22 Mar: Forecast: FX: US$/Majors + trade ideas

By | March 22, 2018


EURUSD: 1.2345
EurUsd has reversed the losses of the previous session following the FOMC Meeting, and despite the mildly hawkish tilt from the Fed coming on top of the rate hike, the US$ has ended the day under pressure, at session lows. The PMIs and the IFO will be in focus today but also keep an eye out for the BOE Meeting, which should provide some volatility through the cross.
1 hour/4 hour indicators: Turning higher Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  It looks like being a choppy day ahead although the Euro does look bid.

On the topside, nearby resistance will be seen at 1.2355/60 ahead of the 15 March high at 1.2383. Beyond there could then return to 1.2400/10, above which could head back to 1.2440 and even to 1.2500 although not today.

Support today should arrive at 1.2300, 1.2370 and at the session low of 1.2240 although this appears unlikely to be seen. If wrong, look for a move to the minor Fibo level at 1.2220 and then at 1.2200, ahead of the greater degree of Fibo support at 1.2170.

Buy EurUsd @ 1.2285. SL @ 1.2235, TP @ 1.2385

Resistance Support
1.2445 8 March high 1.2320 200 HMA
1.2412 14 March high 1.2300 100 HMA
1.2383 15 March high 1.2270 Minor
1.2358/54 19 March high /Session high 1.2240 Session low
1.2338 Session high 1.2220 (76.4% of 1.2154/1.2444)

Economic data highlights will include:

EU Council Meeting, EU/US Preliminary Manufacturing PMIs – Mar, German IFO Business Climate/Expectations – Mar, EU Current Account – Jan, EU Economic Bulletin, US Jobless Claims, Kansas Fed Mfg Activity, House Price Index.

USDJPY: 105.97
US$Jpy was choppy again following the Fed announcement, but having reached 106.63 the dollar then fell to lows of 105.87, closing at the familiar 106.00 level.
1 hour/4 hour indicators: Mixed. Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  A cautious approach is required, and as we are confined within the middle of the range of the last month, we should probably expect more of the same today. Technically though, the daily momentum indicators still look mildly constructive and if we manage to break above 106.60, a test of the descending trend resistance at around 106.75 may be on the cards. Above here could stretch to 107.00 and then to 107.30/40.

On the downside, back below 105.85/90, support will be seen at the 200 MMA at 105.70 and then at 105.60. Below here opens 105.25 and 105.00.

Resistance Support
107.00 Minor 105.87 Session low
106.73 14 March high / Descending trend resistance 105.70 200 MMA
106.63 Session high 105.67/59 19 March low/16 Mar low
106.50 Minor 105.45 7 March low
106.30 200 HMA 105.25 2 March low

GBPUSD: 1.4148
Cable, initially underpinned by solid UK jobs data, reached a high of 1.4150 following the FOMC, closing the day at 6 week highs and looking bid ahead of today’s BOE Meeting.  No change is expected but BOEWATCH sees a 70% chance of rate hike at May meeting.
1 hour/4 hour indicators: Turning higher Daily Indicators:  Turning higher. Weekly Indicators:  Possible topping formation.
Preferred Strategy:    Having closed at the highs, from a technical perspective the daily charts still hint at the chance of another move to the topside and if correct, look for a run above 1.4150 towards 1.4190/00, with major descending trend resistance coming in at 1.4220.

On the downside, support will be seen at minor levels, at 1.4100 and at 1.4080 ahead of the initial Fibo level at 1.4045. Sidelined – wait on the BOE.

