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

By | November 22, 2017


EURUSD: 1.1739
EurUsd had a quiet session, within 1.1712/57, leaving the outlook unchanged and it looks as though it will be politics and risk sentiment that will continue to guide the action, with the FOMC Minutes and the Durable Goods Orders being the main economic focus of the coming session. Note that Janet Yellen will be speaking shortly, during the Asian time zone.

The short term momentum indicators look a little mixed today and we might see another tight session within 1.1700/1.1800, with the 100 DMA currently acting as a pivot, at 1.1735

If we head lower, then below the session low of 1.1712 would allow a move to 1.1700, below which 1.1670/80 would attract. This was the previous H/S neckline and is also the 61.8% Fibo level (1.1670) of the recent rally from 1.1553, and should see decent bids but below which opens the way to 1.1650 and eventually to 1.1625.

The daily MACDs still suggest that further gains are possible, and back above the session high of 1.1757 could then allow a run back to the 20 Nov high of 1.1807. Above here would open up 1.1820/30, which would find good sellers ahead of 1.1855/60 and then 1.1880/85, beyond which would allow a run towards 1.1900+.

Preferred Strategy:  For Wednesday, I prefer to adopt a fairly neutral stance while waiting for the FOMC Minutes but out of choice I would look to sell into strength above 1.1780, with a SL placed above 1.1830.

Sell EurUsd @ 1.1780. SL @ 1.1830, TP @ 1.1700.

24 Hour: Neutral –Prefer to sell rallies Medium Term: Neutral – Prefer to sell rallies
FX Charts Position: Short  – SL  above 1.1880
Resistance Support
1.1857/59 20 Oct high/16 Nov high 1.1735 100 DMA
1.1828 Daily cloud base 1.1712 Session low
1.1821 17 Nov high 1.1690 Minor
1.1807 20 Nov high 1.1671 (61.8% of 1.1553/1.1859)
1.1757 Session high 1.1660 14 Nov low

Economic data highlights will include:                                      

Janet Yellen Speech, ECB Non-MP Minutes, US Jobless Claims, Durable Goods Orders, EIA Crude Oil Stocks Weekly Change, Michigan Consumer Sentiment Index, FOMC Minutes

USDJPY: 112.44
US$Jpy had a quiet session within 112.17/70, leaving the outlook unchanged.

The short term momentum indicators are still looking mildly positive, and on the topside resistance will again be seen at 112.70, ahead of 113.00, a break of which could see the dollar head back towards 113.15 and possibly on to 113.30.

The daily momentum indicators are still pointing lower though and at some stage we could yet see another run to levels below 112.00. Decent support lies in the 111.50/70 area where it might be worth trying buy some dollars if we ever see it down there.

Preferred Strategy:  Support will again arrive at 112.20/112.00 and I doubt that we go under here today, and overall I suspect we may be in for a couple of days of 112/113 range trading.

In the longer term I still prefer to look to buy the dollar but prefer to wait until we see 112.00/111.50.

In the shorter term: Buy US$Jpy @ 112.10. SL @ 111.40, TP @ 113.00

24 Hour: Neutral – Prefer to buy dips? Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
113.65 (61.8% of 114.73/111.87) 112.17 Session low
113.33 15 Nov high/(50% of 114.73/111.87) 112.05 200 WMA
113.14 17 Nov high/200 HMA 111.87/90 20 Nov low /Daily cloud top
112.95 (38.2% of 114.73/111.87) 111.75 200 DMA/100 DMA
112.70 20 Nov high/Session high 111.46 25 Sept low

GBPUSD: 1.3237
Sterling traded a tight session within 1.3209/67, leaving the outlook unchanged

The momentum indicators are still in neutral gear so a nimble stance is required but on balance I still think Cable could grind higher in the days ahead, with the direction today likely to come from the UK Autumn Budget Statement ahead of the US data release.

For Wednesday, further choppy trade near current levels would not really surprise, and on the topside, resistance will again be seen at 1.3265/70, above which 1.3285/1.3300 would find good offers. A break of 1.3300 would then allow 1.3320/30 although this may be a step too far today

On the downside, support will again be seen 1.3200/10 ahead of 1.3185, 1.3150 and 1.3135. Under this opens the way to the rising trend support low, now at 1.3100.

Preferred Strategy:  I remain neutral, possibly very cautiously bullish (Long GbpAud), and as long as we don’t see a daily close below 1.3165, which would negate the series of higher highs/lows, I will stick with the mildly bullish tone.

