3 Mar: Forecast: FX: US$/Majors

By | March 3, 2017


EURUSD: 1.0505

EurUsd remains heavy on Thursday but at this stage is holding on above the recent 1.0493 support after trading a 1.0495/1.0551 range.

Both the 4 hour and the daily charts are now hinting of further attempts to the downside in the sessions ahead and the possibility of a break of the 1.0493 support, beneath which there is not too much to hold the Euro up ahead of the 11 January low of 1.0453. Below there suggests a run to much lower levels, with a return to the early January low of 1.0340 not being out of the question  A return to the topside will find offers today at 1.0550 and then again at 1.0600 although this looks unlikely today. If wrong, then above here would allow a run towards 1.1.0630/35. Trading from the short side and looking to sell rallies seems increasingly to be the play.

24 Hour: Mildly bearish Medium Term: Growing bearish
Resistance Support
1.0678 16 Feb high 1.0494/93 Session low/22 Feb low
1.0630/35 1 Mar high/(76.4% of 1.0678/1.0493) 1.0453 11 Jan low
1.0600 Minor 1.0420 Minor
1.0588 1 March high 1.0400 Minor
1.0551 Session high 1.0335 Minor

Economic data highlights will include:

EU Services/Composite PMIs, EU Retail Sales,  US Services/Composite PMIs, ISM Non- Mfg PMI, Fed Speeches; Yellen, Evans, Lacker, Fischer, Powell

USDJPY: 114.46

US$Jpy has made some good gains on Thursday, as a Fed rate hike looms into view. Further gains look possible, although note that we are now approaching the end of the Japanese Financial Year and good offers are said to be lining up as we approach 115.00 and above, with exporters looking to repatriate the year’s profits. We are also at strong descending trend resistance which may prove a tough hurdle to break in the coming session.

The short term indicators suggest that we may see a bit of profit taking if the dollar is at these levels when Tokyo get going, but the 4 hour charts do remain positive and the dailies seem to be picking up some momentum, so buying dips still seems to be the plan. Above the 114.59 highs would take us on towards the recent trend high of 114.95 and then towards 115.50 although I doubt we see the dollar up here today. On the downside, the initial minor support sits at 114.20/00, below which 113.85/90 will see bids, if we were to see it, which I doubt. Buying dips towards/below 114.00 seems to be the plan, looking for higher levels, for what could be a reverse head/shoulder formation, with an eventual objective of around 118.30.

GBPUSD: 1.2259

Cable has taken out the strong 1.2260 support late in the US session and currently sits just above the session lows of 1.2242.

The 4 hour momentum indicators are pointing lower, and the dailies also seem to be picking up increasing downside momentum so it appears as though Cable will stay under pressure in the session ahead. If so, below the session low would open the way towards 1.2200 and lower, towards 1.2150/55, which should be strong, if we see it. On the topside, the initial resistance will be seen at 1.2280 and again at the session high of 1.2307, which might prove a decent sell area if we see it. If wrong, then above here would then head back above 1.2320 and eventually to 1.2370, albeit unlikely today. Prefer to trade from the short side, but with tights stops in place.

USDCHF: 1.0136

US$Chf is bid at the end of the Thursday session, currently at session highs of 1.0145.

The momentum indicators are now aligning to point higher and further gains would seem very possible.  If so, on the topside, above the cloud top at current levels, resistance will be seen at 1.0160 and at 1.0200, beyond which could head to the January 11 spike high at 1.0247. On the downside, back below 1.0100, support will be seen at 1.0080/85, a break of which could see a run back to 1.0050 and even to 1.0020, although possibly not today. The preference remains to buy dips, with a SL placed sub 1.0050.

24 Hour: Mildly bullish Medium Term: Prefer to buy dips
                                         Resistance Support
1.0247 11 Jan high 1.0100 Minor
1.0229 (76.4% of 1.0343/0.9861) 1.0083 Session low /200 HMA
1.0200 Minor 1.0052 1 March low
1.0160 (61.8% of 1.0343/0.9861) 1.0025 Minor
1.0145 Session high/Daily cloud top 1.0008 1 Mar low

AUDUSD: 0.7570

The Aud finally broke to the downside, weighed down by the stronger US$ and the selloff in commodities.

The indicators are looking increasingly bearish and selling rallies trading from the short side increasingly appears to be the plan. Resistance will be seen at 0.7585 and at 0.7600, which if seen would appear a decent level to get short. Above here would target 0.7630 and 0.7650 although that looks increasingly distant. On the downside, we are currently at session lows at 0.7550, below which could head to 0.7520 and then to 0.7490/0.7500, which should be strong support. Below this, further bids will be seen at 0.7450 although possibly not today. Trading from the short side and selling rallies is increasingly favoured.

24 Hour: Mildly bearish Medium Term: Mildly bearish
Resistance Support
0.7670 (61.8% of 0.7740/0.7561) 0.7557 Session low
0.7650 (50% of 0.7740/0.7561) 0.7520 (38.2% of 0.7160/0.7740)
0.7630 (38.2% of 0.7740/0.7561) 0.7500 Minor
0.7603 (23.6% of 0.7740/0.7561) 0.7493 19 Jan low
0.7585 Minor 0.7450 (50% of 0.7160/0.7740)

Economic data highlights will include:

RBA Gov, McDermott Speech, AIG Services Index, China Caixin Services PMI

NZDUSD: 0.7062

The Kiwi is down another 100 points today as the downside momentum increases and is currently sitting on trend support at 0.7050 which looks as though it will imminently give way.

If so, there is not a whole lot of support to hold it up until 0.6980 although 0.7000 will probably see some decent support. On the topside, resistance will be seen at 0.7085 and at 0.7100, which if seen would be a decent sell opportunity, I suspect. Trading from the short side and selling rallies is increasingly favoured.

24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
0.7175 200 HMA 0.7050 (61.8% of 0.6851/0.375)/Rising trend support /Session low
0.7150 Minor 0.7025 Minor
0.7125 (23.6% of 0.7375/0.7050) 0.7000 Psychological
0.7100 Minor 0.6977 (76.4% of 0.6851/0.375)/
0.7085 Minor 0.6950 Major rising trend support