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

By | April 4, 2018



EURUSD: 1.2269
EurUsd has been under pressure since the EU PMI release, breaking the rising trend support and falling to 1.2253 ahead of a mild bounce. The Euro is looking increasingly heavy and will immediately focus on the EU CPI, but may move sideways while waiting on Friday’s NFP reading
1 hour/4 hour indicators: Turning lower? Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  It could be another choppy day ahead, with the daily charts giving no real hint in either direction although the 4 hour charts still look a bit heavy and if we go below the session low, then the way will open to the 21 March low at 1.2240 and then to the major rising trend support trend support at 1.2220. Below there, we could possibly head towards Fibo support at 1.2170 although that seems some way off right now and may be a target for the NFP on Friday.

On the topside, nearby resistance will be seen at 1.2300, at the session high of 1.2335 and at the 2 Apr 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 @ 1.2300. SL @ 1.2350, TP @ 1.2220

Resistance Support
1.2370 Minor 1.2281 2 Apr low / Minor Rising trend support
1.2345 2 Apr high/200 HMA 1.2253 Session low
1.2335 Session high 1.2240 21 Mar low
1.2300 Minor 1.2220 Major Rising trend support
1.2285 Minor 1.2170 (38.2% of 1.1553/1.2555)

Economic data highlights will include:

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

USDJPY: 106.56
US$Jpy has turned higher in sympathy with stocks and now looks a little more constructive on the charts although good resistance still lies above 107.00.
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning higher? Weekly Indicators:  Turning lower
Preferred Strategy:  The momentum indicators generally look a little more constructive today and if we can take out the NY high then we could see an approach on 107.00. This should be strong resistance although a sustained break could run up to 107.30 and potentially to 107.65 or even 107.90/00 although I don’t see this happening ahead of the NFP on Friday.

On the downside, minor support will be seen today at 106.30, 106.00, and 105.80 and at the session low of 105.68 although below 106.00 would surprise.

Further out, with a bearish outlook on stocks, if US$Jpy does head down again, a move back below the 200 MMA (105.60) 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.

Resistance Support
107.67 27 Feb high 106.30 100 HMA
107.28 13 Mar high 106.00 Minor
107.00 (23.6% of 113.75/104.60)/28 Mar high 105.80 200 HMA
106.80 Minor 105.68/60 Session low /200 MMA
106.65 Session high/Descending trend resistance 105.31 28 Mar low

Economic data highlights will include:

Japan Services PMI

GBPUSD: 1.4060
Cable traded a choppy session on Tuesday (1.4020/1.4088) but has generally been underpinned against the Euro following the better than expected UK Manufacturing PMI. The Services PMI will be the local focus ahead today.
1 hour/4 hour indicators: Neutral. Daily Indicators:  Neutral Weekly Indicators:  Turning Neutral
Preferred Strategy:   A neutral stance seems wise again 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 1.4020 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)
1.4088 Session high 1.3950 Minor

Economic data highlights will include:

UK Construction PMI

USDCHF: 0.9587
US$Chf traded a little higher today but within a relatively tight range of 0.9533/96 with the US$ mildly underpinned by the slide n the Euro. The momentum indicators look mildly constructive but above 0.9700 resistance will become a little more solid.
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning higher Weekly Indicators:   Neutral
Preferred Strategy:  The momentum indicators look mildly bullish today but a cautious stance is required as we approach 0.9600 although out of choice I still prefer to look to buy dips.

On the topside the immediate resistance will be seen at 0.9600/10 and at.0.9625 beyond which would head towards 0.9650 and 0.9665. Further out, 0.0.9700 would attract.

On the downside, minor support will be seen 0.9550 and then at 0.9525/30 and at 0.9500/05 ahead of the chance of a reversal back to 0.9460 although unlikely for a while I think. Sidelined – possible range trade, but prefer to look to buy dips towards 0.9550 with a SL placed under 0.9525.

Resistance Support
0.9666 18 Jan high 0.9555 100 HMA
0.9652 200 DMA 0.9532 Session low
0.9625 (38.2% of 1.0343/0.9187) 0.9526 2 Apr low
0.9610 (50% pivot of 1.0037/0.9187) /100 DMA 0.9500 (23.6% of 0.9187/0.9596)
0.9596 Session high 0.9458 28 Mar low

AUDUSD: 0.7685
The Aud has had another choppy session but having recovered from early lows to reach a session high of 0.7706, the pair was unable to sustain its gains and is closing heavy, at 0.7680, ahead of today’s  Retail Sales (exp +0.3% mm) and Building Permits (exp -0.7% mm)
1 hour/4 hour indicators: Neutral Daily Indicators: Turning higher? Weekly Indicators:  Neutral
Preferred Strategy:   While the momentum indicators are a little mixed today, a cautious stance is required ahead of the local data.  The Aud has currently found a base in the 0.7645/50 range, and this needs to be taken out in order to allow further downside progress towards the next major level, at 100 WMA (0.7625). Below this would then move towards the major rising trend support from January 2016, at 0.7590, although that may take a while.

On the topside, resistance will again be seen today at 0.7700/10, 0.7725 and at 0.7745/50. 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 0.7651/47 (76.4% of 0.7501/0.8135)/ Session low
0.7746 (38.2% of 0.7916/0.7642) 0.7645/42 (50% pivot of 0.7160/0.8135)/29 Mar low
0.7725 Minor 0.7625 100 WMA
0.7706 Session high/(23.6% of 0.7916/0.7642) 0.7590 Rising trend support
0.7690 Minor 0.7550 Minor

Economic data highlights will include:

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

NZDUSD: 0.7258
 The Kiwi  traded down to 0.7196 on Tuesday before risk sentiment improved in early Asia and then gained momentum as US stock futures rebounded, driving the pair up to 0.7270 before closing the day at 0.7255. AudNzd selling also underpinned the Kiwi today.
1 hour/4 hour indicators: Turning higher? Daily Indicators:  Neutral Weekly Indicators:  Turning Neutral
Preferred Strategy:   The Kiwi looks mildly constructive in the short term but the longer term charts are fairly neutral and a cautious approach is required.

Overall, I still prefer the downside in the medium term although the dailies are neutral so I am not expecting too much. The short term momentum indicators do look mildly positive though and  on the topside, minor resistance will be seen at 0.7270 above which there is not a lot to stop a return to 0.7300/05, which should be strong, and then to 0.7335, albeit probably not today

Minor support lies at 0.7225  ahead of stronger bids likely to arrive at 0.7195/0.7200, below which would allow a run to 0.7185 and then to 0.7150/55, below which, 0.7140 and 0.7110 would attract. A move below 0.7200 seems unlikely right now.

Resistance Support
0.7335 Minor 0.7194 Session low
0.7320 Minor 0.7185/87 200 DMA /28 Mar low/Rising trend support
0.7303/05 28 Mar high /(76.4% of 0.7354/0.7153) 0.7153 21 Mar low
0.7280 Minor 0.7140 100 DMA
0.7270 Session high 0.7110 (50% pivot of 0.6780/0.7336)

Economic data highlights will include:

ANZ Commodity Price Index