27 Feb: Forecast: US$ /Majors

By | February 27, 2017

 

EURUSD: 1.0560

EurUsd had a choppy day on Friday, heading up to 1.0618 when the dollar took on a soft tone before turning sharply lower in US trade, to finish at 1.0560, not too far removed from where it had begun the day.

This leaves the outlook pretty much unchanged, and with the short term momentum indicators being pretty neutral a nimble stance is required although the dailies still suggest another test of the downside in the days ahead. If so, near term support will arrive at the 23 Feb, 1.0637 low, and then again as we approach 1.0500 and the 1.0493, 22 Feb low. Below that, there is not too much support ahead of the 11 January low of 1.0453, 1.0420 and to levels below 1.0400 where there is little to support the Euro until the 3 Jan low of 1.0340 A return to the topside will once again find offers at 1.0600/20 above which would head towards 1.0635 and possibly to 1.0675/80.  Above here looks unlikely today, but we could potentially see a move back to 1.0700 and above. The Durable Goods Orders will provide much of the direction today but until then, I prefer to look to sell into strength, looking for an eventual retest of 1.0500.

24 Hour: Prefer to sell rallies Medium Term: Mildly bearish
Resistance Support
1.0700 22 Feb high 1.0556 Friday low
1.0678 16 Feb high 1.0537 23 Feb low
1.0635 (76.4% of 1.0678/1.0493) 1.0520 Minor
1.0618 Friday high 1.0493 22 Feb low
1.0590 200 HMA 1.0453 11 Jan low

Economic data highlights will include:

M:  EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, US Durable Goods Orders, Pending Home Sales, Dallas Fed Mfg Business Climate

T: German Retail Sales (Jan), US Provisional GDP (Q4), Wholesale Inventories, Provisional US Personal Consumption/Expenditure, Goods Trade Balance, Case Shiller House Price Index, Chicago Purchasing Managers Index, Consumer Confidence, Richmond Fed Mfg Index, API Weekly Crude Oil Stock Inventory. Trump speaking to Congress.

W: EU Mfg PMIs, German CPI, US Personal Consumption/Expenditure Index, Markit Mfg PMI, ISM Mfg PMI/Prices Paid , Construction Spending, Total Vehicle Sales, EIA Crude Oil Stocks Weekly Change, Fed’s Kaplan/Brainard Speeches

T: German Import/Export Index, EU Unemployment CPI, PPI, US Jobless Claims, ISM NY Index

F: EU Services/Composite PMIs, EU Retail Sales, Fed Speeches: Yellen, Evans, Lacker, Powell, Fischer


USDJPY: 112.14

US$Jpy turned lower on Friday as traders took a risk-off stance ahead of the weekend due to the lack of progress from the Trump administration in announcing any details on tax cuts/infrastructure spending.

On the topside, minor resistance will arrive at 112.45 and 112.65 ahead of Friday’s high of 112.95. Back above 113.00 could see a run towards the 23 Feb high of 113.45 and then to 113.72, the 22 Feb high. Above this, although unlikely for a while, would see sellers at 114.00/05 and then at 114.40 ahead of the recent trend high of 114.95. On the downside, below Friday’s low, support will be seen at 111.60/70, below which there is a bit of a vacuum of support with the weekly cloud top at 111.30 and the Fibo support at 111 likely to provide the next downside targets. While the dailies are neutral, the 4 hour indicators look as though we can expect a sterner test of the lows on Monday so selling rallies now seems to be the plan.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
113.45 23 Feb high 111.92 Friday low
113.10 100 HMA/38.2% of 114.95/111.92 111.70 100 DMA
112.95 Friday high 111.58 7 Feb low
112.64 23.6% of 114.95/111.92 111.33 Weekly cloud top
112.45 Minor 111.10 (38.2% of 98.94/118.66)

Economic data highlights will include:

M:

T: Provisional Industrial Production, Housing Starts, Construction Orders (All Jan)

W:  Nikkei Mfg PMI,

T:

F: CPI



GBPUSD: 1.2459

Cable fell back into the middle of its recent range on Friday as traders squared up long positions ahead of the weekend, not being helped by heavy selling of GbpJpy

The short term momentum indicators now point a little lower and it appears likely that Cable will remain heavy, with a chance to test  1.2400, below which would head back below the 55/100 DMAs and the chance to revisit the 7 Feb low of 1.2346. On the topside, resistance will be seen at 1.2500, which might be tricky to overcome today, although if wrong we could then head back towards Friday’s high of 1.2570, which will remain strong resistance.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.2582 7 Feb high 1.2447 Friday low
1.2569/70 Friday high /(61.8% of 1.2700/1.2346) 1.2427 23 Feb low
1.2535 Minor 1.2410/01 100 DMA /21 Feb low
1.2500 Minor 1.2382 15 Feb low
1.2480 100 HMA 1.2346 7 Feb low

USDCHF: 1.0076

US$Chf had a choppy Friday, heading down to 1.0025 before recovering to finish at the day’s highs of 1.0080.

