30 Mar: Forecast: FX: US$/Majors

By | March 30, 2017


EURUSD: 1.0766

The Euro came under pressure today , catching up with an earlier fall in Sterling ahead of the signing of Article 50,  but with the Euro also not helped by a firm dollar, underpinned by some more strong US data that suggests we should expect further rate hikes in the not too distant future.

The 4 hour momentum indicators are still pointing lower, and below the session low of 1.0740 it could be that we now see a test of 1.0700/1.0690, below which further losses would take the Euro towards 1.0650. On the topside, minor resistance lies at 1.0800 ahead of the session high of 1.0826. Beyond there may be tricky today but further offers would then arrive at the 200 DMA at 1.0875. Further out, back above here could return to the 27 Mar high (1.0906), beyond which further offers would arrive at around 1.0930/35. The daily momentum appear to be running out of steam on the topside, and following today’s move lower they may now be rolling over so a more cautious stance is required, although at this stage the weeklies still look mildly positive. For the time being, selling rallies is mildly preferred, with a SL placed above the session high (1.0826) but looking for a run to 1.0700, possibly lower.

24 Hour: Prefer to sell rallies Medium Term: Prefer to buy dips
                                         Resistance Support
1.0932 (61.8% of 1.1299/1.0340) 1.0740 Session low
1.0906 27 Mar high 1.0700 (50% of 1.0494/1.1906)
1.0875 200 DMA 1.0688 (38.2% of 1.0343/1.0906)
1.0826 Session high 1.0650 (61.8% of 1.0494/1.1906)
1.0795 200 HMA 1.0588 (76.4% of 1.0494/1.1906)

Economic data highlights will include:

German Import/Export Index, EU Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, German Provisional CPI/HICP, US GDP (Q4), US Personal Consumption/Expenditure, Jobless Claims, Fed’s Kaplan/Williams Speeches

USDJPY: 111.02

US$Jpy has had a choppy but sideways session either side of 111.00 (110.77/111.31) suggesting a fairly neutral stance ahead of Thursday trade.

The short term momentum indicators are mixed, although the 4 hour charts remain constructive, so if we do see higher levels resistance will be seen at 111.35 and again at 111.60/70, which may possibly be a sell area given that the dailies still point lower, suggesting that further medium term losses are highly possible. On the downside, back below 111.00 would find minor bids again at 110.75/80 and then again at 110.50, below which could again head towards the 110.10 area, which  should again be strong support although I don’t think we go back down here yet. If wrong, further buyers would arrive at 109.85/90, but under there, it again becomes pretty thin until around 109.35 and 109.00. As with yesterday, selling rallies towards 111.70, with a SL placed above 112.15 seems to be the plan on Thursday.

24 Hour: Neutral   – Possible sell rallies Medium Term: Mildly bearish
                                         Resistance Support
112.15 (38.2% of 115.50/110.10) 110.77 Session low
112.00 Minor 110.50 Minor
111.75 Minor 110.10 200 WMA / 27 Mar low
111.57 23 Mar high 109.87 (50% pivot of 101.18/118.66)
111.35/31 (23.6% of 115.50/110.10) /Session high 109.35 Weekly Kijun

Economic data highlights will include:

Foreign Bond/Stocks Investment

GBPUSD: 1.2437

Sterling lost ground in Asian trade, falling to 1.2376 as the signing of Article 50 approached,  ahead of a bounce  back to current levels, where it has since chopped around for the balance of the session, with no-one really quite sure what to make of it all.

A neutral stance is now required, with the momentum indicators all looking rather mixed. The dailies are flat although the 4 hour charts do suggest the chance of another run back to 1.2400 and possibly to the 1.2376 session low. Below that, minor Fibo levels lie at 1.2300 and at 1.2230,  and these come ahead of the flash-crash rising trend line, currently at 1.2110. On the topside, resistance will be seen at minor levels ahead of 1.2600, although this currently looks unlikely to be seen. Stand aside and let the market do the work for a while.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance           Support
1.2615 27 Mar high 1.2400 (38.2% of 1.2108/1.2615)
1.2595 28 Mar high 1.2376 Session low
1.2540 Minor 1.2363 (50% of 1.2108/1.2615)
1.2500 Minor 1.2335 20 Mar low
1.2475 Minor 1.2300 (61.8% of 1.2108/1.2615)

USDCHF: 0.9961

US$Chf made further, minor gains today in line with the move lower in €/Usd, reaching the first resistance level by topping out the session at 0.9975.

