22 Feb: Forecast: US$ pairs

By | February 22, 2017


EURUSD: 1.0548

The Euro has headed lower on the EU election concerns and hawkish Fed speak, testing the 1.0520/25 support area, which has so far held although, with the short term momentum indicators now looking heavy a break could see it head quickly to 1.0500, below which would then see an acceleration to the downside as 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. On the topside, minor resistance will be seen at 1.0580/85 ahead of 1.0600 and the session high of 1.0615. Above here looks unlikely today, but we could potentially see a move back to 1.0675/80. For today, look for 1.0580/1.0480 to cover it, with a preference to selling into rallies.

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
Resistance Support
1.0675/78 (50% of 1.0829/1.0520) /16 Feb high 1.0525/20 20 Feb low/15 Feb low
1.0632 20 Feb high 1.0500 Minor
1.0615 Session high 1.0480 Minor
1.0600 Minor 1.0453 11 Jan low
1.0575 Minor 1.0420 Minor

Economic data highlights will include:

German IFO Business Climate/Expectations, EU CPI, EU Targeted LTRO, US Existing Home Sales, FOMC Minutes, API Weekly Crude Oil Stock Inventory

USDJPY: 113.59

US$Jpy  has squeezed gradually higher, reaching 113.77 on Tuesday before drifting off a little but looking as though it could be the topside that sees further tests on Wednesday. The 4 hour indicators look positive although the dailies still give little hint either way so it could end up being another choppy session contained within the 113/114 range . On the topside, above the session high will 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. Below the session low of 113.07 could see a run back towards 112.80 and then to last week’s low of 112.60 although this seems unlikely today. Buying dips appears to be the plan, looking for a test of 114.00 and possibly higher.

24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
Resistance Support
114.70 Minor 113.40 Minor
114.40 (76.4% of 114.95/112.61) 113.07 Session low
114.25 Minor 112.78 20 Feb low
114.04 (61.8% pivot of 114.95/112.61) 112.60 17 Feb low
113.77/80 Session high/(50% of 114.95/112.61) 111.38 (76.4% of 111.58/114.95).

GBPUSD: 1.2472

While making some decent gains today against the Euro, Sterling remains rangebound against the US$, trading a range of 1.2400/80 on Tuesday. Further choppy range looks set to continue although the short term momentum indicators do look mildly positive, and above the day’s high could see a run back to 1.2500 and possibly beyond, where 1.2570/80 would provide decent resistance. On the downside, support will be seen at the 1.2400 low, below which could then head back to the 7 Feb, 1.2345 low. Watch for the UK GDP figures today.

24 Hour: Mildly bullish Medium Term: Neutral
Resistance Support
1.2570 (61.8% of 1.2700/1.2346) 1.2450 Minor
1.2548 14 Feb high 1.2425 Minor
1.2523 16 Feb high 1.2410/01 100 DMA /Session low
1.2510 17 Feb high 1.2387/82 17 Feb low /16 Feb low
1.2480/82 Session high/20 Feb high /200 HMA 1.2345 Daily Kijun/7 Feb low

Economic data highlights will include:

UK Provisional GDP (Q4), Total Business Investment (Q4)

USDCHF: 1.0086

The dollar is firmer today after having briefly breached 1.0100, and with the short term momentum indicators currently looking positive further gains seem possible. The dailies also look constructive and if we can get back above the day’s high we could see a run to 1.0120 and then possibly on to 1.0160. The downside will find 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.  Buying dips still seems to be the plan given that the dailies look positive but keep a SL below 1.0000.

24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
Resistance Support
1.0200 Minor 1.0060 Minor
1.0160 (61.8% of 1.0343/0.9861) 1.0040 200 HMA
1.0136 16 Jan high 1.0023 Session low
1.018/121 16 Feb high/19 Jan high 1.0010 20 Feb low
1.0104 Session high 0.9965 17 Feb low

AUDUSD: 0.7682

The Aud remains stuck in its recent range today, unaffected by the strength seen elsewhere in the US$, and leaves the outlook unchanged. The momentum indicators are flat and further choppy trade near current levels would not really surprise today although there is a bit of secondary data due and the RBA Governor, Lowe will be speaking. On the topside minor resistance will arrive at 0.7690/00 ahead of last Friday’s 0.7712 high, and then ahead of the 16 Feb, 0.7732 high. This looks unlikely to be seen today, but if wrong, look for a run to 0.7750 where the descending trend resistance will provide a strong cap. On the downside, the initial support will again arrive at 0.7550 and then at 0.7735, below which could then see a move to 0.7600/10 although this seems a little doubtful.  Further sideways trade looks the most likely outcome.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
0.7750 Descending trend resistance 0.7670 200 HMA
0.7731 16 Feb high 0.7649 Session low
0.7712 17 Feb high 0.7636 16 Feb low
0.7700 Minor 0.7617 14 Feb low
0.7689 Session high 0.7605 7 Feb low

Economic data highlights will include:

CB Leading Economic Index, RBA Governor Lowe Speech, WBC Leading Index, Wage Price Index, Construction Work Done, China House Price Index

NZDUSD: 0.7164

The Kiwi was weighed down by the stronger US$ on Tuesday, trading down to 0.7130 ahead of a bounce in NY, to finish at 0.7160. The short term momentum indicators are now mixed, suggesting a fairly rangebound session, possibly capped at around 0.7180/85, although if we get above there we could head back to 0.7200, which if seen would provide a decent sell opportunity. On the downside, the daily indicators remain bearish so selling into near term strength is preferred, looking for a run back towards the session low, below which would test 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.

24 Hour: Prefer to sell rallies Medium Term: Prefer to sell rallies
Resistance Support
0.7255 (50% of 0.7375/0.7133) 0.7145 Minor
0.7242 16 Feb high 0.7129 Session low
0.7220 17 Feb high 0.7120/15 200 DMA/100 DMA/55 DMA Converging/(50% of 0.6857/0.7375)
0.7200 Minor 0.7100 Minor
0.7186 Session high 0.7070 13 Jan low