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

By | January 30, 2018


EURUSD: 1.2379
EurUsd has traded with a heavy tone for much of the day as US yields pushed higher, with the 10years briefly breaching 2.7%. The pair has bounced off its lows of 1.2336 but it does look as though the correction could continue through Tuesday. The EU Q4 GDP and German January inflation figures are key data risks coming up.
1 hour/4 hour indicators: Turning lower Daily Indicators: Up Weekly Indicators:  Turning higher
Preferred Strategy:  With the short term momentum indicators pointing lower, a continuation of Monday’s correction lower would not surprise and a run back towards 1.2335 would seem possible, below which there is Fibo support at 1.2305. A break of 1.2300 would then allow a move towards 1.2225 although possibly not today.

With the daily/weekly charts still looking positive though, any weakness may be short lived and buying dips may still be the medium term trade.  The 100 MMA/200 MMA will provide stiff resistance, but above 1.2500 would then target 1.2538, beyond which would open 1.2650. In the meantime, look for the 100 MMA/200 MMA to cap it and selling into rallies is the near term plan.

Sell EurUsd @ 1.2430. SL @ 1.2505, TP @ 1.2325

Resistance Support
1.2537 25 Jan high 1.2360 Minor
1.2500 (38.2% of 1.6037/1.0340) 1.2336 Session low
1.2460 100 MMA 1.2317 200 HMA
1.2431 Session high 1.2305 (23.6% of 1.1553/1.2537)
1.2425 200 MMA 1.2270 Minor

Economic data highlights will include:

German CPI/HICP, EU Preliminary Q4 GDP, Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, US Case Shiller House Price Index, API Weekly Crude Oil Stock Inventory

USDJPY: 108.97
US$Jpy has regained some of the recent lost ground, finding support at 108.50 and climbing to test the Weekly cloud base at 109.20, underpinned by firmer US bond yields.
1 hour/4 hour indicators: Mixed – Turning higher Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:  The short term momentum indicators are now looking a little more positive and if 109.20 can be overcome, look for a run back towards 109.70/80 and possibly onto 110.00. The longer term charts still look heavy though and it may be that we do see a return towards the session low of 108.50, below which would head to the 26 Jan low of 108.27. A break of this would then find little to hold the dollar up until rising trend support at 107.50 and the 2017 low at 107.32.

Allowing for a dip, the short term momentum indicators do suggest that today we should be looking to buy into weakness, but with a tight SL in place.

Buy US$Jpy @ 108.60. SL @ 108.15, TP @ 109.70

Resistance Support
110.00 200 HMA 108.50 Session low
109.76 26 Jan high 108.27 26 Jan low
109.47 (23.6% of 111.38/108.27) 108.00 Minor
109.19 Session high /100 HMA /Weekly cloud base 107.80 Minor
109.00 Minor 107.45 Rising trend support

GBPUSD: 1.4070
Sterling was heavy due the internal Tory party politics on Monday, falling from a high of 1.4158 to a low of 1.4025, but has bounced a little into the NY close after finding good support at the 200 HMA.
1 hour/4 hour indicators: Turning lower Daily Indicators: Up Weekly Indicators:  Up
Preferred Strategy:  Sterling appears to have put in  a medium term top at the end of last week , and with the 4 hour charts pointing sharply lower and the dailies building a possible topping formation, selling rallies does now appear to be the plan. Below the Monday low, there is not too much support until 1.3850 although 1.4000 is likely to remain a strong psychological area. On the topside, minor resistance will be seen at 1.4100 and at 1.4150/60. Selling rallies is favoured. Note that BOE Governor, Mark Carney will be speaking late in the session.

Sell GbpUsd @ 1.4150. SL @ 1.4205, TP @ 1.4035



Resistance Support
1.4240 Minor 1.4050 Minor
1.4200 Minor 1.4035 (23.6% of 1.3039/1.4344)
1.4158 Session high/100 HMA 1.4027 Session low
1.4130 Minor 1.4000 Minor
1.4100 Minor 1.3945 Minor

Economic data highlights will include:                                                                                                                         

Mortgage Approvals, Consumer Credit, Net Lending, BOE Governor, Mark Carney Speech

USDCHF: 0.9376
US$Chf managed  creep a little higher on Monday, although the range was tight but looks as though it may want to extend a little further to the topside.
1 hour/4 hour indicators: Mixed  – Turning higher Daily Indicators: Down Weekly Indicators:  Neutral – Turning lower
Preferred Strategy:  As before, the longer term charts look heavy, and if the support at 0.9288 does get taken out we could head quickly to the August 2015 low at 0.9257, below which there is a black hole until around 0.9150.

The shorter term charts though look a little more positive and on the topside, minor resistance will be seen at 0.9380/85, a break of which could see the dollar carry on to the  26 Jan high 0.9430. Given the momentum of the 4 hour charts buying dips for the next 24 hours is preferred.

Buy US$Chf @ 0.9330. SL @ 0.9280, TP @ 0.9420

Resistance Support
0.9475 Minor 0.9350 Minor
0.9452 (23.6% of 0.9977/0.9288) 0.9326 Session low
0.9430 26 Jan high 0.9303 26 Jan low
0.9400 Minor 0.9288 25 Jan low
0.9386 Session high 0.9257 Aug 2015 low

AUDUSD: 0.8093
 AudUsd is pretty much unchanged today, sitting close to 0.8100, with traders sitting on their hands ahead of Trump’s SOTU, the FOMC meeting and the Aust Q4 CPI. The   HIA New Home Sales, NAB Business Conditions/Confidence (Dec) are due today.
1 hour/4 hour indicators: Up – Bearish Divergence Daily Indicators: Up – Becoming Overbought Weekly Indicators:  Neutral – Turning higher
Preferred Strategy:  The longer term uptrend remains intact, and if 0.8162 is taken out then we might expect to see a run towards 0.8200 and higher, with little resistance seen until 0.8245/90. The 4 hour charts are showing some bearish divergence and warn of a possible minor correction lower although good buying interest should be seen at around 0.8050/60 if we see it.


Resistance Support
0.8180 Minor 0.8100 Pivot
0.8162 May 2015 high 0.8073 Session low
0.8150 Minor 0.8055 200 MMA
0.8135 26 Jan high 0.8025 Minor
0.8117 Session high 0.8004 26 Jan low /Rising trend support

Economic data highlights will include:

HIA New Home Sales, NAB Business Conditions/Confidence (Dec)

NZDUSD: 0.7316
The Kiwi is at 0.7320 after a choppy session but so far holding on above critical support in the 0.7280/90 area ahead of the upcoming Trade Balance (exp -$125mio)
1 hour/4 hour indicators: Neutral Daily Indicators: Up – Possible topping formation. Weekly Indicators:  Turning higher
Preferred Strategy:   As before, the daily charts remain positive but look increasingly toppish, and selling rallies may now be the plan, although if the US$ remains under pressure it may be better to trade it through the crosses, possibly against the Aud?  Against the US$, the Kiwi needs to hold above 0.7280/90, below which would break below the rising trend support, possibly signalling that a longer term top is in place and opening the downside towards 0.7185/0.7215.
Resistance Support
0.7450 Minor 0.7300 Session low
0.7434/30 20 Sept high/25 Jan high 0.7290 26 Jan low /Rising trend support
0.7400 Minor 0.7280 (23.6% of 0.6780/0.7433)
0.7374 26 Jan high 0.7260 Minor
0.7363 Session high 0.7235 Minor

Economic data highlights will include:

Trade Balance (Dec)