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

By | January 25, 2018


EURUSD: 1.2398
EurUsd has soared to a high of 1.2414 on the back of the positive PMIs and on Mnuchin’s comments in talking down the dollar. Further losses look likely for the dollar.
1 hour/4 hour indicators: Turning higher – Becoming Overbought Daily Indicators: Up Weekly Indicators:  Turning higher
Preferred Strategy:  Mnuchin’s comments undermined the dollar, sending the Euro to new 3 year high, with the prospect of more to come although we are now running into heavy resistance in the 1.2425/60 area.  The longer term momentum indicators do look positive though, so buying dips does seem to be the plan, with the best chance to do so probably coming during Mario Draghi’s press conference.

Buy EurUsd @ 1.2300. SL @ 1.2240, TP @ 1.2500

Resistance Support
1.2550 Minor 1.2350 Minor
1.2500 (38.2% of 1.6037/1.0340) 1.2325 Minor
1.2460 100 MMA 1.2300 Minor
1.2425 200 MMA 1.2292 Session low
1.2415 Session high 1.2250 Minor

Economic data highlights will include:

EcoFin Meeting, German IFO Business Climate/Expectations, ECB Interest Rate Decision, Monetary Policy  Statement, US Jobless Claims, Wholesale Inventories, New Home Sales, Kansas Fed Mfg Activity,  World Economic Forum- Davos

USDJPY: 109.21
US$Jpy  has ended the day towards the lows following the break of the 109.90/110.00 support, falling to a low of 108.96, ahead of a mild bounce into the NY close.
1 hour/4 hour indicators: Down – Oversold Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:  The momentum indicators are generally pointing lower and it would seem to be the downside that will come under pressure on Thursday. If so, there will support at 108.90/00, but a break of which would then find little to hold the dollar up until 107.50. Short term rallies look possible and selling any rally towards 110.00, with a SL at 110.35 may be a plan.
Resistance Support
110.33 Session high 108.96 Session low /Weekly cloud base
110.00 (23.6% of 111.38/108.96) 108.50 Minor
109.80 Minor 108.25 Minor
109.55 Minor 108.00 Minor
109.30 Minor 107.45 Rising trend support

GBPUSD: 1.4242
Sterling had a stellar session on the back of strong UK wages growth and Mnuchin’s comments, reaching 1.4243 and closing on its highs.
1 hour/4 hour indicators: Turning higher -Bearish Divergence Daily Indicators: Up Weekly Indicators:  Up
Preferred Strategy:  As before, Cable looks very positive and with the daily/weekly momentum indicators aligning higher, a stern test of 1.4250 (76.4% of 1.5017/1.1821) look likely, with little resistance then to be seen ahead of 1.4390. The 4 hour charts are now overbought so waiting to buy dips would seem the best laid plan.                                                                                                                                                                                        Buy GbpUsd @ 1.4120. SL @ 1.4040, TP @ 1.4300
Resistance Support
1.4390 200 WMA /Descending trend resistance 1.4150 Minor
1.4350 Minor 1.4100 Minor
1.4300 Minor 1.4050 Minor
1.4250 (76.4% of 1.5017/1.1821) 1.4000 Minor
1.4241 Session high 1.3964 Session low

USDCHF: 0.9459
US$Chf is lower today, falling steeply through 0.9550 support to a low of 0.9425, ahead of a minor bounce into the NY close.
1 hour/4 hour indicators: Down – Oversold Daily Indicators: Down Weekly Indicators:  Neutral
Preferred Strategy:  As before, the charts look heavy, and if the strong support at 0.9425/30 does get taken out we could head quickly to 0.9335 and then possibly a fair bit lower, with little support to be seen until 0.9250 and then little again until 0.9150. On the topside, resistance will be seen at 0.9500/30, with solid offers likely to arrive at 0.9550/60. Looking to sell rallies, with a SL placed at 0.9570 may be a plan..
Resistance Support
0.9600 Minor 0.9450 Minor
0.9580 Session high 0.9425 Session low/Rising trend support
0.9550 Minor 0.9400 Minor
0.9535 100 MMA 0.9375 Minor
0.9500 Minor 0.9335 (50% pivot of 0.8326/1.0343)

AUDUSD: 0.8073
 AudUsd rallied strongly through Europe/US trade and reached a high of 0.8082 before reversing sharply after the soft Kiwi GDP data, and currently sits on the major level of 0.8055.
1 hour/4 hour indicators: Up – Bearish Divergence Daily Indicators: Up – Becoming Overbought Weekly Indicators:  Neutral – Turning higher
Preferred Strategy:  The longer term uptrend remains intact, although the 4 hour charts a showing some bearish divergence and 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. A break of 0.785 would hint that a top is in place, signalling a deeper decline towards 0.7950 but until then buying dips remains the overall theme.

Buy AudUsd @ 0.8000. SL @ 0.7975, TP @ 0.8100

Resistance Support
0.8162 May 2015 high 0.8055 200 MMA
0.8150 Minor 0.8040 Minor
0.8124 8 Sept high 0.8025 Minor
0.8102 20 Sept high 0.7992 Session low /Rising trend support
0.8082 Session high 0.7980 Minor

NZDUSD: 0.7337
The Kiwi reached a high of 0.7433 in US trade but has since reversed sharply because of the underwhelming GDP figure, so far trading down to 0.7328.
1 hour/4 hour indicators: Turning lower Daily Indicators: Up – Possible topping formation. Weekly Indicators:  Turning higher
Preferred Strategy:   The daily charts look toppish and selling rallies may now be the plan although if the US$ remain under pressure it may be better to sell it in the crosses, possibly against the Aud?
Resistance Support
0.7434/30 20 Sept high/Session high 0.7328 Session low
0.7400 Minor 0.7300 Minor
0.7380 Minor 0.7280 (23.6% of 0.6780/0.7433)
0.7465 Minor 0.7260 Rising trend support
0.7350 Minor 0.7235 Minor