Resistance Support
1.4278 2 Feb high 1.4100 Minor
1.4250 Minor 1.4080 Minor
1.4220 Descending trend resistance 1.4045 (23.6% of 1.3711/1.4150)
1.4195 (76.4% of 1.4345/1.3711) 1.4020 Minor
1.4149 Session high 1.3995 Session low

Economic data highlights will include:

UK Retail Sales – Feb, BOE Meeting/Interest Rate Decision/Statement/Minutes/Vote Count/APP Facility

USDCHF: 0.9490
US$Chf has traded up to 0.9565 after the FOMC, but failed to take out the previous session high (0.9569)  and then fell to finish at the lows of  0.9483
1 hour/4 hour indicators: Turning lower Daily Indicators: Neutral – Turning higher? Weekly Indicators:   Neutral
Preferred Strategy:  The short term momentum indicators look heavy following the FOMC and a break of 0.9480 could signal a decline towards 0.9465 and 0.9420.

On the topside the immediate resistance will again be seen at minor levels at 0.9510 and 0.9540 ahead of 0.9565/70. Beyond there looks unlikely today, but above 0.9570 would head d towards 0.9600, above which allows a move to the 0.9615 Fibo level. Further out, 0.9640 and 0.9665 will see sellers.

A neutral stance is now required as the dailies, previously pointing higher, do now seem to be running out of steam and I suspect we may see a bit more downside.

Resistance Support
0.9610/15 Daily cloud top/(50% of 1.0037/0.9186) 0.9480/83 (23.6% of 0.9187/0.9569) /Session low
0.9585 Minor 0.9465 Minor
0.9565/69 Session high /20 Mar high 0.9421 14 March low /(23.6% of 0.9187/0.9569)
0.9540 Minor 0.9400 Minor
0.9510 Minor 0.9380 (50% of 0.9187/0.9569)

AUDUSD: 0.7767
The Aud is higher today as yield plays seem to come back into favour, and this despite the fact that Australian rates are below US rates, with the differential looking likely to widen over the next 12 months, and should add to downside pressure on the Aud.
1 hour/4 hour indicators: Turning higher. Daily Indicators: Possible basing formation. Weekly Indicators:  Turning lower?
Preferred Strategy:   The short term momentum indicators are looking strongly bullish and a run back towards 0.7785, 0.7805 and possibly to 0.7825 does seem to be on the cards.

Overall, I prefer the downside still as I think the yield differential will eventually weigh on the Aud, despite the current move. If correct, support will arrive at 0.7735/40 and then at around 0.7700 ahead of the session low of 0.7671. Below that would allow a move towards 0.7645, with only minor support at 0.7670 lying ahead of that. Under 0.7645 would allow a move to the 100 DMA (0.7615) and to major rising trend support 0.7570, although that may take a while.

Resistance Support
0.7857 (76.4% of 0.7916/0.7686) 0.7740 Minor
0.7840 Minor 0.7720 100 HMA
0.7822 (61.8% of 0.7916/0.7686) 0.7700 Minor
0.7805 200 DMA 0.7671 Session low
0.7785/79 200 MMA/Session high 0.7645 (50% pivot of 0.7160/0.8135)

Economic data highlights will include:

Unemployment – Feb

NZDUSD: 0.7235
The Kiwi has reversed the losses of the previous session, and now sits at 0.7225 following the RBNZ Meeting, which contained no surprises, after having earlier soared from 0.7160 to 0.7245 following the FOMC outcome.
1 hour/4 hour indicators: Turning higher Daily Indicators:  Possible basing formation. Weekly Indicators:  Turning Neutral
Preferred Strategy:   The Kiwi is now at 0.7225, and looks capable of heading into the 0.7255/75 area of strong resistance, above which could revisit 0.7300.

On the downside, support will be seen at 0.7200, at 0.7185 and at 0.7150-55 although this seems unlikely right now.

Resistance Support
0.7305 (76.4% of 0.7354/0.7153) 0.7200 Minor
0.7275 (61.8% of 0.7354/0.7153) 0.7185 200 DMA
0.7265 200 HMA 0.7153 Session low
0.7255 (50% of 0.7354/0.7153) 0.7140 10 Jan low
0.7245 Session high 0.7115 100 DMA

Economic data highlights will include:

RBNZ Interest Rate Decision/ Statement