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

By | October 27, 2017


EURUSD: 1.1650
Preferred Strategy:  EurUsd is sharply lower after the ECB meeting and looks as though the head shoulder trade is coming to fruition, in which case the target is at around 1.1250. The NY close is below the neckline (1.1660) – an increasingly bearish sign. There is plenty of work to do before that and while the momentum indicators are generally pointing lower, the short term momentum indicators are now becoming oversold. If we do see a short squeeze, look to sell into rallies today at around 1.1700, with a SL placed above 1.1730

Sell EurUsd @ 1.1695. SL @ 1.1730, TP @ 1.1500.

24 Hour: Prefer to sell rallies Medium Term: Bearish
FX Charts Position: Short
Resistance Support
1.1760 (50% of 1.1879/1.1640) 1.1660 100 DMA/H.S. Neckline
1.1732 (38.2% of 1.1879/1.1640) 1.1640 Session low
1.1720 Minor 1.1612 26 July low
1.1695 (23.6% of 1.1879/1.1640) 1.1580 Minor
1.1680 Minor 1.1510 Rising trend support/(38.2% of 1.0570/1.2091)

Economic data highlights will include:

US Q3 GDP, Michigan Consumer Sentiment Index, Baker Hughes Oil Rig Count

USDJPY: 113.96
Preferred Strategy: US$Jpy has remain rangebound on Thursday, with all the action being in the Yen crosses, which are generally lower (Yen strength).. With both the 1 & 4 hour charts still looking rather uninspired further choppy action looks possible although the dailies continue to pick up a more positive tone, and on the topside, back above 114.00, resistance will be seen at the 25 Oct high of 114.25, above which there is not too much to stop the dollar heading towards 114.50 and beyond that, to the major descending trend resistance, currently at 115.05. If US bond yields continue to climb, then US$Jpy will be testing 115.00 in the near future. On the downside, support will arrive at 113./50,  at 133.35 (session low) low, and again at the 24 Oct low at 113.24. Below that, a test of 113.00 could be on the cards, beneath which would see us back in the previous 112/113 range. Minor support should arrive at 113.20/00 below which 112.80 (rising trend support) and Friday’s low of 112.50 should provide decent backup. Overall, with the daily momentum indicators look mildly positive, so buying dips still seems to be the plan although there may be slightly better levels to do so. Buy US$Jpy @ 113.40. SL @ 112.95, TP @ 114.40.
24 Hour: Neutral Medium Term: Prefer to buy dips
FX Charts Position: Flat
Resistance Support
115.05 Descending trend resistance 113.50 Minor
114.80 Minor 113.33 Session low
114.49 11 July high 113.24 24 Oct low
114.24 25 Oct high 113.10 Rising trend support
114.03 Session high 112.60 Minor

Economic data highlights will include:


GBPUSD: 1.3159
Preferred Strategy: Cable has given up the previous day’s gains and is back at 1.3150 and  remains very choppy so I prefer to continue with a neutral stance against the US$ although I still like being long GbpAud, which I think is eventually headed to 1.82. As far as Cable is concerned, stay neutral  as the momentum indicators are generally mixed/flat, although the  4 hourlies are possibly rolling over to head a little lower and we may just see Sterling follow the Euro around today..
24 Hour: Neutral Medium Term: Neutral
FX Charts Position: GbpUsd -Flat. (Long GbpAud)
Resistance Support
1.3286 17 Oct high 1.3149 Session low
1.3278 Session high 1.3130 Minor
1.3250 Minor 1.3109 25 Oct low
1.3230 Minor 1.3086 20 Oct low
1.3195 100 HMA/200 HMA 1.3035 Rising trend support

USDCHF: 0.9976
Preferred Strategy: US$Chf is finishing Thursday at the top of its range and at new trend highs at 0.9978. As before, with the dailies looking increasingly positive I suspect that the dollar will eventually take a look at 1.0000+ although it has to overcome Fibo resistance at 0.9990 first. . Dips look supported at 0.9940 today and buying there with a SL placed under 0.9900 seems to be the plan.  Buy US$Chf @ 0.9940. SL @ 0.9895, TP @ 1.0050
24 Hour: Prefer to buy dips Medium Term: Mildly Bullish
 FX Charts Position: Long
Resistance Support
1.0099 11 May high 0.9940 Minor
1.0020 Minor 0.9915 Minor
1.0000 Psychological 0.9900 100 HMA
0.9990 (61.8% of 1.0343/0.9420) 0.9875 Session low
0.9978 Session high 0.9868 25 Oct low

AUDUSD: 0.7656
Preferred Strategy: The Aud looks heavier by the day and staying short, looking to add to the position seems to be the plan today. 0.7690/0.7715 should provide decent resistance as we look for a run towards 0.7630 and below that, eventually towards 0.7570. Sell AudUsd @ 0.7715. SL @ 0.7760, TP @ 0.7630
24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
FX Charts Position:   Short
Resistance Support
0.7760 (23.6% of 0.8102/0.7655) 0.7655 Session low
0.7735 Minor 0.7630 (61.8% of 0.7328/0.8124)
0.7715 Minor 0.7600 Minor
0.7690 200 DMA 0.7580 Minor
0.7675 Minor 0.7571 7 July low

Economic data highlights will include:

Australian PPI

NZDUSD: 0.6840
Preferred Strategy: The Kiwi remains very heavy and I think lower levels still lie ahead. The dailies remain negative and as before, trading from the short side and selling rallies seems to be the plan. On the downside, a move back below the session low of 0.6833 would target the 0.6817 May 2017 low, beneath which there is not too much support ahead of 0.6670. On the topside, resistance will be seen at 0.6880/0.6900 and selling into rallies is preferred. Sell NzdUsd @ 0.6885. SL @ 0.0.6920, TP @ 0.6815
24 Hour: Prefer to sell rallies Medium Term: Bearish
FX Charts Position: Flat
Resistance Support
0.6950 Minor 0.6833 Session low
0.6920 (23.6% of 0.7210/0.6833) 0.6817 11 May low
0.6903 Session high 0.6800 Minor
0.6880 Minor 0.6760 Minor
0.6865 Minor 0.6720 Minor