24 Jan: Forecast: FX: US$/Majors + trade ideas

By | January 24, 2018

 

 

EURUSD: 1.2299
EurUsd made some minor gains in reaching a high of 1.2305 in EU/NY trade, but then gave up on the topside and has spent the rest of the day consolidating its recent gains while waiting on tomorrow’s ECB meeting, and ahead of that, today’s PMIs.
1 hour/4 hour indicators: Neutral Daily Indicators: Up Weekly Indicators:  Turning higher
Preferred Strategy:  A neutral stance seems prudent again on Wednesday, and with traders now awaiting tomorrow’s ECB Meeting another rangebound session would not surprise, although the daily charts do look positive and a return to the trend high should not be discounted. A bull flag seems to be building, which would have a target at around 1.2700 although that is currently a long way off and we need to take out 1.2320/30 resistance first, but buying dips is preferred.

Buy EurUsd @ 1.2220. SL @ 1.2175, TP @ 1.2350

Resistance Support
1.2400 Minor 1.2260 Minor
1.2385 Minor 1.2222 Session low
1.2335 Minor 1.2213 22 Jan low
1.2322 17 Jan high 1.2165 17 Jan low
1.2305 Session high 1.2140 23.6% of 1.1553/1.2295/200 HMA

Economic data highlights will include:

Eurogroup Meeting, EU/US Flash Manufacturing/Services/Composite PMIs, US Existing Home Sales, EIA Crude Oil Stocks Weekly Change



USDJPY: 110.31
US$Jpy  has ended the day near the lows following yesterday’s slightly more upbeat BOJ outlook on inflation, with the Yen in demand as the Jpy shorts continue to be squeezed.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:  The momentum indicators are now generally pointing lower and it would seem to be the downside that will come under pressure on Wednesday. If so, there will be a fair bit of support near 110.00 so any downside momentum, if seen, should be fairly slow but a break of 109.90/110.00 would see an acceleration towards 109.50. Right now the topside looks limited to 111.00 although I am not sure we see it up there today.
Resistance Support
111.70 200 DMA 110.24 Session low
111.47 18 Jan high 110.19 17 Jan low
111.21/17 22 Jan high / Session high 110.00 Rising trend support
111.00 Pivot 109.90 100 WMA
110.85 200 HMA/100 HMA 109.55 15 Sept low

Economic data highlights will include:                                      

Trade Balance, Nikkei Mfg Flash PMI, Leading Economic Index, Coincident Index



GBPUSD: 1.4001
Sterling has had a choppy session, falling from 1.4000 (seen in Asia) to 1.3915 on profit taking, before renewed demand at the London fix took it back up to a new post-Brexit high of 1.4026, and then consolidating at 1.4000 into the close. Watch out for the UK jobs data today.
1 hour/4 hour indicators: Turning higher Daily Indicators: Up Weekly Indicators:  Up
Preferred Strategy:  As before, Cable looks increasingly positive and with the daily/weekly momentum indicators aligning higher, a test of 1.4050/1.4100,with little resistance to be seen  ahead of the next major Fibo level at 1.4250 (76.4% of 1.5017/1.1821). The 4 hour charts show some bearish divergence so waiting to buy dips would seem the best laid plan.                                                                                                                                                                        Buy GbpUsd @ 1.3950. SL @ 1.3880, TP @ 1.4100
Resistance Support
1.4130 Minor 1.3975 Minor
1.4100 Minor 1.3960 Minor
1.4050 Minor 1.3945 Minor
1.4026 Session high 1.3915 Session low
1.4000 Psychological 1.3880 Minor

Economic data highlights will include:

UK Unemployment



USDCHF: 0.9576
US$Chf is lower today, back below 0.9600 but so far holding on to the support at 0.9565/0.9550 and the recent 0.9535 low.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:  As with yesterday, the daily charts look heavy, and if 0.9550/65 does get taken out we could head quickly to 0.9535 and then possibly a fair bit lower, with little support to be seen until 0.9430. On the topside, resistance will be seen at 0.9630/40, with solid offers likely to arrive at 0.9650/65. I remain neutral, possibly looking to sell rallies, with a SL placed at 0.9680.
Resistance Support
0.9665 18 Jan high 0.9565 (76.4% of 0.9420/1.0037)/Rising trend support /Session low
0.9660 200 WMA 0.9550 100 MMA
0.9650 17 Jan high 0.9535 19 Jan low
0.9637 (23.6% of 1.0004 /0.9535)/22 Jan high 0.9515 Minor
0.9600 Minor 0.9500 Minor


AUDUSD: 0.8002
 AudUsd is still trading at close to 0.8000, after a choppy session which saw the Aud head up to 0.8028 before reversing sharply to a low of 0.7955 and then bouncing to sit pretty much unchanged on the day.
1 hour/4 hour indicators: Neutral Daily Indicators: Up – Becoming Overbought Weekly Indicators:  Neutral – Turning higher?
Preferred Strategy:  The longer term uptrend remains intact, although the daily charts look toppish and warn of a deeper correction, lower. While above the Rising trend support though it may just be a buy on dips scenario. It is a fairly light data calendar again and a long w/e in Australia on Friday so external factors will drive price action, and if the US$ remains weak then the Aud will give 0.8030 another nudge. Right now a neutral stance seems best. Buying dips towards 0.7960 may be a plan today, but with a tight stop loss in place below the trend support line. Note that the 200 MMA lies at 0.8055, which should be strong resistance.

Buy AudUsd @ 0.7960. SL @ 0.7935, TP @ 0.8045

Resistance Support
0.8102 20 Sept high 0.8000 Pivot
0.8080 Minor 0.7980 Minor
0.8055 200 MMA 0.7956 Minor
0.8036/38 21 Sept High/19 Jan high 0.7940 17 Jan low
0.8029 Session high 0.7900/10 23.6% of 0.7510/0.7998 / Rising trend support


NZDUSD: 0.7356
The Kiwi is trading higher again on Wednesday, reaching 0.7365 before settling near 0.7350, with positive risk sentiment and selling of AudNzd cross underpinning the Kiwi.
1 hour/4 hour indicators: Turning higher Daily Indicators: Up – Possible topping formation. Weekly Indicators:  Turning higher
Preferred Strategy:  While the medium term charts look constructive for further gains, buying dips would seem to be the plan although I am reluctant to get long given that the dailies are now becoming overbought and the RSIs are diverging and are not backing up the latest move higher. The short term momentum indicators also look positive though so I would not be looking to sell it here yet.  Stand aside.
Resistance Support
0.7434 20 Sept high 0.7305 Session low
0.7415 Minor 0.7267 22 Jan low
0.7400 Minor 0.7245 18 Jan low
0.7375 (76.4% of 0.7557/0.6780) 0.7225 (23.6% of 6780/0.7364)
0.7364 Session high 0.7200 Minor