23 Feb: Forecast: US$ pairs

By | February 23, 2017


EURUSD: 1.0571

Having traded down to 1.0493 in Europe, the Euro has turned higher after the release of the FOMC Minutes, currently near the session high of 1.0572.

The short term momentum indicators now look a little more positive, and on the topside, minor resistance will be seen at 1.0585 ahead of 1.0605/10 and 1.0675/80.  Above here looks unlikely today, but we could potentially see a move back to 1.0700 and above. Near term support will arrive as we approach 1.0500 and the 1.0493 session low, below which there is not too much support ahead of the 11 January low of 1.0453. Below that there is again too much to support it ahead of the 3 Jan low of 1.0340 although that will be for another day. For today, with the 1 and4 hour charts looking a little more positive, a squeeze back towards 1.0600/30 would note really surprise but selling into rallies remains the preferred medium term theme.

24 Hour: Mildly bullish Medium Term: Mildly bearish
Resistance Support
1.0678 16 Feb high 1.0525 Minor
1.0635 (76.4% of 1.0678/1.0493) 1.0493 Session low
1.0607 (61.8% of 1.0678/1.0493) 1.0480 Minor
1.0585 (50% of 1.0678/1.0493) 1.0453 11 Jan low
1.0572 Session high 1.0420 Minor

Economic data highlights will include:

German Consumer Confidence, GDP, US Jobless Claims, House Price Index, Kansas Fed Mfg Activity, EIA Crude Oil Stocks Weekly Change

USDJPY: 113.03

US$Jpy has traded a choppy session (113.72/112.90), covering most of that following the release of the FOMC Minutes and currently sits towards the lower end, above 113.00.

Both the  4 hour and the daily charts still give little hint either way so it could end up being another choppy session contained within the 113/114 range, although at the end of the day the dollar does feel a little heavy. If that proves correct,  then below the session low could see a run back towards last week’s low of 112.60 below which would open the way to 111.35/40 and to 111.00 although this seem unlikely.  On the topside, minor resistance lies at 113.50 ahead of the 113.72 session high. Above this would see sellers at 114.00/05 and then at 114.40 ahead of the recent trend high of 114.95. If 114.95 is taken out – unlikely today – there is little to stop the dollar heading on to 115.15/20, above which 115.60 would attract.  A choppy session looks the most likely outcome. Buying dips towards 112.60 might be a plan, with SL placed under 112.35.

24 Hour: Neutral Medium Term: Prefer to buy dips
Resistance Support
114.40 (76.4% of 114.95/112.61) 112.90 Session low
114.04 (61.8% pivot of 114.95/112.61) 112.78 20 Feb low
113.77/80 21 Feb high/(50% of 114.95/112.61) 112.60 17 Feb low
113.72 Session high 111.38 (76.4% of 111.58/114.95)
113.50 200 HMA 111.00 Minor

Economic data highlights will include:

Foreign Bond/Stocks Investment, Coincident Index, Leading Economic Index

GBPUSD: 1.2461

Sterling has had a choppy range on Wednesday (1.2417/1.2507) leaving the outlook unchanged

Further choppy range looks set to continue although the short term momentum indicators do look mildly positive at this stage. Minor resistance lies at 1.2480 above which could revisit the day’s high of 1.2507. Beyond this could eventually see a run back to 1.2570/80, which would provide decent resistance albeit unlikely to be seen today.  On the downside, support will be seen at the 1.2420/00 area, below which could then head back to the 7 Feb, 1.2345 low. Look for 1.2400/1.2500 to cover it today.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.2570 (61.8% of 1.2700/1.2346) 1.2440 Minor
1.2548 14 Feb high 1.2416 Session low
1.2523 16 Feb high 1.2410/01 100 DMA /21 Feb low
1.2507/10 Session high /17 Feb high 1.2387/82 17 Feb low /16 Feb low
1.1480 Minor 1.2345 Daily Kijun/7 Feb low

USDCHF: 1.0091

US$Chf headed up to a high of 1.0140 today before giving up some ground and then accelerating lower on the release of the FOMC minutes to finish the day just above the session lows of 1.0077.

While the dailies also look constructive, the short term momentum indicators are now pointing a little lower so a test of the lows would seem possible, below which we might head back towards minor support at 1.0040/1.0020 ahead of the 1.000 pivot. Below here looks unlikely, but if wrong we could see a run back to the 17 Feb low of 0.9965.  On the topside, resistance will be seen at 1.0100/10 ahead of the 1.0140 session high. Beyond there will see decent sellers at 1.0160 and at 1.0200, although this looks likely to be delayed for a while. Buying dips still seems to be the plan given that the dailies look positive, but keep a SL below 1.0000.

24 Hour: Neutral Medium Term: Prefer to buy dips
Resistance Support
1.0250 Minor 1.0077 Session low
1.0200 Minor 1.0050 200 HMA
1.0160 (61.8% of 1.0343/0.9861) 1.0023 21 Feb low
1.0140 Session high 1.0010 20 Feb low
1..0120 Minor 0.9965 17 Feb low

AUDUSD: 0.7707

The Aud has retained a bid tone for much of the session, since the RBA governor Lowe cast doubt on any further rate cuts, and since the release of the FOMC Minutes it has spiked to a new session high of 0.7715, currently trading nearby.

The short term momentum indicators beginning to point a little higher, so further gains, towards 0.7730/50 could be on the cards. 0.7750 should provide a strong cap, but if wrong look for a run towards the November high at 0.7777. On the downside, the initial support will again arrive at 0.7675/80 and then at 0.0.7650, below which could then see a move to 0.7635 and 0.7600/10 although this seems a little doubtful.  Today will look to the CAPEX figures for direction and a positive figure could see the Aud test the major resistance levels.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
0.7800 Minor 0.7690 Minor
0.7777 8 Nov high 0.7675 200 HMA
0.7750 Descending trend resistance 0.7649 21 Feb low
0.7731 16 Feb high 0.7636 16 Feb low
0.7714 Session high 0.7617 14 Feb low

Economic data highlights will include:

Private Capital Expenditure (Q4)

NZDUSD: 0.7196

The Kiwi has had a rangebound session (0.7145/90) leaving the outlook unchanged. Most of the day was spent near the lows although a spike higher was seen after the release of the FOMC Minutes

The short term momentum indicators are now pointing a little higher, suggesting a possible test of 0.7200, and if we get above there we could head back to 0.7220 and to 0.7240/45, which if seen would provide a decent sell opportunity. On the downside, the daily indicators remain bearish so selling into near term strength is still preferred, looking for a run back towards the session low, below which would test 0.7130 and the very strong support at 0.7120/15. At some stage, I suspect this will give way, in which case we should then look for a run towards 0.7050/0.7000. That won’t be today though, and the upside looks a little more likely to come under pressure.

24 Hour: Mildly bullish – Prefer to sell rallies Medium Term: Prefer to sell rallies
Resistance Support
0.7255 (50% of 0.7375/0.7133) 0.7175 Minor
0.7242 16 Feb high 0.7145 Session low
0.7220 17 Feb high 0.7129 21 Feb low
0.7200 Minor 0.7120/15 200 DMA/100 DMA/55 DMA Converging/(50% of 0.6857/0.7375)
0.7190 Session high 0.7100 Minor