28 Feb: Forecast: US$ /Majors

By | February 28, 2017


EURUSD: 1.0588

Eurusd squeezed higher, to reach 1.0630 on Monday before reversing to sit just below 1.0600 by the end of the session, not too far removed from where it started the day.

Once again, this leaves the outlook pretty much unchanged, and with the short term momentum indicators being pretty neutral a nimble stance is required.  The dailies are also turning towards neutral, further clouding the outlook and a nimble stance is required ahead of what looks likely to be a fairly rangebound session ahead of Trump’s speech, tomorrow. Near term support will arrive at the 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. Look for something like 1.0550/0650 to cover it today while waiting on trump tomorrow.

24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
1.0700 22 Feb high 1.0588 200 HMA
1.0678 16 Feb high 1.0551 24 Feb low
1.0630/35 Session high/(76.4% of 1.0678/1.0493) 1.0537 23 Feb low
1.0620 Minor 1.0493 22 Feb low
1.0600 Minor 1.0453 11 Jan low

Economic data highlights will include:

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.

USDJPY: 112.72

US$Jpy has shot higher late in the session and now sits near descending trend resistance a break of which could see an acceleration higher.

On the topside, the initial, minor resistance lies at 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, minor support sits at 112.50 below which could then head back towards the day’s low of 111.91, although this looks a little unlikely given that the short term momentum indicators are now picking up some positive momentum.  If wrong, further 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. The dailies remain neutral, so it could be that we hang around current levels while now waiting on what Donald trump has to say tomorrow.

24 Hour: Mildly Bullish Medium Term: Neutral
Resistance Support
113.80 (38.2% of 114.95/111.92) 112.50 Minor
113.45 23 Feb high 112.25 Minor
113.10/15 (38.2% of 114.95/111.92) /200 HMA 111.92 Session low/100 DMA
112.95 24 Feb high 111.58 7 Feb low
112.83 Session high 111.33 Weekly cloud top

Economic data highlights will include:

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

GBPUSD: 1.2440

Sterling reached a session low of 1.2383 on the back of the Scottish issue but has since rebounded sit in the middle of the day’s range, currently at 1.2440.

The short term momentum indicators are 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 the session low, 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 (1.2478) 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
1.2582 7 Feb high 1.2425 Minor
1.2569/70 24 Feb high /(61.8% of 1.2700/1.2346) 1.2400 100 DMA
1.2535 Minor 1.2382/83 15 Feb low/Session low
1.2500 Minor 1.2346 7 Feb low
1.2478 Session high 1.2325 Minor

USDCHF: 1.0091

US$Chf has finished near session highs, just below 1.0100 after an earlier low of 1.0045 in what has been a relatively tight session.

The short term momentum indicators are flat, suggesting another tight session ahead although the dailies still look mildly constructive so a retest of 1.0100/15 and then 1.0140, the 22 Feb high would not really surprise at some stage. 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 the 1.0045 low, 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: Neutral – Prefer to buy dips Medium Term: Prefer to buy dips
Resistance Support
1.0200 Minor 1.0045 Session low
1.0160 (61.8% of 1.0343/0.9861) 1.0024 24 Feb 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
1.0097 Session high 0.9950 Minor

AUDUSD: 0.7678

Having squeezed up to a high of 0.7707 in Asia yesterday following the strong Corporate Profit results, the Aud has since drifted back to chop around just below 0.7700.

The short term momentum indicators are now flat and require a neutral stance, with anything directional likely to come via today’s domestic data (New Home Sales, Private Sector Credit and Current Account). Below 0.7660/65 would then target a move to 0.7650, 0.7635 and 0.7600/05. On the topside, resistance will 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. For the coming session a rangebound session below 0.7700 again appears to be in store, 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 /Session low
0.7740 23 Feb high 0.7649 21 Feb low
0.7719 24 Feb high 0.7636 16 Feb low
0.7707 Session high 0.7617 14 Feb low
0.7685/90 200 HMA /100 HMA 0.7602 (23.6% of 0.7160/0.7740)

Economic data highlights will include:

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

NZDUSD: 0.7195

The Kiwi has had a choppy session (0.7186/0.7226) but has ended up near the recent 0.7200 pivot.

The momentum indicators remain mixed and so a cautious stance is required at the start of the week although if anything the dailies do look a little heavy. Technically, on the topside, the initial resistance will be seen at 0.7225 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, with the daily indicators looking mildly bearish, selling into near term strength is still preferred, looking for a run back towards 0.7170 and 0.7145/40,  below which would test 0.7130 and the 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) 0.7186 Session low
0.7280 (61.8% of 0.7375/0.7133) 0.7173 23 Feb low
0.7252 (50% of 0.7375/0.7133) 0.7145/40 22 Feb low /200 DMA
0.7246/37 23 Feb high /24 Feb high 0.7129 21 Feb low
0.7226 Minor 0.7125/15 100 DMA/55 DMA Converging/(50% of 0.6857/0.7375)

Economic data highlights will include:

Trade Balance, ANZ Business Confidence