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

By | November 27, 2017

 

 

EURUSD: 1.1932
EurUsd soared higher on Friday in taking advantage of the solid data from the EU and it finished near session highs of 1.1943 in thin conditions after having taken out the important 1.1880 resistance.

The Euro looks solid again on Monday, with both the 4 hour/daily momentum indicators pointing higher, and above Friday’s high would see little resistance until 1.2000. Beyond this would open the way to 1.2030/50 and even on towards the 8 Sept low at 1.2096.

On the downside, minor support will be seen at 1.1900/15 today, below which could head back to 1.1880 although this currently looks unlikely.

Preferred Strategy:  For Monday, I prefer to adopt a fairly neutral stance although buying dips may be a plan as it looks as though we are headed to 1.2000.

Buy EurUsd @ 1.1900. SL @ 1.1870, TP @ 1.1990

24 Hour: Neutral –Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
1.2050 Minor 1.1915 Minor
1.2033 20 Sept high 1.1900 Minor
1.2004 22 Sept high 1.1875 Daily cloud top
1.1980 Minor 1.1852 (23.6% of 1.1553/1.1943)
1.1943 Friday high 1.1835 Minor

Economic data highlights will include:

M:  EU Financial Stability Report, US New Home Sales, Dallas Fed Mfg Business Climate

T:  German Consumer Confidence, US Oct Preliminary Wholesale Inventories, Goods Trade Balance, Case Shiller House Price Index, House Price Index, Richmond Fed Mfg Index, API Weekly Crude Oil Stock Inventory

W: EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, German Preliminary CPI (Nov), US Q3 Preliminary GDP , US Personal Consumption/Expenditure, Pending Home Sales, Janet Yellen testifies to Congress, OPEC Meeting

T: German Retail Sales, Import/Export Index, Unemployment, EU Unemployment, US Personal Consumption/Expenditure Price Index, Personal Spending, Jobless Claims, Chicago Purchasing Managers Index

F: EU Flash Manufacturing PMIs, I’m Mfg/Prices Paid, Construction Spending Baker Hughes Oil Rig Count



USDJPY: 111.50
US$Jpy had a tight range of 111.19/61 on Friday, leaving the outlook pretty much unchanged.

The daily momentum indicators are still looking heavy, and a test of 111.00 – and lower – would not surprise at some stage although the shorter term charts are still pointing higher and it may be worth waiting to see if we can head back towards the important 111.70 area. A break of 111.70 would allow a squeeze towards 112.00/20 where there is equally strong resistance, so stops on shorts should be left above here.

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.

Sell UsdJpy @ 111.90. SL @ 112.25, TP @ 110.50

24 Hour: Prefer to sell rallies Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
112.25 200 HMA /Weekly cloud top 111.18 Friday low
112.05 200 WMA 111.06 23 Nov low
111.95 (23.6% of 114.73/111.06)/Daily cloud top 111.00 (50% pivot of 107.31/114.73)
111.70 100 DMA/200 DMA 110.60 Minor
111.61 Friday high 110.30 100 WMA /Daily cloud base

Economic data highlights will include:

M:

T: Japan Retail Trade

W:

T: Preliminary Industrial Production – Oct, Foreign Bond/Stocks Investment, Housing Starts

F: CPI, Unemployment, Nikkei Mfg PMI



GBPUSD: 1.3329
Cable had a solid session on Friday, reaching 1.3359 – last seen in early October – and unfazed by the ongoing Brexit negotiations that saw UK PM, May in Brussels trying to beat out a deal with Donald Tusk.

The daily momentum indicators still appear to be looking mildly constructive, and further gains do seem possible, where a break of 1.3360 would allow a run to 1.3400+ and possibly to where the major descending trend resistance from the 2014 high comes in at 1.3450.

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 fairly neutral – as per the 4 hour charts – albeit growing cautiously bullish.

