21 July: Forecast: FX: US$/Majors

By | July 21, 2017

 

EURUSD: 1.1633
24 Hour Outlook: Prefer to buy dips Medium Term: Prefer to buy dips.
Preferred 24-hour Strategy: Prefer to buy dips towards 1.1550 with SL sub 1.1475 looking for a move towards 1.1700. In the absence of any data, it could end up being a tight session.

On the topside, having taken out the May 2016 high of 1.1616 in heading up to a high of 1.1657, it appears that there is little to now stop the Euro heading on to the August 2015 spike high of 1.1713 but iIt looks as though we are heading there, above which will start running into strong resistance in the 1.1730/1.1800 area. A break of 1.1800 could then mean that we on our way to 1.2000 and potentially to 1.2150 although I am not sure who would want to be buying the Euro at such dizzy levels.

With all the momentum indicators aligned to point higher on Friday the downside does look a little limited but back below 1.1600 could see a run back towards 1.1560/80 and then possibly to 1.1530 although this looks doubtful right now.

Further out, the session low was at 1.1478 and if/when we break under this we could then see a return to Monday’s low of 1.1435, to Friday’s  low  (1.1390) and the 13 July low of 1.1370, below which could then run towards 1.1345/50 and then to 1.1310/15.

Resistance Support
1.1800 200 WMA 1.1615 Previous high (3 May 2016)
1.1735 (38.2% of 1.3993/1.0340) 1.1585 Minor
1.1713 23 Aug 2015 high 1.1560 Minor
1.1675 Minor 1.1530 (23.6% of 1.1118/1.1657)
1.1657 19 July high 1.1478 Session low


USDJPY: 111.83
24 Hour Outlook: Prefer to buy dips Medium Term: Neutral -Look to buy dips @ 111.20/50
Preferred 24-hour Strategy: Prefer to buy dips.  SL under 111.00

US$Jpy is back at 112.00 after a volatile session following on from yesterday’s BOJ meeting, but with most of the action coming later in the day during European/US trade. The slide in the dollar, on the back of the Euro move, and then on the Trump story saw the dollar fall hard, to 111.48 although once again the strong support in the 111.30/70 area has so far kept the dollar afloat.

The momentum indicators are now looking mixed and another choppy session either side of 112.00 would not surprise. 111.70 will again see buyers, below which could then head back towards 111.50. Under there, the monthly cloud top is still at 111.30 and should also see strong bids. Below here though could then see a run to 111.00 and to 110.65.

On the topside, the daily charts are pointing still pointing lower, but if we do see a near-term bounce then 112.40 will provide the initial resistance ahead of 112.65/70 will provide the initial resistance. If we get back above the 17 July high of 112.85 further offers will arrive at 113.00 ahead of 14 July’s high at 113.57.

Resistance Support
113.00 (50% of 114.50/111.48) 111.72 100 DMA/200 DMA
112.85 17 July high /200 HMA 111.47 Session low
112.65 (38.2% of 114.50/111.48) 111.30/25 (50% of 108.12/114.49)/200 WMA
112.41 Session high 110.98 (61.8% of 108.80/114.49)
112.00 Pivot 110.64 16 June low


GBPUSD: 1.2973
24 Hour Outlook: Neutral Medium Term: Prefer to buy dips
Preferred 24-hour Strategy: Neutral

Despite better than expected UK Retail sales, Cable took an early dive from 1.3032  to 1.2932 before correcting a little to finish the day at 1.2970, not helped by the ongoing Brexit concerns.The PSNBR is due today (exp Gbp 4.3 bio).

The momentum indicators are a mixed again on Friday and a cautious stance is required, and while the short term indicators do point lower, the dailies remain flat, and while the US$ remains under pressure elsewhere Cable should remain relatively underpinned..

On the downside, below the 1.2933 low would find support at the Fibo level at 1.2920, below which could then see a move towards 1.2850 (38.2% of 1.2589/1.3125) although this remains some way off.

