28 July: Forecast: FX: US$/Majors

By | July 28, 2017

 

EURUSD: 1.1677
24 Hour: Prefer to sell rallies Medium Term: Mildly Bullish
EurUsd, having reached a new 2 ½ year high at 1.1776 in Asia, has since spent the rest of the session correcting lower, finishing the day near the lows of 1.1650.

Having headed into strong resistance within the band of 1.1735/1.1790, the Euro pulled up short of the 200 WMA, which will continue to act as a formidable hurdle, if/when we get there.  In the meantime, sellers will again arrive in the 1.1700/75 area and given the look of the short term momentum indicators anything above 1.1700 may be a sell area today. The dailies are also warning the longs although the weeklies still point higher, and a break of 1.1800 could mean that we on our way to 1.2000 and potentially to 1.2150.

On the downside, near term support arrives at 1.1650, ahead of the May 2016 high/pivot of 1.1616 which has successfully underpinned the Euro in recent 26 Julys. A downside break of 1.1600 could then see a run back towards 1.1560/80 and possibly to 1.1500.

Preferred Strategy: Given the negative look of the short term momentum indicators selling at around 1.1725, with a SL placed above 1.1790 may be a plan today.

Resistance Support
1.1850 Minor 1.1649 Session low
1.1790 200 WMA 1.1612 26 July low /(23.6% of 1.1118/1.1776)
1.1776 26 July high 1.1580 Minor
1.1745 Minor 1.1550 Minor
1.1710 Minor 1.1525 (38.2% of 1.1118/1.1776)


USDJPY: 111.26
24 Hour: Neutral Medium Term: Neutral
US$Jpy has been choppy on Thursday, falling to meet the rising trend support at 111.75 before bouncing to 111.70 and then retreating once more to 111.00 before ending the day at 111.25. The dollar now looks mixed and a neutral stance is required, with direction to be decided by the US data, although there is plenty of Japanese data today as well.

Another downside break of 111.00 would allow a return to the trend support at 110.75, a break of which would find bids at 110.55/65 and possibly to 110.15.

On the topside, minor resistance will be seen at 111.35 and then again at 111.70 and at 111.90/112.00,above which we could see a return to 112.20.

Preferred Strategy: Neutral

Resistance Support
112.19 26 July high 111.10/05 200 WMA
111.95/112.00 100 WMA /200 DMA 110.77 Rising trend support /Session low
111.85 Minor 110.64/62 16 June low/24 July low
111.70 Session high 110.55 (61.8% of 108.12/114.50)
111.35 100 HMA 110.30 Minor

Economic data highlights will include:

CPI, Unemployment, Retail Trade



GBPUSD: 1.3065
24 Hour: Neutral Medium Term: Neutral
Having reached a new 12 month high of 1.3158, Cable has now retreated following the release of the stronger US data to finish the day at 1.3060, just above session lows.

The short term momentum indicators look a little heavy now, and on the downside minor support lies at 1.3050 and 1.3020 ahead of 1.3000. Below Monday’s low of 1.2983 could then see a return to 1.2940/50 which would find added support at the 20 July low of 1.2933.

On the topside, 1.3100 and then the session/trend high at 1.3158 will provide decent resistance, above which there is little to stop Cable heading on towards 1.3200 and then to 1.3280. Above there would be increasingly bullish, possibly opening up the major Fibo pivot at 1.3420 (50% pivot of 1.5017/1.1821) although this currently remains over the horizon.

Preferred Strategy: Neutral

Resistance Support
1.3250 Minor 1.3049 Session low
1.3200 Minor 1.3020 (23.6% of 1.2588/1.3158)
1.3158 Session high 1.2998 26 July low
1.3120 Minor 1.2952 21 July low
1.3100 Minor 1.2940 (38.2% of 1.2588/1.3158)

Economic data highlights will include:

Consumer Confidence



USDCHF: 0.9647
24 Hour: Mildly Bullish Medium Term: Neutral
US$Chf is firm today after EurChf ran stops on the break of 1.1200, taking out the 2016 high and reaching a post-January 2015 floor-break high at 1.1276. In the process, the cross took out the 200 WMA for the first time since 2008. US$Chf, for its part, is up at 0.9660 and looks as though it is headed on towards 0.9700+.

