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

By | October 19, 2017


EURUSD: 1.1787
Preferred Strategy:  The Euro remained heavy through Europe, dropping to 1.1729 ahead of a bounce that sees it close near session highs of 1.1804. A close above 1.1800 would have meant a bullish outside day but this has just been avoided and keeps the bearish outlook intact.  If we do see another topside squeeze, the major resistance is at the neckline of the large Head/Shoulders formation which appears to be building, with the neckline at 1.1880.  This level ties in with the major descending trend resistance and should see good selling interest, if we get there. The dailies are now pretty flat so some caution is warranted on the downside and the 4 hour charts do point a little higher but as long as we stay under 1.1880 I am happy to be short, with the need to keep a tight SL in place above 1.1900. The H/S objective is at around 1.1250.

Sell EurUsd @ 1.1850. SL @ 1.1910, TP @ 1.1700.

24 Hour: Mildly Bullish – Prefer to sell rallies Medium Term: Mildly Bearish
Resistance Support
1.1879/82 12 Oct high/(50% of 1.2092/1.1669)/Descending trend resistance 1.1750 Minor
1.1874/70 14 Oct high/Neckline resistance 1.1729 Session low
1.1840 Minor 1.1720 (76.4% of 1.1668/1.1880)
1.1819 16 Oct high 1.1700 Minor
1.1805 Session high 1.1661 17 Aug low

Economic data highlights will include:                                                      

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

USDJPY: 112.93
Preferred Strategy: US$Jpy has  headed higher on Wednesday, underpinned by the solid day in US stocks, and has reached a high of 113.04 with the 4 hour charts suggesting prospect of more gains ahead. 113.20 will be decent resistance, but above there 113.43 (6 Oct high), 114.00 and 114.49 (11 July high) would eventually beckon. The dailies currently look less certain of the upside, and on the downside, support today should arrive at around 112.60 and then at the 200 HMA at 112.30. The session low was at 112.12 which looks fairly safe, but back below 112.00, good support would be at 111.60/70.  Buying dips is preferred today although further out, with the dailies looking less positive, further range trade near current levels may be in store.

Buy US$Jpy @ 112.75. SL @ 112.15, TP @ 113.45.

24 Hour: Mildly Bullish Medium Term: Neutral
Resistance Support
114.00 Minor 112.75 Minor
113.60 Minor 112.60 Minor
113.43 6 Oct high 112.32 200 HMA
113.20 Descending trend resistance 112.03 17 Oct low
113.04 Session high 111.64 16 Oct low

Economic data highlights will include:                                                                           

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

GBPUSD: 1.3201
Preferred Strategy:  GbpUsd managed to bounce from its 1.3139 session low to finish close to 1.3200, underpinned by better than expected UK earnings figures and will now look to the UK Retail Sales for guidance and another hint as to what to expect from the BBOE at the November meeting. UK PM May will be speaking at the EU Summit and is expected to pitch for a soft Brexit. Technically, t he momentum indicators are generally mixed/flat so a neutral stance is required today and I prefer to stand aside, although the hourlies do point to the chance of another topside squeeze, where a break of 1.3210 is needed to allow the chance of a move towards 1.3250, possibly to 1.3280.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.3337 14 Oct high/100 WMA 1.3170 Minor
1.3311 16 Oct high 1.3150 Minor
1.3286 17 Oct high 1.3139 Session low
1.3245 100 HMA 1.3120 12 Oct low
1.3211 Session high /200 HMA 1.3100 Minor

Economic data highlights will include:

UK Retail Sales, EU Summit – UK PM May speaking

USDCHF: 0.9815
Preferred Strategy:  US$Chf has had a solid session, with the Chf under pressure, allowing a good move higher in EurChf which has moved up to 1 month highs, currently at 1.1575. US$Chf looks as though it can build on its gains and if we see a close above 0.9835, then we could progress towards  0.9880 and then to 0.9900+. The downside will be underpinned today at around 0.9665/75 and buying dips is preferred.

Buy US$Chf @ 0.9785. SL @ 0.9735, TP @ 0.9870.

24 Hour: Neutral Medium Term: Prefer to buy dips
Resistance Support
0.9940 Minor 0.9765 200 HMA
0.9900 Minor 0.9750 Minor
0.9880 (50% pivot of 1.0343/0.9420) 0.9729 16 Oct low
0.9850 200 WMA 0.9705 14 Oct low
0.9835 200 DMA/(61.8% of 1.0099/0.9420)/6 Oct high/Session high 0.9676 2 Oct low /(38.2% of 0.9420/0.9836)

Economic data highlights will include:                                                                                                                

T: Trade Balance

AUDUSD: 0.7846
Preferred Strategy:  The Aud has had a similar session to yesterday, falling to 0.7818 before recovering; to finish just below the bas of the daily cloud, with today’s direction to be provided by the local Unemployment data and the host of China data. The 4 hour charts still suggest that selling into strength seems to be 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 a choppy range today, again confined to 0.7800/0.7900.

Sell AudUsd @ 0.7880. SL @ 0.7915, TP @ 0.7700.

24 Hour: Prefer to sell rallies Medium Term: Neutral
Resistance Support
0.7940 Minor 0.7830 Minor
0.7915 (50% pivot of 0.8102/0.7732) 0.7818/16 Session low-17 Oct low/14 Oct low
0.7897 14 Oct high 0.7795 100 DMA
0.7889 16 Oct high 0.7770 11 Oct low
0.7857 Session high 0.7750 Minor

Economic data highlights will include:                                      

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

NZDUSD: 0.7154
Preferred Strategy:   The Kiwi fell to 0.7119 before bouncing mildly to finish at 0.7155 (200 DMA), with the short term momentum indicators hinting that we could head a little higher still.  Overall though, 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. On the downside, we should be looking for a sustained break below the session low towards 0.7100 and then maybe towards 0.7075, albeit probably not today. Neutral. Wait for Winston Peters to announce which way he is going after the NZ election.

Overall prefer to sell rallies so possibly Sell NzdUsd @ 0.7185. SL @ 0.7215, TP @ 0.7085.

24 Hour: Prefer to sell rallies Medium Term: Neutral
Resistance Support
0.7245 (50% of 0.7434/0.7058) 0.7130 Minor
0.7210 17 Oct high 0.7118 Session low
0.7200 (38.2% of 0.7434/0.7058) 0.7100 Minor
0.7185 Minor 0.7077 12 Oct low
0.7155 200 DMA 0.7055 10 Oct low