On the topside, back above the session high of 1.3032 would find offer at 1.3050/60. Beyond that, 1.3100 would see good sellers once again ahead of 1.3115/25, but above which there is little to stop Cable heading on towards 1.3200 and then to 1.3280. Above there would be increasingly bullish, possibly opening up the major Fibo pivot at 1.3420 (50% pivot of 1.5017/1.1821) although this currently remains over the horizon.

Resistance Support
1.3125 18 July high 1.2950 Minor
1.3100 Minor 1.2932 Session low
1.3061 18 July high 1.2920 (38.2% of 1.2589/1.3125)
1.3032 Session high 1.2900 Minor
1.3000 Minor 1.2870 Minor

Economic data highlights will include:

PSNBR



USDCHF: 0.9511
24 Hour Outlook: Neutral Medium Term: Prefer to sell rallies
Preferred 24-hour Strategy: Prefer to sell rallies towards 0.9550/60. SL above 0.9600.

US$Chf was volatile following the ECB/Trump outcomes, initially spiking up to 0.9620 before collapsing to a low of 0.9492.

The momentum indicators look heavy and if we move below the 0.9492 low, then there is little to stop the dollar heading towards 0.9440 and then to 0.9400, with little real support seen until 0.9330 (50% pivot of 0.8326/1.0343). A close below the 200 WMA today would reinforce this view.

On the topside, 0.9550 will provide the immediate resistance ahead of a possible return to 0.9600 and the session high of 0.9620.

Beyond there, unlikely today, could return to the 18 July high of 0.9634 beyond which could see a return to 0.9675/85 and possibly to last Friday’s high of 0.9700.

Resistance Support
0.9620 Session high 0.9492 Session low
0.9600 Minor 0.9475 Minor
0.9585 Minor 0.9442 3 May 2016 low
0.9555 200 WMA 0.9400 Minor
0.9530 Minor 0.9350 Minor


AUDUSD: 0.7955
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: Neutral – Range trade

After failing to hold the 0.7988 post-jobs data spike high yesterday, the Aud then fell hard, to a low of 0.7898 before another bounce after the ECB/Trump announcements, to close the day at 0.7955.

The momentum indicators are now mixed and a session of consolidation, within Thursday’s range would not really surprise although the RBAs Debelle will be speaking today and may attempt to talk the Aud lower.

A move back to the 0.7988 high could then see a run towards 0.8000 and then to 0.8015 although I don’t think we are going there today.

Minor support now arrives at 0.7935 and at 0.7920 would find stronger bids at 0.7900 and then again at 0.7875 and at 0.7840 although it seems unlikely to be seen down here today.

Resistance Support
0.8040 Minor 0.7935 Minor
0.8015 200 WMA 0.7920 Minor
0.8000 Psychological 0.7896 Session low
0.7987 Session high 0.7875 Minor
0.7975 200 MMA 0.7830 (23.6% of 0.7328/0.7987)


NZDUSD: 0.7400
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: Neutral

The Kiwi held on to support at 0.7335/40 in early Europe and rallied strongly after the Trump related headlines, clearing the November high of 0.7402 in extending to 0.7414

The short term momentum indicators all now look mildly more constructive and we could yet see move beyond the day’s high and on towards 0.7450. Beyond there would then allow a run back to the September high of 0.7485 although it is too early to look at this, but beyond which, the 100 MMA is at 0.7540.

On the downside the initial, minor, support lies at 0.7385 and at 0.7365 ahead of the session low of 0.7333. Below here, unlikely today, would then allow a run to 0.7315 and 0.7300. Below there could then re-open the way to 0.7260 and eventually to the 13 July low of 0.7245.

                                         Resistance             Support
0.7500 Minor 0.7385 Minor
0.7485 7 Sept high/(50% pivot of 0.8835/0.6125) 0.7365 Minor
0.7450 Minor 0.7333 Session low
0.7435 200 WMA 0.7310 200 HMA
0.7414 Session high 0.7275 (23.6% of 0.6815/0.7414)

Economic data highlights will include:

NZ Visitor Arrivals