Buy GbpUsd @ 1.3300. SL @ 1.3250, TP @ 1.3440

24 Hour: Neutral  -Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat (Long GbpAud)
Resistance Support
1.3505 (76.4% of 1.3656/1.3073) 1.3300 Minor
1.3450/55 Descending trend resistance/28 Sept high 1.3278 Friday low/Daily cloud top
1.3415 (61.8% of 1.3656/1.3073) 1.3270 Rising trend support
1.3380 Minor 1.3210/12 100 WMA /22 Nov low
1.3359 Friday high 1.3185 20 Nov low

Economic data highlights will include:

M:

T:

W: UK Banks Stress test Results

T: UK Consumer Confidence

F:



USDCHF: 0.9789
US$Chf traded lower again on Friday, falling to 0.9785 ahead of a minor bounce to close the week just under 0.9800.

With the daily momentum indicators pointing increasingly lower, a sustained break of 0.9785/0.9800 would allow a run towards 0.9725/30 and then to 0.9700/05.

On the topside, once back above the 200 WMA  and the Friday high at 0.9826 would find some minor Fibo resistance at 0.9845, 0.9865 and at 0.9885, and selling into strength today would seem to be the plan, with a SL placed above here.

Preferred Strategy:  Sell US$Chf @ 0.9865. SL @ 0.9890, TP @ 0.9750

24 Hour: Prefer to sell rallies Medium Term: Neutral   – Mildly Bearish
FX Charts Position: Flat
Resistance Support
0.9885  (61.8% of 0.9946/0.9785) 0.9785 Friday low
0.9864 (50% of 0.9946/0.9785) 0.9770 Minor
0.9845 (38.2% of 0.9946/0.9785) 0.9750 Minor
0.9826 23 Nov high/Friday high 0.9727 (50% of 0.9420/1.0037)
0.9810 200 WMA 0.9704 13 Oct low

Economic data highlights will include:

M:

T:

W:

T: GDP

F:



AUDUSD: 0.7610
AudUsd remained steady on Friday, in trading a tight range of 0.7606/31 and seemingly unwilling to take on the US$ weakness seen against the other major pairs.

With the short term momentum indicators looking flat we may be in for more of the same today although the daily charts still look positive and a test of the H/S neckline formation at 0.7660 would not surprise at some stage, which ties in with the 13 Nov high of 0.7665 and some minor Fibo resistance. 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 0.7590/0.7605 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:  Playing the Aud from the short side on the crosses seems to be the best plan right now and I prefer to remain long GbpAud or long EurAud. Further out, I like to sell AudUsd at around 0.7650, with a SL at 0.7680.

24 Hour: Neutral Medium Term: Neutral
FX Charts Position:    Flat (long StgAud)
Resistance Support
0.7700 7 Nov high 0.7606 Friday low
0.7665 13 Nov high /(23.6% of 0.8102/0.7531) 0.7585 200 HMA
0.7650 Minor 0.7570 Minor
0.7638 23 Nov high 0.7550 Minor
0.7631 Friday high 0.7531 21 Nov low  /100 WMA

Economic data highlights will include:

M:

T:

W:

T: HIA New Home Sales, Aust Private Sector Credit, CAPEX, China Mfg/Non-Mfg PMIs

F: AIG Performance of Mfg Index, Caixin China Manufacturing PMI, RBA Commodity Index


GbpAud

NZDUSD: 0.6868
The Kiwi remained steady on Friday in trading a tight range of 0.6865/94, leaving the outlook unchanged.

With the 4 hour/daily momentum indicators now looking neutral, a similar session may lie ahead on Monday although the dailies are still pointing higher and another test of 0.6900/05 looks possible, above which would allow a move to 0.6920 and 0.6935, albeit probably not today.

The initial support now lies at the 23 Nov/Friday lows 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.

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 though, I suspect a test of 0.6920/30 may lie ahead and it is possible that we could even see a return to the neckline of the major head and shoulders, at 0.6990, before heading lower. 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 23 Nov low /Friday low
0.6933 (23.6% of 0.7434/0.6783) 0.6850 200 HMA
0.6918 15 Nov high 0.6820 Minor
0.6905 23 Nov high 0.6788 21 Nov low
0.6893 Friday high 0.6779 17 Nov low

Economic data highlights will include:

M:

T:

W:

T: RBNZ Financial Stability Report, NZ Building Permits, ANZ Activity Outlook, Business Confidence

F:



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