2 Mar: Forecast: FX US$/Majors

By | March 2, 2017


EURUSD: 1.0546

The Euro is more or less unchanged after a choppy session, confined to a range of 1.0513/88, in which it took out some minor support in the 1.0540/50 area but was unable to carry on to test the 1.0490/1.0500 area.

This leaves the outlook unchanged. The momentum indicators remain pretty much neutral and a nimble stance is required although the dailies may be hinting of further attempts to the downside in the sessions ahead. Near term support will arrive at the session low below which could then see a move towards 1.0500 and the 1.0493 22 Feb low. Beneath that there is not too much support ahead of the 11 January low of 1.0453. A return to the topside will find offers today at 1.0590/0600 and then again at 1.0630/35 although this looks unlikely today. If wrong, then above here would allow a run towards 1.0675/80and eventually on to 1.0700 and above. Look for another choppy session, probably confined to but with a mild downside bias

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.0700 22 Feb high 1.0535 Minor
1.0678 16 Feb high 1.0513 Session low
1.0630/35 1 Mar high/(76.4% of 1.0678/1.0493) 1.0493 22 Feb low
1.0600 Minor 1.0453 11 Jan low
1.0588 Session high 1.0420 Minor

Economic data highlights will include:

German Import/Export Index, EU Unemployment CPI, PPI, US Jobless Claims, ISM NY Index

USDJPY: 113.66

Ongoing hawkish Fed speak with regards to a likely rate hike underpinned US$Jpy on Wednesday as it recovered strongly from the previous day’s lows of 111.68, to reach 114.04 today, before settling near 113.65.

The 4 hour charts are positive and the dailies also seem to be picking up minor positive momentum so if we can make further progress, then on the topside the initial resistance lies at 114.00/05 which should be strong. Above here would see further sellers as we approach the descending trend resistance at 114.50, a break of which could then see an acceleration towards the recent trend high of 114.95. On the downside, the initial support sits at 113.50 and at 113.10. Under here looks unlikely today, but further levels to watch would be at 112.85 and 112.60.

24 Hour: Prefer to buy dips Medium Term: Neutral
                                         Resistance Support
114.95 15 Feb high 113.48 (23.6% of 111.68/114.04)
144.50 Descending trend resistance 113.12 (38.2% of 111.68/114.04)
114.15 (61.8% of 114.95/111.68) 112.85 (50% pivot of 111.68/114.04)
114.04 Session high 112.60 (61.8% of 111.68/114.04)
113.80 Minor 112.25 (76.4% of 111.68/114.04)

Economic data highlights will include:

Nikkei Mfg PMI

GBPUSD: 1.2286

Cable remains under pressure due to the ongoing Brexit negotiations, triggering stops at 1.2380 and heading lower to reach 1.2280 before a dead-cat bounce to finish at 1.2300.

The 4 hour momentum indicators are pointing lower, and while the dailies are flat they might be picking up some downside momentum so it appears as though Cable will stay under pressure. If so, below the session low would open the way to strong support at 1.2260, but below which there is little to stop it heading towards 1.2200 and lower, towards 1.2150. On the topside, the initial resistance will be seen at 1.2350 and again at 1.2385/90, which might prove a decent sell area if we see it. If wrong, then above here would then head back above 1.2400 and eventually to 1.2460, albeit unlikely today. Prefer to trade from the short side, but with tights stops in place.

24 Hour: Prefer to sell rallies Medium Term: Neutral
Resistance Support
1.2458 (61.8% of 1.2570/1.2280) 1.2300 Minor
1.2420 (50% pivot of 1.2570/1.2280) 1.2280 Session low
1.2390 (38.2% of 1.2570/1.2280) 1.2260 (61.8% of 1.1980/1.2706)
1.2385 100 DMA/55 DMA 1.2230 Minor
1.2348 (23.6% of 1.2570/1.2280) 1.2200 Minor

Economic data highlights will include:         

UK Mfg PMI, Consumer Credit, Nett Lending to individuals

USDCHF: 1.0089

US$Chf  has traded a 1.0052/1.0128 high, making a new 10 day high but finishing the session towards the lows and leaving the neutral stance unchanged.

The momentum indicators are mixed, suggesting a fairly nimble stance again today.  On the topside, resistance will be seen once again at 1.0100 (minor) and then at the session high of 1.0128 ahead of 1.0140, the 22 Feb high and also the rising daily cloud top. Beyond there will see decent sellers at 1.0160 and at 1.0200, although this looks likely to be delayed for a while. On the downside, back below the session low, support will be seen at 1.0000/10, a break of which could see a run back to the 17 Feb low of 0.9965 and then towards 0.9900 although possibly not today. The preference remains to buy dips, with a SL placed sub 1.0000.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance Support
1.0200 Minor 1.0052 Session low
1.0160 (61.8% of 1.0343/0.9861) 1.0025 Minor
1.0140 22 Feb high /Daily cloud top 1.0008 1 Mar low
1.0128 Session high 0.9965 17 Feb low
1.0100 Minor 0.9950 Minor

Economic data highlights will include:

Retail Sales

AUDUSD: 0.7677

AudUsd has had a choppy session (0.7636/99) going nowhere fast as it remains trapped in the broad 0.7600/0.7700 range that has contained the pair over the last month or so.

This leaves the outlook unchanged and, technically the short term momentum indicators are mixed and require a neutral stance. On the downside, below minor support at 0.7660/65 and 0.7650 would target the session low of 0.7636, a break of which would see a run towrds0.7600/05. On the topside, resistance will again be seen at 0.7700/10 and 0.7720 above which could then see a move 0.7750. A break of this level, doubtful today I suspect, could then head to the November high of 0.7777. Another rangebound session below 0.7700 again appears to be in store, but I still prefer to trade from the short side given that the dailies look mildly heavy and a March Fed rate hike is looking increasingly possible. The Building Permits and the Trade Balance will be minor risk events today.

24 Hour: Range trade – Prefer to sell rallies Medium Term: Neutral – Turning  mildly bearish
Resistance Support
0.7750 Descending trend resistance 0.7665 Minor
0.7740 23 Feb high 0.7650 Minor
0.7719 24 Feb high 0.7636 16 Feb low/Session low
0.7707 28 Feb high 0.7617 14 Feb low
0.7699 Session high 0.7602 (23.6% of 0.7160/0.7740)

Economic data highlights will include:

Building Permits (Jan), Trade Balance (Jan)

NZDUSD: 0.7145

The Kiwi fell heavily from the previous session highs on 0.7237, more or less in a straight line, to a low of 0.7100 ahead of a late bounce in US trade, to finish the day at 0.7145.

The momentum indicators remain mixed and so a cautious stance is required. While the short term momentum indicators look a little more supportive the dailies still look heavy, so selling into strength remains the preferred plan. On the topside, the initial resistance will be seen at 0.7165 and again at 0.7185, above which could then see a run to 0.7200/10. On the downside, back below the various Moving Averages (200/100/55 DMAs) would allow a return to 0.7100. Should we break below this, then I would be looking for a run back towards the rising trend support at 0.7070, below which there is a black hole of support ahead of 0.7000.

24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
0.7246 23 Feb high 0.7140 200 DMA
0.7237 (50% of 0.7375/0.7133) 0.7125/15 100 DMA /55 DMA
0.7205 (38.2% of 0.7375/0.7100) 0.7100 Session low
0.7185 200 HMA 0.7070 Rising trend support
0.7165 (23.6% of 0.7375/0.7100) 0.7030 Minor

Economic data highlights will include:

Terms of Trade