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

By | March 26, 2018

 

EURUSD: 1.2353
EurUsd finished Friday with a 50bp gain but overall the pair remains very choppy in view of the uncertain political path, with trade-war concerns being in particular focus. There is little data risk today although there are a couple of Fed speakers and the Chicago/Dallas Fed will be releasing reports. US Q4 GDP- Wednesday.
1 hour/4 hour indicators: Neutral Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  It looks like being another choppy day ahead although the Euro does look mildly bid at the start of the week but much will depend on political developments. Currency traders will probably spend much of the day watching the stockmarkets, with EurJpy likely to be a key driver.

On the topside, nearby resistance will be seen at 1.2370 ahead of the 22 March high at 1.2388. 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, 1.2285, at 1.2270 and at the 22 March low of 1.2240. Below here, 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.

Resistance Support
1.2445 8 March high 1.2325 200 HMA
1.2425 Minor 1.2300 Friday low
1.2412 14 March high 1.2285 22 March low
1.2388 22 March high 1.2240 21 Mar low
1.2372 Friday high 1.2220 (76.4% of 1.2154/1.2444)

Economic data highlights will include:                      

M: German Import/Export Index, Chicago Fed National Activity Index, Dallas Fed Mfg Business Climate, Speeches; Fed’s Dudley/Mester

T:  EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, US Case Shiller House Price Index, Richmond Fed Mfg Index, API Weekly Crude Oil Stock Inventory

W:  German Consumer Confidence Survey, US Q4 GDP, US Personal Consumption/Expenditure, Pending Home Sales, Wholesale Inventories, EIA Crude Oil Stocks Weekly Change

T: German Unemployment , German CPI/HICP, US Personal Spending/ Personal Consumption/Expenditure – Price Index, Jobless Claims, Chicago Purchasing Managers Index, Rts/Michigan Consumer Sentiment Index,

F:



USDJPY: 104.73
The post-FOMC slide  and the trade war angst  has seen US$Jpy remain under pressure on Friday, falling to 104.63 ahead of a bounce and then another relapse to finish the week at 104.73. Further losses in stocks, which look likely, would keep the Yen in demand on safe-haven grounds.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower Weekly Indicators:  Turning lower
Preferred Strategy:  The momentum indicators generally look heavy and below Friday’s low would see a run towards 104.50/104.20, both minor support, below which there is not too much to then hold the dollar up until 104.00/103.50.

On the topside, resistance will be seen at 105.00 and at Friday’s high of 105.32 although this looks unlikely to be seen today. The 200 MMA 105.55, would be the next target, above which could see a return to 106.00. The 4 hour charts are pointing lower and while the dailies are non committal, the weeklies and monthlies are beginning to point increasingly towards a test of 100.00. Selling rallies is preferred.

Sell US$Jpy @ 105.20. SL @ 105.60, TP @ 104.20

Resistance Support
106.08 22 March high 104.63 Friday low
105.80 Minor 104.50 Minor
105.55 200 MMA 104.25 Minor
105.32 Friday high 104.00 Minor
105.00 Minor 103.75 Channel base

Economic data highlights will include:

M:

T:

W:

T: Retail Trade

F:



GBPUSD: 1.4133
Cable was choppy on Friday and closed in the middle of the 1.4085/1.4171 range.  The action will largely be driven by international events this week although the Q4 GDP is due on Thursday.
1 hour/4 hour indicators: Neutral Daily Indicators:  Turning higher. Weekly Indicators:  Possible topping formation.
Preferred Strategy:   Overall, Cable retains a bid tone and further gains do look possible in the session ahead, particularly with the chance of reduced Brexit tensions.

Having reached the major descending trend resistance at 1.4220, which has so far been rejected, this will be the major resistance to watch for now, but ahead of which , Friday’s high (1.4171) and 1.4200 will be hurdles to be overcome. Beyond 1.4220 would target 1.4250/70 although that remains for another day I suspect, but above there would head back to the 2018 high at 1.4345.

On the downside, support will be seen at 1.4100 and at 1.4085/75, below which would signal that a trend top may be in place and could head towards 1.4025. While the 4 hour charts look slightly heavy, another test of the support may lie ahead, but further out the dailies still look positive, and buying dips may be the medium term trade.

