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

As before, ideally the Euro should hold below1.1670 on a daily-close basis, this being the 100 DMA and the neckline of the head/shoulder formation, but a topside break would trigger stops and could see a run back to 1.1700+. The 4 hour charts still suggest that this is a possibility so I would be cautious, but overall, as long as we don’t see a daily close above 1.1700, I prefer to trade from the short side. In the longer term, with the head shoulder trade now fully in play, the target is at around 1.1250, and with the longer term momentum indicators pointing lower I still think we will head in this direction, and to add to the position into any near term strength. Back below 1.1600 will find strong support at 1.1575 and then again at 1.1510.

Sell EurUsd @ 1.1670 & @ 1.1700. SL @ 1.1730, TP @ 1.1500.

The outlook remains unchanged and, technically, the short term momentum indicators still look mixed/flat, so a fairly nimble stance is required although the 4 hour charts still seem to be mildly positive. If so, on the topside, back above the 1 Nov high (114.27) would open the way to 114.45/50, an increasingly strong hurdle to overcome, but above which could see a test of the descending trend resistance, now at around 114.90. A break of 115.00 would then see little resistance until 115.20 and then 115.50.

On the downside, minor support will be seen at 113.75 and at the session low at 113.53, below which could then head back to the 31 Oct low (112.95) although this seems unlikely today. If wrong, a sustained break of 113.00 would see us back in the previous 112/113 range, where 112.75 would be the first level of support ahead of 112.30.

I remain fairly neutral, although I still like the dollar in the medium term. Wait for the NFP and go with the flow.

The short term momentum indicators now look heavy, albeit becoming oversold, and a break of the session low would allow for a run towards 1.3025 and then 1.3000, below which could see 1.2980 and lower.

On the topside, resistance will be seen at 1.3080 and then at the minor Fibo levels listed below. Stay square for now.

The short term momentum indicators are flat and we should probably expect little interest for much of the session until the US employment figures are released, but with the daily momentum indicators generally looking positive, further dollar strength could be in store. If so, above 1.0040, there is little to hold the dollar up ahead of 1.0100, and beyond that to 1.1025 and 1.0170.

On the downside, support will be seen at 0.9940/50 and then again at 0.9900 although it would take a soft NFP number to see it down here I suspect.

For now, look for the dollar to chop around current levels, but with the view of buying dips for an eventual move towards 1.1000+.

Buy US$Chf @ 0.9940. SL @ 0.9990, TP @ 1.0070.

With both the neckline of the head/shoulder formation and the 200 DMA having now been broken, and with the short term momentum indicators looking a bit more positive, further gains could be in store and a move of 0.7740/50 would not really surprise although it may take a decent Services PMI form Australia/China to take us there.

On the downside, support will be seen at 0.7700 and then again at 0.7670, although this seems unlikely to be seen, at least until the US jobs data.

Look for a choppy session and then go with the flow after the NFP release although the upside currently looks mildly favoured. A strong NFP number would quickly alter that theory I suspect, with the US$ likely to see a decent lift.

Sell AudUsd @ 0.7740. SL @ 0.7775, TP @ 0.7675

The 4 hour/daily momentum indicators  are looking a little more positive and further gains, above 0.6940 could see a run towards 0.6960/70 and then on to 0.7000 although this will depend on a weak NFP reading.

On the downside, a move back below the session low of 0.6882 could then see a return to 0.6860, below which would find strong support at 0.6830 and again at 0.6817, where we have a double bottom with the May low. Below that though would then find that there is little support ahead of 0.6670 although I don’t think we head anywhere close for the time being.