24 Hour: Neutral  -Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat (Long GbpAud)
Resistance Support
1.3320 1 Nov high 1.3210/08 100 WMA /Session low
1.3300 Minor 1.3185 20 Nov low
1.3279 20 Nov high 1.3150 200 HMA
1.3266 Session high 1.3134 16 Nov low
1.3260 Daily cloud top 1.3090 Rising trend support

Economic data highlights will include:                                                                                                                          

Autumn Budget Statement

USDCHF: 0.9913
US$Chf had a tight session within 0.9899/9946, leaving the outlook unchanged

The short term momentum indicators are mixed/flat suggesting further choppy trade ahead while the dailies still look a little heavy but as long as we hold above 0.9880 I still think we might eventually head higher. If so, on the topside, resistance will again be seen immediately ahead, at 0.9935/45, beyond which could see a move back to parity although probably not today.

Further out, given the positive look of the weeklies, if we can eventually take out 1.0015/25 we could then head on to take another look at 1.0035/40, above which there is little to hold the dollar up ahead of 1.0100, and beyond that to 1.1025 and 1.0170.

On the downside, support will again be seen today at 0.9900, below which could revert to the 20 Nov low at 0.9878 although I don’t think we get there. If wrong look for a move back below 0.9875 to where further support would been at 0.9845 and 0.9800/10.

Preferred Strategy:  Buy US$Chf @ 0.9900. SL @ 0.9870, TP @ 1.0015

24 Hour: Mildly Bullish – Prefer to buy dips Medium Term: Prefer to buy dips
FX Charts Position: Long – SL @ 0.9840.
Resistance Support
1.0037 27 Oct high 0.9898 Session low
1.0017 9 Nov high 0.9879/81 16 Nov low / 17 Nov low/20 Nov low /Rising trend support
0.9986 13 Nov high 0.9845 15 Nov low/100 WMA
0.9946 Session high 0.9810 200 DMA
0.9925 200 HMA 0.9800 (38.2% of 0.9420/1.0037)

AUDUSD: 0.7579
AudUsd lifted sharply in Europe’s morning on RBA Governor Lowe’s comment that the next rate move is likely to be up, reaching 0.7590 before settling the US session at 0.7575.

The Aud has actually made a key day reversal after making a new trend low at 0.7531 and if we do head higher, back above the session high will find the next resistance at 0.7605/10, at 0.7620 and at 0.7640. I doubt we go close to the top end of this today, but if wrong, a break of the trend resistance could then revisit the 13 Nov high of 0.7665, above which would then allow room to move towards 0.7675/80 and possibly 0.7695/0.7700.

The downside will find minor support at 0.7550 ahead of the stronger 0.7530/35, area, which will continue to be strong, but below which would target Fibo support at around 0.7515, a break of which would then look towards 0.7485 and 0.7460/70 (Rising trend support).

Preferred Strategy:  In the absence of any major data, a quiet day while waiting on the FOMC Minutes late in the day.

Sell AudUsd @ 0.7600. SL @ 0.7645, TP @ 0.7535

24 Hour: Neutral  – Prefer to sell rallies Medium Term: Neutral –Mildly Bearish
FX Charts Position:    Short
Resistance Support
0.7665 13 Nov high /200 HMA 0.7550 Minor
0.7640 Descending trend resistance 0.7531 Session low  /100 WMA
0.7625 Minor 0.7520 (76.4% of 0.7328/0.8124)
0.7609 16 Nov high 0.7500 Minor
0.7590 Session high 0.7485 Weekly cloud top

Economic data highlights will include:                                                                         

WBC Leading Economic Index, Construction Work Don

NZDUSD: 0.6830
The Kiwi has squeezed up from the low of 0.6788 to finish towards session highs of 0.6840, and with the 4 hour momentum indicators looking mildly positive we could see a run towards the 200 HMA at 0.6865 and even on towards 0.6880 and 0.6900. Above this would allow a move to 0.6920 and 0.6935, albeit not today.

The initial support still lies at 0.6790/6800, below which would then find that there is little support ahead of 0.6670 although this remains a long way off and before then we are likely to see bids at 0.6750/60 and again at 0.6700/10.

Preferred Strategy:  Overall, with the longer term (weekly) charts looking heavy, I suspect the Kiwi is currently biding its time ahead of a more sustained test of 0.6700 and lower – possibly much lower. In the short term I would be looking to sell into a squeeze towards 0.6900.

Sell NzdUsd @ 0.6880. SL @ 0.6910, TP @ 0.6790

24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
FX Charts Position: Flat
Resistance Support
0.6900 Descending trend resistance 0.6788 Session low
0.6882 17 Nov high 0.6779 17 Nov low
0.6885 Minor 0.6750 Minor
0.6865 200 HMA 0.6725 Minor
0.6840 Session high 0.6700 Minor

Economic data highlights will include:                                                                                                                           

NZ Visitor Arrivals