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

By | November 24, 2017

 

 

EURUSD: 1.1852
EurUsd is firm again today, after the solid EU PMI readings  although the range has been tight because of the US holiday.

The 4 hour/daily momentum indicators are still pointing higher, and further gains look possible so buying dips is currently favoured.  Further out though, the weeklies do still point lower so I would expect conditions to be choppy but with a near term upside bias.

If so, above the near term resistance at 1.1855/60 would find good sellers at 1.1880/85, beyond which would then allow a run towards 1.1900+, with little resistance then to be seen until 1.2000.

On the downside, minor support will today be seen at 1.1800/10 a break of which would allow a return to 1.1780/1.1800 ahead of stronger levels at 1.1735 although this looks unlikely to be seen heading into the weekend.

Preferred Strategy:  For Friday, I prefer to adopt a fairly neutral stance given the US long weekend holiday, although buying dips may be a plan.

The German IFO will be the data risk today, while speeches from the ECB’s Constancio and Coeure.

24 Hour: Neutral –Prefer to buy dips Medium Term: Neutral – Prefer to sell rallies
FX Charts Position: Flat
Resistance Support
1.2004 22 Sept high 1.1830 Minor
1.1936 Minor 1.1812 Session low
1.1900 Minor 1.1800 Minor
1.1885 (61.8% of 1.2091/1.1553) 1.1770 200 HMA
1.1855/57/59 Session high/20 Oct high/16 Nov high 1.1735/31 100 DMA /22 Nov low

Economic data highlights will include:                                                                                  

German IFO Business Climate/Expectations, US Flash Manufacturing/Services/Composite PMIs, Baker Hughes Oil Rig Count



USDJPY: 111.22
US$Jpy had a very tight session 111.06/37 on Thursday, and in the absence of any real interest on Friday due to holiday thinned markets, it could be much the same today

The 4 hour and daily momentum indicators still looking heavy, and a test of 111.00 – and lower – would not surprise although the hourlies are now pointing higher and it may be worth waiting to see if we can head back towards the important 111.70 level to sell into.

Preferred Strategy:  It looks as though the market is still generally trapped in being short Jpy so there will be plenty of sellers into dollar rallies from those looking to cut positions. Selling rallies is preferred today although it could be another quiet one.

24 Hour: Neutral – Prefer to sell rallies? Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
112.05 200 WMA 111.06 Session low
111.95 (23.6% of 114.73/111.06) 111.00 (50% pivot of 107.31/114.73)
111.70 100 DMA/200 DMA 110.60 Minor
111.50 Minor 110.30 100 WMA
111.37 Session high 110.15 (61.8% of 107.31/114.73)


GBPUSD: 1.3307
Cable edged back from its 5 week high on Thursday, with traders largely ignoring the cuts to Britain’s dismal economic growth forecasts announced in Thursday’s budget statement, with the focus again turning towards Brexit ahead of UK PM Theresa May’s visit to Brussels today. At the end of the day Cable has recovered from the session lows to sit back just above 1.3300.

The daily momentum indicators still appear to be picking up some mildly positive impetus and further gains do seem possible, where a break of 1.3335/40 would allow a run to 1.3400+, possibly to where the major descending trend resistance from the 2014 high comes in at 1.3460.

On the downside, minor support will again be seen 1.3280/00 ahead of 1.3240 and buying dips would currently seem to be the plan.

Preferred Strategy:  Overall I remain neutral, albeit growing cautiously bullish. Any solid progress in today’s May/EU meeting could produce some major activity so watch closely. I suspect that Sterling is priced for bad news, so any progress would allow a decent jump higher.

Buy GbpUsd @ 1.3250. SL @ 1.3090, TP @ 1.3400

24 Hour: Neutral  -Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat (Long GbpAud)
Resistance Support
1.3450 Minor 1.3283 Session low
1.3415 (61.8% of 1.3656/1.3073) 1.3250 Rising trend support
1.3380 Minor 1.3210/12 100 WMA /22 Nov low
1.3337/41 13 Oct high/(50% pivot of 1.3656/1.3073) 1.3185 20 Nov low
1.3323 1.3165 Minor


USDCHF: 0.9814
US$Chf traded lower again today, falling to 0.9794, ahead of a minor bounce, and is currently hugging close to the 200 WMA.

With the daily momentum indicators pointing increasingly lower though, a sustained break of 0.9790/0.9800 would allow a run towards 0.9725/30.

On the topside, once back above the session high, some Fibo resistance would be seen at 0.9850 and at 0.9885 and selling into strength today would seem to be the plan, with a SL placed above 0.9915 although I suspect we are in for a fairly tight session.

Preferred Strategy:  Sell US$Chf @ 0.9880. SL @ 0.9915, TP @ 0.9780

24 Hour: Prefer to sell rallies Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
0.9946 21 Nov high/ (61.8% of 1.0038/0.9794) 0.9810/00 200 WMA /(38.2% of 0.9420/1.0037)
0.9910 Minor 0.9794 Session low
0.9885 (38.2% of 1.0038/0.9794) 0.9775 Minor
0.9850 (23.6% of 1.0038/0.9794) 0.9750 Minor
0.9827 Session high 0.9727 (50% of 0.9420/1.0037)


AUDUSD: 0.7625
AudUsd remains firm on Friday although the Thursday range has been a tight 0.7603/38, and it could be a similar outcome today in the absence of any data and thin holiday markets.

With the 4 hour/daily momentum indicators looking increasingly positive, a test of the H/S neckline formation at 0.7660 would not surprise, above which would find further sellers at the 13 Nov high of 0.7665. Beyond this would then allow a run towards 0.7675/80 and possibly 0.7695/0.7700.

The downside will again find minor support at 0.7590/0.7600 and then at 0.7565 and 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 this would then look towards 0.7485 and 0.7460/70 (Rising trend support) albeit this is some way off.

Preferred Strategy:  In the absence of any data and due to a holiday-thinned market, a quiet day near current levels would not surprise.

24 Hour: Neutral Medium Term: Neutral
FX Charts Position:    Flat
Resistance Support
0.7729 2 Nov high 0.7600 Minor
0.7700 7 Nov high 0.7585 200 HMA
0.7665 13 Nov high /(23.6% of 0.8102/0.7531) 0.7565 100 HMA
0.7650 Minor 0.7550 Minor
0.7638 Session high 0.7531 21 Nov low  /100 WMA


NZDUSD: 0.6889
The Kiwi squeezed up to 0.6904 on Thursday in thin trade although it is now back at close to where it started and a quiet run into the weekend would not surprise.

With the 4 hour/daily momentum indicators still pointing higher, another test of 0.6900/05 looks possible, above which would allow a move to 0.6920 and 0.6935, albeit not today. The hourlies are actually looking a bit heavy, so upside momentum today may be rather muted.

The initial support now lies at the session low of 0.6865 ahead of 0.6850 and then the stronger level at 0.6790/6800. Below this would 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.

Trade balance coming up.

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 the downside. In the short term I suspect a test of 0.6920/30 may lie ahead. Today could be quiet and a neutral stance seems wise.

24 Hour: Mildly Bullish Medium Term: Mildly Bearish – Prefer to sell rallies
FX Charts Position: Flat
Resistance Support
0.6980 9 Nov high 0.6865 Session low
0.6950 Minor 0.6850 200 HMA
0.6933 (23.6% of 0.7434/0.6783) 0.6820 Minor
0.6918 15 Nov high 0.6788 21 Nov low
0.6905 Session high 0.6779 17 Nov low

Economic data highlights will include:                                                                                                                           

Trade Balance



Please Login to Comment.