The 4 hour/daily momentum indicators do look more constructive today and if 0.9700/10 can be overcome then we could see a quick run higher although the weekly momentum indicators do hint that eventually the dollar is headed lower.

On the topside, above 0.9700/10 could see a quick run to 0.9765, above which could then climb to 0.9800/25 and then to 0.9845.

On the downside, minor support lies at 0.9600/20 ahead of what may be the neckline of a reverse H/S formation at 0.9585. Back below there would head back to the 200 WMA and then towards 0.9500 although this currently looks unlikely.

Preferred Strategy: Either look to buy the neckline (0.9585) or to buy a break of 0.9710. Both with a 50 point stop but looking for a 150 point gain.

Resistance Support
0.9765 (50% pivot of 1.0100/0.9437) 0.9620 Minor
0.9740 Minor 0.9600 Minor
0.9710 Descending trend resistance 0.9585 Neckline
0.9700 14 July high 0.9555 200 WMA
0.9661 Session high 0.9530 200 HMA


AUDUSD: 0.7966
24 Hour: Neutral Medium Term: Neutral – Possibly look to buy dips.
Having climbed to 0.8065 in Asian trade on Thursday, the Aud has since retreated and is closing just above session lows of 0.7955.

The short term momentum indicators suggest that further minor losses may be in store and the dailies are also beginning to look rather overstretched on the topside. If we do head down, then below 0.7955 would find bids at 0.7930 and at 0.7890/00 ahead of the strong area at 0.7875.

On the other hand, the longer term charts still hint that buying dips remains the medium term plan, and if we head back above 0.8000, the 200 WMA will again provide a hurdle ahead of the 0.8065 high. In the meantime, we may hang around the 100 MMA (0.7975) today, although a monthly close above it (Monday) would reinforce the view of heading higher, and above 0.8065 there is little to stop the Aud from heading to 0.8160.

Preferred Strategy: Neutral.

Resistance Support
0.8162 May 2015 high 0.7975 100 MMA
0.8100 Minor 0.7955 Session low
0.8065 26 July high 0.7930 200 HMA
0.8015 200 WMA 0.7890 (23.6% of 0.7328/0.8065)
0.7985 Minor 0.7874 21 July low /26 July low

Economic data highlights will include:

PPI (Q2)



NZDUSD: 0.7487
24 Hour: Prefer to sell rallies Medium Term: Neutral -Prefer to buy dips
As with the Aud, the Kiwi has retreated from the Asian high of 0.7557 and is now just above the day’s low of 0.7480 and looks heavy.

The short term momentum indicators are pointing lower and we could be in for a run towards 0.7430 and possibly back to 0.7400, below which could then head towards 0.7370 although this still looks to be over the horizon. The dailies are yet to turn lower though, so I would not expect too much today and it may be that we sit around here while waiting on the US data.

The weekly charts still suggest that further medium term gains look likely, and back above 0.7500 could eventually revisit the session high, beyond which there is little resistance to stop the Kiwi from heading on towards 0.7575. Above that there is nothing to stop it heading to 0.7740/45 (April 2015 high).

Preferred Strategy: Neutral. Possibly look to sell rallies today, above 0.7500, but not looking for too much.

Resistance Support
0.7575 May 2015 high 0.7480 Session low
0.7557 Session high 0.7455 Minor
0.7545 100 MMA/55 MMA 0.7430 100 HMA
0.7525 Minor 0.7400 25 July low
0.7500 Minor 0.7380 (23.6% of 0.6817/0.7557)