3 Apr: Forecast: FX: US$/Majors + trade ideas

By | April 3, 2018

 

 

EURUSD: 1.2302
EurUsd has chopped around within the pre- Easter range, settling again at 1.2300, initially trying the topside in reaching 1.2344, but overall weighed down by selling in EurJpy, and with the US$ mildly underpinned by the decent ISM data.
1 hour/4 hour indicators: Neutral – Turning lower? Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  It looks like being another choppy day ahead although the 4 hour charts do look a bit heavy.

If so, 1.2280 will provide the initial support, below which, look for a move to the 21 March low at 1.2240 and then to the major rising trend support  trend support at 1.2215 and then possibly towards Fibo support at 1.2170 although that seems some way off right now.

On the topside, nearby resistance will be seen at 1.2330 and at the session high at 1.2345 ahead of 1.2370 and 1.2400. Beyond there could then return to 1.2420, but seems unlikely today.

Given the speculative long Euro positioning, I mildly prefer the downside and would look to sell rallies although ahead of Fridays US jobs data it may be that we chop around current levels.

Sell EurUsd @ 1.2325. SL @ 1.2375, TP @ 1.2220

Resistance Support
1.2400 Minor 1.2281 Session low / Minor Rising trend support
1.2370 Minor 1.2265 Minor
1.2355 200 HMA 1.2240 21 Mar low
1.2330 100 HMA 1.2215 Major Rising trend support
1.2345 Session high 1.2170 (38.2% of 1.1553/1.2555)

Economic data highlights will include:

T:  German Retail Sales – Feb, EU Mfg PMIs, US ISM Index – Business Conditions, Economic Optimism, Total Vehicle Sales, API Weekly Crude Oil Stock Inventory, Fed’s Kashkari Speech

W:  EU Preliminary CPI – Mar, EU Unemployment, US Markit Manufacturing/Services/Composite PMIs Services/Composite PMIs, ISM Non-Mfg PMI, ADP Jobs data – Mar,  Factory Orders – Feb, EIA Crude Oil Stocks Weekly Change Fed’s Mester Speech

T: German Factory Orders – Feb, EU Services/Composite PMIs, EU PPI, Retail Sales, ECB Monetary Policy Meeting Accounts, US Trade Balance, Jobless Claims

F: German Industrial Production, US Jobs/NFP/Average Hourly Earnings data, Baker Hughes Oil Rig Count



USDJPY: 105.86
US$Jpy continues to trade heavily because of the decline in risk sentiment and the demand for a safe haven funding tool, which is underpinning the Jpy on all fronts.  The new quarter has begun with fresh equity-led de-risking and consequent Jpy haven buying.
1 hour/4 hour indicators: Turning lower. Daily Indicators: Turning higher? Weekly Indicators:  Turning lower
Preferred Strategy:  The momentum indicators generally look mixed today, although the short term momentum indicators do look heavy  but we are now back at the 200 MMA 105.60, which could continue to act as a pivot in the sessions ahead.

On the topside, resistance will be seen at 106.00 and at the session high at 106.45 although this seems unlikely to be bothered today. If wrong, we could yet see a return to 107.00 but I doubt it.

The longer term charts are pointing lower, while the dailies are rather non committal and still actually look mildly positive. If we do head down again, a move back below the 200 MMA would open the way to 105.30, a break of which would allow a return to 104.60. Below that, there is little to support the dollar until 103.50.

The weeklies and monthlies are beginning to point increasingly towards a test of 100.00, so as before, selling rallies is preferred.

Sell US$Jpy @ 106.20. SL @ 106.85, TP @ 104.80

Resistance Support
107.28 13 Mar high 105.80 200 HMA
107.00 (23.6% of 113.75/104.60)/28 Mar high 105.65/60 Session low /200 MMA
106.70 Minor 105.31 28 Mar low
106.45 Session high 104.90 Minor
106.20 100 HMA 104.60 26 Mar low

Economic data highlights will include:

T:

W:  Japan Services PMI

T:

F: Japan Leading Economic Index, Coincident Index



GBPUSD: 1.4050
Cable traded a choppy session within 1.4015/77 on Monday, closing in the middle, with a similar outlook being possible today although the UK Manufacturing PMI is due and may cause some directional trade.
1 hour/4 hour indicators: Neutral. Daily Indicators:  Turning lower? Weekly Indicators:  Turning Neutral
Preferred Strategy:   A neutral stance seems wise today and a range of 1.40/1.41 would seem to have it covered. Brexit headlines, both good and bad, are always around the corner and so a longer term cautious outlook it also required and right now there seem to be better things to trade.
Resistance Support
1.4200 28 Mar high 1.4015 Session low
1.4560 100 HMA 1.4010 28 Mar low
1.4130 Minor 1.4000 Minor
1.4100 200 HMA 1.3977 (50% of 1.3715/1.4243)
1.4077 Session high 1.3950 Minor