As before, the charts are rather mixed and while the short term momentum indicators do hint that we may see a further recovery from current levels the daily charts look rather indecisive, but having been heading lower they are now possibly leaning to point higher so a cautious stance is probable prudent. Resistance lies ahead at 0.9975 but above which could see a return to parity and above, where 1.0030 and 1.0080 would provide hurdles. On the downside, minor support lies at 0.9935/25 and 0.9900. Back below 0.9900 further minor support will be seen at 0.9860 ahead of the 0.9815/30 area although this seems unlikely to be seen again for a while. Although rather neutral, buying dips towards 0.9920 seems to be a plan, with a tight SL placed under 0.9900

24 Hour: Prefer to buy dips Medium Term: Neutral
                                         Resistance Support
1.0113 13 Mar high 0.9925 200 HMA
1.0085 (76.4% of 1.0170/0.9813) 0.9912 Session low
1.0031 (61.8% of 1.0170/0.9813) 0.9900 100 HMA
1.0000 Psychological 0.9875 Minor
0.9975 Session high 0.9830 28 Mar low

AUDUSD: 0.7668

The Aud remains within its recent range although it is a little higher on Wednesday, assisted by firmer base metal prices, but leaving the overall outlook pretty much unchanged.

The 4 hour and daily momentum indicators still look mixed, so a neutral stance is required but the dailies still look heavy, so a move back towards support at 0.7590 may be possible in the days ahead. If we then head below 0.7590 we may then see a drop towards 0.7550/60, which should act as strong support. The short term momentum indicators look a little more positive though and on the topside, back above the session high of 0.7673 could see a squeeze towards 0.7690/00 and then to 0.7715, and beyond that opens the way to 0.7740/50 although not yet. A neutral stance is required, and the 0.7600/0.7700 range looks to have it covered.

24 Hour:  Mildly bullish – Prefer to sell rallies Medium Term: Prefer to sell rallies
                                         Resistance                                         Support
0.7749 21 Mar high 0.7660 200 HMA
0.7715 Minor 0.7630 100 HMA
0.7700 Minor 0.7615 Minor
0.7685 Minor 0.7590/0.7586 (61.8% of 0.7490/0.7749) /28 Mar low /Rising trend support
0.7672/77 Session high/23 Mar high 0.7555 Minor

Economic data highlights will include:

HIA New Home Sales (Feb)

NZDUSD: 0.7033

The Kiwi had a tight session, again testing the downside but holding the 0.6990 support before a bounce to finish near session highs of 0.7038.

As before, while the dailies remain mildly constructive they do appear to be running out of steam, suggesting the upside potential is rather limited, possibly capped by the descending trend resistance at around 0.7050. The 4 hour charts are neutral and hint that the upside may be capped below the 28 Mar high of 0.7048, and that similar to yesterday, selling rallies would again seem to be the plan for the coming session, with a SL placed above 0.7060. Back above here would prove me wrong and could then see a squeeze towards the recent trend high, at 0.7089. On the downside, 0.6990/0.7000 will again act as the immediate support, below which would allow a move to 0.6965/70 a break of which could eventually take the Kiwi to 0.6935 and on to 0.6900.

24 Hour: Prefer to sell rallies Medium Term: Prefer to sell rallies
Resistance Support
0.7108 (61.8% of 0.7246/0.6890) /100 DMA 0.7015 Pivot
0.7089 21 Mar high 0.6994/92 24 March low /Session low
0.7072 22 Mar high 0.6989 (50% pivot of 0.6890/0.7089)
0.7048 28 Mar high 0.6965 61.8% of 0.6890/0.7089
0.7038 Session high 0.6936 (76.4% of 0.6890/0.7089)