 (61.8% of 1.1553/1.1943)
1.1785 200 HMA 1.1685 Minor

Economic data highlights will include:                                      

M:  EU CPI, BuBa Monthly Report, NAHB Housing Market Index

T:    German IFO Business Climate/Expectations, EU Construction Output, US Building Permits, Housing Starts, Current Account API Weekly Crude Oil Stock Inventory

W: German PPI, US Existing Home Sales, EIA Crude Oil Stocks Weekly Change

T: US Philadelphia Fed Mfg Survey, Chicago Fed National Activity Index, Jobless Claims, Q3 GDP, US Personal Consumption/Expenditure, House Price Index

F: German Consumer Confidence Survey, US Government Shutdown limit, US Personal Consumption/Expenditure/ Income Spending – Index, Personal Income/Spending Durable Goods Orders, Rts/Michigan Consumer Sentiment Index, Kansas Fed Mfg Activity, New Home Sales

USDJPY: 112.61
US$Jpy bounced off support at 111.95/112.00 to finish Friday near session highs of 112.73, underpinned by the rise in US stocks.
1 hour/4 hour indicators: Turning higher Daily Indicators: Neutral Weekly Indicators:  Neutral
Preferred Strategy:  Although the daily charts remain neutral, the short term momentum indicators point higher at the start of the week and if 112.75/85 can be overcome we could then see a return to 113.00 and above, where 113.20/25 should see sellers ahead of the December high of 113.75.

Dips could see a run back to 112.00/20 but buying into short term weakness currently seems to be the plan, with a tight SL placed below 111.90

Buy US$Jpy @ 112.20. SL @ 111.85, TP @ 113.25

Resistance Support
113.75 12 Dec high 112.50 Minor
113.57 14 Dec high 112.30 Minor
113.30 Minor 112.02 Friday low
113.00 Minor 111.95 (61.8% of 110.83/113.75)/6 Dec low
112.73 Friday high 111.52 (76.4% of 110.83/113.75)

Economic data highlights will include:

M:  Trade Balance

T:    All Industry Activity Index

W: BOJ Interest Rate Decision, Press Conference, Statement



GBPUSD: 1.3317
Sterling headed lower on Friday, not helped by the dovish BOE outlook or the Brexit headlines coming from the EU. After an early peak of 1.3447 Cable got hit hard in falling to 1.3301, finishing the week near the lows.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower?


Weekly Indicators:  Turning higher?
Preferred Strategy:  With the daily charts beginning to look heavy, further losses may be in store and below nearby support at 1.3290/00 could see a decline towards 1.3230 and then to the major rising trend support at around 1.3200.

Minor resistance now lies at around 1.3350/70 and selling into strength would seem to be the plan although I remain neutral due to the choppy, headline driven price action.

Resistance Support
1.3447 Friday high 1.3301 Friday low
1.3417 Weekly cloud top 1.3292 (50% pivot of 1.3039/1.3549)
1.3390 200 HMA 1.3260 Minor
1.3375 Minor 1.3232 (61.8% of 1.3039/1.3549)
1.3350 Minor 1.3195 Rising trend support /100 DMA

Economic data highlights will include:

M:  CBI Distributive Trade Survey – Orders (Dec)


W: CBI Distributive Trade Survey – Realised (Dec), BOE Carney Speech

T: UK Consumer Confidence, PSNBR


USDCHF: 0.9903
US$Chf traded a choppy range on Friday, climbing sharply to a high of 0.9933 before giving up some of the gains to finish the week at 0.9900.
1 hour/4 hour indicators: Mixed. Daily Indicators: Neutral Weekly Indicators:  Neutral
Preferred Strategy:  The dailies are neutral, and  the short term charts are mixed so further choppy trade looks likely, although the 4 hour charts do look mildly positive so a return towards 0.9930 would not really surprise, above which would then find sellers at 0.9965 ahead of parity. I don’t think we get there today and trading a range of 0.9880/0.9950 may cover it for Monday.
Resistance Support
1.0000 Minor 0.9873 Friday low
0.9965 (76.4% of 0.1137/0.9816) 0.9841 14 Dec low
0.9950 Minor 0.9835 100 WMA /5 Dec low
0.9933/35 Friday high  /12 Dec high 0.9827 (61.8% of 0.9742/0.9977)
0.9905 200 HMA 0.9790 (76.4% of 0.9742/0.9977)

AUDUSD: 0.7640
 AudUsd is trading lower after reaching high of 0.7694 in Europe on Friday, where the 200 DMA halted further progress. Now at 0.7640, the short term momentum indicators are turning lower so further downside may lie ahead today. Watch for the MYEOF which may create some exaggerated volatility.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher? Weekly Indicators:  Turning lower
Preferred Strategy:   The short term indicators are now pointing lower, and a run back towards 0.7620/30 would not surprise, below which would allow a run back to 0.7600 and possibly to 0.7575/80. The dailies still currently look positive but as I said previously, now that US rates are at parity with Australian rates I do not really think that the Aud has too much upside from here, and I would be looking for levels to sell into strength.

Resistance today lies at 0.7665/70

Sell AudUsd @ 0.7670. SL @ 0.7705, TP @ 0.7580

Resistance Support
0.7729 2 Nov high 0.7637 Friday low
0.7700 7 Nov low 0.7615 Minor
0.7694 Friday high/200 DMA 0.7600 Minor
0.7680 Minor 0.7575 200 HMA
0.7665 Minor 0.7550 Minor

Economic data highlights will include:

M:  MYEFO, New Motor Vehicle Sales, China House Price Index

T:    WBC Leading Economic Index, RBA Minutes, RBA Bulletin




NZDUSD: 0.6991
The Kiwi made a new 2 month high of 0.7033 on Friday although it closed the week back below 0.7000 and may have put in a near term top judging by the look of the short term momentum indicators.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  The daily momentum indicators still look mildly positive  on Monday although the short term momentum indicators are now pointing lower and a move back towards 0..6975 and even to 0.6950 would not surprise. Below here may see 0.6925, albeit possibly not today. As before, note that the Kiwi has a reverse HS formation with a possible target of around 0.7100 so buying dips may be the more medium term plan.
Resistance Support
0.7115 100 DMA 0.6978 Friday low
0.7100 200 DMA 0.6965 Minor
0.7075 (38.2% of 0.7557/0.6783) 0.6952 (38.2% of 0.6822/0.7033)
0.7033 Friday high /(38.2% of 0.7434/0.6783) 0.6927 (50% of 0.6822/0.7033)
0.7010 Minor 0.6903 (61.8% of 0.6822/0.7033)

Economic data highlights will include:

M:  WBC Consumer Survey, ANZ Activity Outlook

T:   WBC Consumer Survey, ANZ Activity Outlook, Global Dairy Trade Index

W: NZ Visitor Arrivals, Current Account, Trade Balance