Economic data highlights will include:

T:  UK Mfg PMI

W:  UK Construction PMI

T:  UK Services PMI

F:



USDCHF: 0.9551
US$Chf traded a range of 0.9525/65 today with little new to provide any real inspiration.
1 hour/4 hour indicators: Neutral Daily Indicators: Neutral Weekly Indicators:   Neutral
Preferred Strategy:  The momentum indicators look neutral today and a cautious stance is required. The dailies also seem to have run out of their previous upside steam, so some choppy price action near current levels looks to lie ahead although out of choice I still prefer to look to buy dips..

On the topside the immediate resistance will again be seen at 0.9565, at 0.9585 beyond which would head towards the 0.9615 Fibo level. Further out, 0.9640 and 0.9665 will see sellers.

On the downside, support will be seen at 0.9525 and then at 0.9500/05 ahead of the chance of a reversal back to 0.9460 although unlikely today I think. Sidelined – possible range trade, but prefer to look to buy dips.

Resistance Support
0.9666 18 Jan high 0.9540 Minor
0.9640 22 Jan high 0.9526 Session low
0.9610 (50% pivot of 1.0037/0.9187) 0.9500 200 HMA
0.9583 28 Mar high 0.9458 28 Mar low
0.9564 Session high 0.9421 14 March low /(38.2% of 0.9187/0.9577)

Economic data highlights will include:

T:

W:

T:  CPI – Mar

F:



AUDUSD: 0.7659
The Aud has had another tough session in falling to a low of 0.7650 before closing at 0.7660, with traders concerned about what the prospect of a trade war might have on Australian trade. The RBA will meet today. No change is expected and any directional move will come via the Statement.
1 hour/4 hour indicators: Turning lower? Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:   While the momentum indicators are a little mixed, the dailies are heading south so I still prefer the downside while trade war concerns dominate traders focus. I also think the US/AU yield differential will eventually weigh increasingly heavily on the Aud,

If correct, the initial support today will arrive at 0.7645/50 and then at the 100 WMA (0.7625). Below this would then move towards the major rising trend support from January 2016, at 0.7580, although that may take a while.

On the topside, resistance will be seen today at 0.7690/0.7700, 0.7725 and at 0.7750/55. Above there could stretch back to 0.7765 and to 0.7785 although this seems doubtful. Selling rallies is preferred.

Sell AudUsd @ 0.7690 SL @ 0.7730, TP @ 0.7590

Resistance Support
0.7785/79 200 MMA/21 Mar high 0.7650 Session low
0.7752 (38.2% of 0.7916/0.7653) 0.7645 (50% pivot of 0.7160/0.8135)
0.7725 200 HMA/100 HMA 0.7625 100 WMA
0.7702 28 Mar high 0.7580 Rising trend support
0.7694 Session high 0.7550 Minor

Economic data highlights will include:

T:  AIG Performance of Mfg Index ANZ Job Ads, RBA Interest Rate Decision/Statement

W:  Retail Sales – Feb, Building Permits – Feb, Caixin China Services PMI – Mar

T:  AIG Performance of Services Index, Trade Balance – Feb

F:



NZDUSD: 0.7212
 The Kiwi is heavy today, but currently holding on above 0.7200 having earlier reached a session high of 0.7240. The Global Dairy Trade Index is due in London trade.   The futures markets are pricing in a 1%-2% fall in milk powder prices and a lower result should be a negative headline for the Kiwi.
1 hour/4 hour indicators: Turning lower Daily Indicators:  Neutral Weekly Indicators:  Turning Neutral
Preferred Strategy:   The Kiwi looks mildly heavy right now but the longer term charts are fairly neutral and a cautious approach is required.

Overall, I still prefer the downside, although the dailies are neutral so I am not expecting too much. The short term momentum indicators do look a bit heavy though and back below 0.7210/0.7200 would allow a run to 0.7185 and then to 0.7150/55, below which, 0.7140 and 0.7110 would attract.

On the topside, minor resistance will be seen at 0.7240/50 above which there is not a lot to stop a return to 0.7300, albeit probably not today.

Resistance Support
0.7305 (76.4% of 0.7354/0.7153) 0.7201 24 March low
0.7303 28 Mar high 0.7185/87 200 DMA /28 Mar low/Rising trend support
0.7280 Minor 0.7153 21 Mar low
0.7260 Minor 0.7140 100 DMA
0.7247 30 Mar high 0.7110 (50% pivot of 0.6780/0.7336)

Economic data highlights will include:

T:  NZIER Business Confidence Q1, Global Dairy Trade Index

W:  ANZ Commodity Price Index

T:

F: