1 Mar: Forecast: FX US$/Majors

By | March 1, 2017


EURUSD: 1.0596

The Euro has traded in choppy fashion today, again reaching the resistance seen near 1.0630 before falling back to sit back below, leaving the outlook unchanged and rather neutral ahead of Donald Trump’s speech to Congress later in the session. A failure to live up to market expectations could see a nasty selloff in the dollar but the hawkish Fed speak is underpinning it into the US close.

The momentum indicators being pretty much neutral and a nimble stance is required although it is likely to be highly volatile later on when Trump begins to outline some of his policies. Near term support will arrive at 1.0550 and then at 23 Feb, 1.0537 low. Below that could then see a move towards 1.0500 and the 1.0493 22 Feb low, beneath which there is not too much support ahead of the 11 January low of 1.0453. A return to the topside will once again find offers at 1.0630/35 above which would allow a run towards 1.0675/80.  Above here looks unlikely today, but we could potentially see a move back to 1.0700 and above if Trump is less than inspiring.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.0754 6 Feb high 1.0566 Session low
1.0713 8 Feb high 1.0551 24 Feb low
1.0700 22 Feb high 1.0537 23 Feb low
1.0678 16 Feb high 1.0493 22 Feb low
1.0630/35 Session high/(76.4% of 1.0678/1.0493) 1.0453 11 Jan low

Economic data highlights will include:

EU Mfg PMIs, German CPI, US Personal Consumption/Expenditure Index, Markit Mfg PMI, ISM Mfg PMI/Prices, Construction Spending, Total Vehicle Sales, EIA Crude Oil Stocks Weekly Change, Donald Trump to address Congress

USDJPY: 112.16

Having squeezed up to 112.80 early in the previous session, the dollar has since drifted steadily lower, reaching as low as 111.68 before a late bounce that has seen it trade back up above 112.00 to currently pretty much sit on the 200 DMA. (The dollar has seen a late rally to currently sit near session highs and having broken above the descending trend resistance, it now looks likely to make a bullish key day reversal heading into the US close (A close above 118.83 is required)).

On the topside, the initial, initial resistance lies at the 112.89 session high, ahead of the 24 Feb high of 112.95. Back above 113.10/15 could then 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, the initial support sits at 112.50 (100 HMA), at 112.00 (100 DMA) and then at 111.60/70, below which there is a bit of a vacuum, with the weekly cloud top at 111.30 and the Fibo support at 111.10 likely to provide the next downside targets. The dailies remain neutral, so a nimble stance is required heading into today’s action.

24 Hour: Neutral Medium Term: Neutral
                                          Resistance Support
113.70 (61.8% of 114.95/111.68) 112.00 100 DMA
113.30 (50% pivot of 114.95/111.68) 111.68 Session low
112.95 24 Feb high /(38.2% of 114.95/111.68) / 111.58 7 Feb low
112.89 Session high 111.33 Weekly cloud top
112.45 (23.6% of 114.95/111.68) 111.10 (38.2% of 101.18/118.66)

Economic data highlights will include:

Nikkei Mfg PMI

GBPUSD: 1.2409

Sterling remains heavy, but currently still above 1.2400 on the ongoing Brexit concerns, with talk of another Scottish referendum keeping the pressure on the downside

The short term momentum indicators are once again mixed; suggesting further choppy trade and a nimble stance is required, with little lead being given by the dailies which have little momentum behind them. Below the 55/100 DMAs would revisit 1.2380/85, a break of which would then open the way to the 7 Feb low of 1.2346. Under there though there is little to hold Cable up until 1.2300 and 1.2260, although unlikely to be seen today. On the topside, resistance will be seen at the session high (1.2470) and at 1.2500, above which would then head back towards the 24 Feb high of 1.2570, which will remain strong resistance if/when seen.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.2569/70 24 Feb high /(61.8% of 1.2700/1.2346) 1.2403/00 Session low/55 DMA/100 DMA
1.2535 Minor 1.2382/83 15 Feb low/28 Feb low
1.2500 Minor 1.2346 7 Feb low
1.2470 Session high 1.2325 Minor
1.2450 Minor 1.2300 Minor

Economic data highlights will include:         

UK Mfg PMI, Consumer Credit, Nett Lending to individuals

USDCHF: 1.0040

US$Chf has traded a range of 1.0008/1.0101, briefly spiking below the minor rising trend support before bouncing back to sit just above it, currently at   1.0030.

Both the short term and the daily momentum indicators are mixed, suggesting a fairly nimble stance today.  On the topside, resistance will be seen once again at 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, back below the rising trend line, support will be seen at 1.0000/10, below which could see a run back to the 17 Feb low of 0.9965 and then towards 0.9900 although possibly not today.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance Support
1.0160 (61.8% of 1.0343/0.9861) 1.0030 Rising trend support
1.0140 22 Feb high /Daily cloud top 1.0008 Session low
1.0115 23 Feb high 0.9965 17 Feb low
1.0097 Session high 0.9950 Minor
1.0060 200 HMA 0.9900 Minor

AUDUSD: 0.7671

The Aud is unchanged today ahead of what looks likely to be a rather volatile session with the GDP (exp  0.7% qq)coming up just ahead of the Donald Trump address to Congress and then to be followed up by the Chinese Mfg PMIs.

Technically, the short term momentum indicators are flat and require a neutral stance. On the downside, below 0.7660/65 would then target a move to 0.7650, 0.7635 and 0.7600/05. On the topside, resistance will again be seen at 0.0.7700/10 and 0.7720 above which could then see a move 0.7750. A break of this, doubtful today I suspect could then head to the November high of 0.7777. Another rangebound session below 0.7700 again appears to be in store ahead of the fireworks to come, but I still prefer to trade from the short side given that the dailies look mildly heavy.

24 Hour: Prefer to sell rallies Medium Term: Neutral – Turning  mildly bearish
Resistance Support
0.7750 Descending trend resistance 0.7663/62 24 Feb low /28 Feb low
0.7740 23 Feb high 0.7649 21 Feb low
0.7719 24 Feb high 0.7636 16 Feb low
0.7707 28 Feb high 0.7617 14 Feb low
0.7694 Session high 0.7602 (23.6% of 0.7160/0.7740)

Economic data highlights will include:

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

NZDUSD: 0.7210

Kiwi is a little firmer today, back above 0.7200 in quiet trade ahead of looks likely to be a volatile session to come. NZ Terms of Trade coming up.

The momentum indicators remain mixed and so a cautious stance is required. On the topside, the initial resistance will be seen at 0.7235/40 and again at 0.7250, above which could then see a run to 0.7280/.07300. On the downside, back below 0.7200 I would be looking for a run back towards the session low at 0.7176 and then to 0.7145/40. Below that could then lead to 0.7130 and the strong support at 0.7120/15, albeit probably not today.

24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
0.7317 (76.4% of 0.7375/0.7133) 0.7200 Minor
0.7280 (61.8% of 0.7375/0.7133) 0.7176/73 Session low/23 Feb low
0.7252 (50% of 0.7375/0.7133) 0.7145/40 22 Feb low /200 DMA
0.7246 23 Feb high 0.7129 21 Feb low
0.7237/36 24 Feb high/Session high 0.7125/15 100 DMA/55 DMA Converging/(50% of 0.6857/0.7375)

Economic data highlights will include:

Terms of Trade