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

By | January 3, 2018

 

EURUSD: 1.2061
€/Usd has traded up to a new trend high of 1.2081 before retreating as US yields began to underpin the dollar and  it has since traded a choppy range above what is now minor support at 1.2025.

The charts look constructive and the dailies seem to suggest a move to test the 8 Sept high of 1.2098, beyond which, would then open up the chance of a move towards 1.24 (200 MMA).

1 hour/4 hour indicators: Mixed. Daily Indicators: Turning higher Weekly Indicators:  Neutral
Preferred Strategy:  The medium term charts hint at further gains, so for Wednesday buying dips again seems to be the plan. German Unemployment, ISM and FOMC Minutes coming up  today.

Buy EurUsd @ 1.2000. SL @ 1.1950, TP @ 1.2120

Resistance Support
1.2180 Minor 1.2025 Minor
1.2160 (50% pivot of 1.3993/1.0340) 1.2000 Minor
1.2120 Minor 1.1980 Minor
1.2091 8 Sept high 1.1955 (23.6% of 1.553/1.2025)
1.2080 Session high 1.1920 Minor

Economic data highlights will include:                                      

W: German Unemployment, US ISM Mfg PMI/Prices Paid, Construction Output, FOMC Minutes, Total Vehicle Sales, API Weekly Crude Oil Stock Inventory



USDJPY: 112.22
After squeezing up to a high of 112.78, US$Jpy headed lower again but still holds above strong support in the 111.95/05 area. The dailies are starting to look a little more heavy and we may see a more concerted test of the downside but if the support holds, then expect further range trade in the 112/113 area until the NFP, due on Friday.
1 hour/4 hour indicators: Mixed. Daily Indicators: Turning lower? Weekly Indicators:  Neutral
Preferred Strategy:   The dailies seem to suggest that we could see a more sustained test of 111.95/05, below which would open the way to the 200 DMA at 111.65.

On the other hand the short term momentum indicators are mixed and if 112.80 can be overcome we could then see a return to 113.00 and above, where 113.30/35 should see sellers ahead of the December high of 113.75.

Most likely a range of 111.80/112.80 would not surprise for the coming session.

Range trade@ 111.80/112.80. SL 30 points either side.

Resistance Support
113.75 12 Dec high 112.05 Session low
113.57 14 Dec high 112.02 15 Dec low
113.35 Minor 111.95 (61.8% of 110.83/113.75)/6 Dec low/100 DMA
112.99 28 Dec low 111.65 200 DMA
112.75 Minor 111.52 (76.4% of 110.83/113.75)

Economic data highlights will include:

W:  Nikkei Mfg PMI



GBPUSD: 1.3593
Sterling headed higher again on Tuesday, reaching 1.3599 closing on its highs, with traders eying a possible early BOE rate hike on the back of rising inflation. The  UK Construction PMI is due today.

With the momentum indicators looking positive, a move above 1.1.3600 would open 1.3650, above which there is little to stop it heading on to 1.3780.

1 hour/4 hour indicators: Up. Daily Indicators: Turning higher

 

Weekly Indicators:  Turning higher?
Preferred Strategy:   The short term momentum indicators are mixed but the dailies look constructive so, as with the Euro, buying dips currently seems to be the plan while keeping a tight stop in place.

Buy GbpUsd @ 1.3560. SL @ 1.3490, TP @ 1.3650

Resistance Support
1.3700 Minor 1.3550 Minor
1.3670 Minor 1.3520 Minor
1.3656 20 Sept high 1.3500 Minor
1.3620 Minor 1.3480 Minor
1.3599 Session high 1.3465 (23.6% of 1.3038/1.3599)

Economic data highlights will include:

W: UK Construction PMI



USDCHF: 0.9716
US$Chf has broken the base of the double bottom in falling to 0.9699 today although a bounce sees it now trade at 0.9715, not too far from the previous session’s close. With the daily charts pointing lower, a stronger test of 0.9700 and potentially 0.9650 would not surprise in the days ahead.
1 hour/4 hour indicators: Mixed –Turning lower? Daily Indicators: Neutral – Turning lower? Weekly Indicators:  Neutral
Preferred Strategy:  The dailies are beginning to look heavy and so in the short term, selling rallies at the support-turned-resistance, at 0.9780 would seem to be the plan today.

Sell US$Chf @ 0.9770. SL @ 0.9810, TP @ 0.9660

Resistance Support
0.9850 Minor 0.9699 Session low
0.9825 Minor 0.9685 Minor
0.9795 Minor 0.9655 (61.8% of 0.9420/01.0037)
0.9780 100 DMA/200 DMA 0.960 Minor
0.9750 Session high 0.9600 Minor


AUDUSD: 0.7828
 AudUsd traded up to 0.7844 on Tuesday, once again underpinned by strong commodity prices. While the short term momentum indicators look a little heavy, the dailies remain constructive and as with elsewhere, the US$ looks set to remain under pressure  although, with the Aud now having lost its risk premium over the US$, I am wary of buying it at these levels
1 hour/4 hour indicators: Possible topping formation. Daily Indicators: Turning higher Weekly Indicators:  Neutral –Turning higher?
Preferred Strategy:   If the US dollar remains weak though, a medium term move towards 0.8000 should not be ruled out. The short term momentum indicators actually now point a little lower so a move back towards 0.0.7790/0.7800 today would not surprise for the coming session but buying dips seems to be the plan. Stand aside.
Resistance Support
0.7900 Minor 0.7815 Minor
0.7883 19 Dec 0.7790 Session low
0.7865 Minor 0.7780 100 DMA
0.7845 Session high 0.7765 (23.6% of 0.7500/0.7825)
0.7835 Minor 0.7740 200 HMA

Economic data highlights will include:

W: HIA New Home Sales



NZDUSD: 0.7099
The Kiwi reached 0.7130 on Tuesday before a retreat, to close back just above 0.7100, where the 200 DMA/55WMA is acting as a magnate.
1 hour/4 hour indicators: Possible topping formation? Daily Indicators: Turning higher Weekly Indicators:  Turning higher
Preferred Strategy:  The outlook is pretty much the same as that for the Aud and a neutral stance is currently needed. The short term momentum indicators are showing some bearish divergence and a drift back towards 0.7080 would not surprise but buying dips seems to be the plan.
Resistance Support
0.7165 Minor 0.7080 Minor
0.7150 Minor 0.7065/70 100 WMA/100 DMA
0.7130 29 Dec high 0.7045 (23.6% of 0.6787/0.7130)
0.7115 Minor 0.7020 Minor
0.7100/05 55 WMA  /200 DMA 0.7000 (38.2% of 0.6787/0.7130)