The dailies still look mildly constructive, and the short term momentum indicators are now also pointing higher, so a retest of 1.0100/15 and then 1.0140, the 22 Feb high. Beyond there will see decent sellers at 1.0160 and at 1.0200, although this looks likely to be delayed for a while. On the downside, support will be seen at 1.0050/55, below which we might head back towards minor support at 1.0020 ahead of the 1.000 pivot. Below here may be tricky, but if wrong we would break below the rising trend support and could see a run back to the 17 Feb low of 0.9965. Buying dips still seems to be the plan given that the dailies look positive, but keep a SL below 1.0000.

24 Hour: Mildly bearish – Prefer to buy dips Medium Term: Prefer to buy dips
Resistance Support
1.0200 Minor 1.0055 200 HMA
1.0160 (61.8% of 1.0343/0.9861) 1.0024 Friday low
1.0140 22 Feb high /Daily cloud top 1.0010/15 20 Feb low /Rising trend support
1.0115 23 Feb high 0.9965 17 Feb low
1.0080 Friday high 0.9950 Minor

Economic data highlights will include:

M:

T:

W:

T: Retail Sales

F:


AUDUSD: 0.7668

The Aud had a choppy Friday session, initially heading up to 0.7720, but unable to hold on to those gains it spent the rest of the day drifting lower and finished near the 0.7663 lows.

The momentum indicators now seem to be aligning to point lower and below 0.7665 would then target a move to 0.7650, 0.7635 and 0.7600/05. On the topside, resistance will be seen at 0.7685, 0.7700 and 0.7720. This last level looks unlikely to be seen again for a while, but if wrong, then a move 0.7750 could be on the cards, beyond which could then head to the November high of 0.7777. For the coming session I prefer to sell into strength near 0.7700, with a SL placed above 0.7720.

24 Hour: Prefer to sell rallies Medium Term: Neutral – Turning  mildly bearish
Resistance Support
0.7750 Descending trend resistance 0.7663 Friday low
0.7740 23 Feb high 0.7649 21 Feb low
0.7719 Friday high 0.7636 16 Feb low
0.7700 Minor 0.7617 14 Feb low
0.7685 200 HMA 0.7602 (23.6% of 0.7160/0.7740)

Economic data highlights will include:

M:  Company Gross Operating Profits (Q4)

T:  New Home Sales, Current Account (Q4), Private Sector Credit (Jan)

W: AIG Mfg Index, GDP (Q4), China Mfg/Non-Mfg PMI, Caixin Mfg PMI

T:  Building Permits (Jan),

F: AIG Services Index, China Caixin Services PMI


NZDUSD: 0.7194

The Kiwi was unable to carry on with its recent positive run on Friday, and having reached 0.7237 it turned lower, to finish the week back just below 0.7200.

The momentum indicators are a little mixed and so a cautious stance is required at the start of the week. On the topside, minor resistance will be seen at 0.7220 and then again at 0.7235/40 and again at 0.7250 although I doubt that we see it up here today. If wrong, above her would then see a run to 0.7280/.07300. On the downside, the daily indicators remain mildly bearish, so selling into near term strength is still preferred, looking for a run back towards 0.7170 and 0.7145,  below which would test 0.7130 and the very strong support at 0.7120/15, albeit probably not today.

24 Hour: Prefer to sell rallies Medium Term: Prefer to sell rallies
Resistance Support
0.7317 (76.4% of 0.7375/0.7133) 0.7191 Friday low
0.7280 (61.8% of 0.7375/0.7133) 0.7173 23 Feb low
0.7252 (50% of 0.7375/0.7133) 0.7145 22 Feb low
0.7246/37 23 Feb high /Friday high 0.7129 21 Feb low
0.7220 Minor 0.7120/15 200 DMA/100 DMA/55 DMA Converging/(50% of 0.6857/0.7375)

Economic data highlights will include:

M: NZ Visitor Arrivals,

T:  Trade Balance, ANZ Business Confidence

W: Terms of Trade

T:

F: ANZ Commodity Prices