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

By | October 18, 2017


EURUSD: 1.1766
Preferred Strategy:  The Euro has bounced from its lows and in the short term we could see a squeeze back towards 1.1800 although the 4 hour charts remain heavy and any near term rally would seem to be a sell opportunity for another move to the 1.1735 lows, and then possibly to test 1.1700 and the mid August lows at 1.1660. The dailies look neutral and in the absence of any major data it may be a tight session although there are plenty of CB speakers coming up. Note the larger Head/Shoulders formation that appears to be building: if so, target 1.1235.

Sell EurUsd @ 1.1800. SL @ 1.1855, TP @ 1.1700

24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
Resistance Support
1.1879/82 12 Oct high/(50% of 1.2092/1.1669) 1.1750 Minor
1.1874/70 14 Oct high/Neckline resistance 1.1735 Session low
1.1840 Minor 1.1720 (76.4% of 1.1668/1.1880)
1.1819 16 Oct high 1.1700 Minor
1.1799 Session high 1.1661 17 Aug low

Economic data highlights will include:                                                      

Extraordinary EU Economic Summit, EU Construction Output, US Building Permits, Housing Starts, Beige Book ,EIA Crude Oil Stocks Weekly Change. Speeches; Draghi, Angeloni/Praet/Coeure (ECB) and Kaplan/Dudley (Fed).

USDJPY: 112.20
Preferred Strategy:  US$Jpy has had a tight 40 point range and further consolidation in the 112.00/113.00 may be in store. The hourly indicators look a little heavy but the 4 hour charts look positive and if the session high at 112.47 can be taken out, then 112.75 would be the first real hurdle ahead of 113.00 and 113.43 (6 Oct high). On the downside, back below 112.00, good support now seen at 111.60/70, and buying dips is preferred today. Further out, the dailies look less positive, so further range trade between 111.60/113.00 may be in store for the next few days..
24 Hour: Prefer to buy dips. Medium Term: Neutral
Resistance Support
113.20 Minor 112.03 Session low
113.00 Minor 111.64 16 Oct low
112.74 9 Oct high 111.46 25 Sept low
112.51 12 Oct high 111.30 Minor
112.47 Session high 111.10 (38.2% of 107.32/113.43) /100 DMA

GBPUSD: 1.3187
Preferred Strategy:  GbpUsd is lower again at the end of Tuesday trade, despite the solid CPI figure but weighed down by the lack of progress in the Brexit negotiations. The momentum indicators are generally mixed/flat so a neutral stance is required today ahead of the UK Unemployment data which will drive the direction.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.3337 14 Oct high/100 WMA 1.3170 Minor
1.3311 16 Oct high 1.3154 Session low
1.3286 Session high 1.3120 12 Oct low
1.3230 Minor 1.3100 Minor
1.3195 200 HMA 1.3075 Minor

Economic data highlights will include:

UK Unemployment, Inflation Report Hearing

USDCHF: 0.9781
Preferred Strategy:  US$Chf has been choppy again on Tuesday, briefly taking out 0.9800 but unable to hold on to the gains and is now pretty much back where it started. While the hourlies are a little heavy, the 4 hour charts look constructive ho holding on to longs is favoured looking for a retest of the highs and perhaps 0.9835-50 although in the absence of any major data it may end up being another tight session. Support now seen at around 0.9740/50.

Buy US$Chf @ 0.9750. SL @ 0.9690, TP @ 0.9850

24 Hour: Prefer to buy dips Medium Term: Mildly Bullish
Resistance Support
0.9900 Minor 0.9729 16 Oct low
0.9880 (50% pivot of 1.0343/0.9420) 0.9715 Minor
0.9850 200 WMA 0.9705 14 Oct low
0.9835 200 DMA/(61.8% of 1.0099/0.9420) /6 Oct high 0.9676 2 Oct low /(38.2% of 0.9420/0.9836)
0.9807 Session high 0.9642 25 Sept low

AUDUSD: 0.7845
Preferred Strategy:  The Aud has bounced off the 0.7817 session low and could see further minor gains ahead although the 4 hour charts suggest that selling into strength still remains the plan, looking for an eventual move toward 0.7800. The dailies still look positive though, so I suspect that we could well be confined to 0.7800/0.7900 until tomorrow’s Australian jobs data. Note that the Aud is now sitting right on the base on the daily cloud (chart below) late in the session having earlier made a clean break lower. See how this unfolds over the next day or two.
24 Hour: Mildly Bearish Medium Term: Neutral
Resistance Support
0.7940 Minor 0.7830 Minor
0.7915 (50% pivot of 0.8102/0.7732) 0.7816 Session low/14 Oct low
0.7897 14 Oct high 0.7795 100 DMA
0.7889 16 Oct high 0.7770 11 Oct low
0.860 Minor 0.7750 Minor

NZDUSD: 0.7170
Preferred Strategy:  Having spiked up to 0.7210 on the NZ CPI reading yesterday, the Kiwi was unable to hold on to the gains and slid towards its lows (0.7146) after the release of the milk auction, which saw the GDT PI fall by -1.0% & WMP -0.5% on lower volumes sold. It looks as though a bearish key day reversal has just been avoided and given the lack of data it may be a fairly tight session ahead. The momentum indicators are a little mixed so a neutral stance is required, but once again, selling into strength towards 0.7200, with a fairly tight SL (30pips?) seems to be the plan, but looking for a sustained break below the 200 DMA (0.7155) towards 0.7100.
24 Hour: Prefer to sell rallies 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) 0.7146 Session low
0.7210 Session high 0.7120 14 Oct low
0.7200 (38.2% of 0.7434/0.7058) 0.7077 12 Oct low
0.7185 Minor 0.7055 10 Oct low