Resistance Support
1.4278 2 Feb high 1.4100 (23.6% of 1.3711/1.4218)
1.4250 Minor 1.4085 Friday low
1.4218 Descending trend resistance/22 March high 1.4075 22 March low
1.4200 Minor 1.4025 (38.2% of 1.3711/1.4150)
1.4171 Minor 1.3995 21 Mar low

Economic data highlights will include:

M:

T:

W:

T: Q4 GDP, Total Business Investment, Nett Lending

F:



USDCHF: 0.9472
US$Chf traded down to 0.9444 before turning a little higher, briefly reaching 0.9494 on Friday, and then retreating to close mid-range, at 0.9470.
1 hour/4 hour indicators: Neutral Daily Indicators: Neutral Weekly Indicators:   Neutral
Preferred Strategy:  The short term momentum indicators look neutral today and a cautious stance is required. The dailies also seem to have run out of any upside steam so some choppy price action looks to lie ahead.

On the topside the immediate resistance will again be seen at minor levels at 0.9495/00, at 0.9515 and 0.9540 ahead of 0.9565/70. Beyond there looks unlikely for a while, but above 0.9570 would head towards 0.9600, above which allows a move to the 0.9615 Fibo level. Further out, 0.9640 and 0.9665 will see sellers.

On the downside, support will be seen at 0.9440 and then at 0.9420 and at 0.9380. Sidelined – possible range trade.

Resistance Support
0.9585 Minor 0.9444 Friday low
0.9565/69 21 Mar high /20 Mar high 0.9421 14 March low /(23.6% of 0.9187/0.9569)
0.9540 Minor 0.9400 Minor
0.9515 22 March high 0.9380 (50% of 0.9187/0.9569)
0.9494 Friday high 0.9350 Minor


AUDUSD: 0.7695
The Aud was choppy on Friday, trading between an early low of 0.7686 ahead of a US squeeze up to 0.7743, and then a late selloff to close the week back below 0.7700, at 0.7695, not helped by the souring risk sentiment seen in the stock markets.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning lower Weekly Indicators:  Turning lower?
Preferred Strategy:   While the momentum indicators are a little mixed, the dailies are heading south so I still prefer the downside as I think the US/AU yield differential will eventually weigh on the Aud, on top of which the current trade spat between the US/China will only add to the risk-off mood, with Australia caught in the middle of the argument between its two major trade partners. If correct, support today will arrive at 0.7685 and then at 0.7670. Under there would allow a move towards 0.7645, below which could see a run to the 100 WMA (0.7625) and to major rising trend support 0.7570, although that may take a while.

On the topside, resistance will be seen today at 0.7720 and at 0.7740/45. Above there could stretch back to 0.7760 and to 0.7785 although this seems doubtful. Selling rallies is preferred.

Sell AudUsd @ 0.7725. SL @ 0.7755, TP @ 0.7670

Resistance Support
0.7805 200 DMA 0.7686 22 March low /Friday low
0.7785/79 200 HMA/200 MMA/21 Mar high 0.7671 21 Mar low
0.7743 Friday high 0.7645 (50% pivot of 0.7160/0.8135)
0.7725 Minor 0.7625 100 WMA
0.7710 100 HMA 0.7600 Minor

Economic data highlights will include:

M:

T:  New Home Sales – Mar

W:

T:  Private Sector Credit

F:



NZDUSD: 0.7236
 The Kiwi headed higher in Europe on Friday, adding to gains made in Asia, and then extended its bull run in NY, with the US$ being generally offered as shorter-term US rates slipped. Having reached a session high of 0.7273, the Kiwi then fell sharply back late in the session to finish the week at 0.7235.
1 hour/4 hour indicators: Neutral Daily Indicators:  Turning lower? Weekly Indicators:  Turning Neutral
Preferred Strategy:   The Kiwi looks mixed at the start of the week and a cautious approach is required, with Friday’s 0.7210/73 range looking likely to cover it.

Overall, I still prefer the downside, and the dailies are mildly hinting in that direction. If so, support will be seen at 0.7200, at 0.7185 and at 0.7150-55, below which would 0.7140 and 0.7115 would attract, although this seems unlikely today.

On the topside, resistance will be seen at 0.7250 and at Friday’s high of 0.7273. Above 0.7275 could then see an acceleration higher with 0.7305 being the next target, albeit unlikely today.

Resistance Support
0.7320 Minor 0.7215 100 HMA
0.7305 (76.4% of 0.7354/0.7153) 0.7201 Friday low
0.7285 Minor 0.7185 200 DMA
0.7275/73 (61.8% of 0.7354/0.7153) /Friday high 0.7153 21 March low
0.7250 200 HMA 0.7140 10 Jan low

Economic data highlights will include:

M: Trade Balance – Feb

T:

W:  ANZ Activity Outlook

T: Building Permits – Feb

F: