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

By | December 4, 2017

 

EURUSD: 1.1898
€/Usd had a choppy session on Friday with most of the volatility seen after the Flynn/White House story. US Politics and the EU Sentix Investor Confidence Survey/US Factory Orders will provide the direction today. The passing of the US tax bill on Saturday may provide some early support for the dollar.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning higher Weekly Indicators:  Neutral
Preferred Strategy:  The short term momentum indicators look pretty neutral and similar range to Friday’s would not surprise although a positive EU Sentix would possibly see a test of the topside. This is backed up by the constructive look of the dailies so buying dips may be the plan. As above though, watch for the reaction to the passing of the US Tax Bill.
Resistance Support
1.2004 22 Sept high 1.1885 Minor
1.1985 Minor 1.1850 Friday low/   Rising trend support
1.1960/64 27 Nov high / (76.4% of 1.2091/1.1553) 1.1830 Minor
1.1939 Friday high 1.1805 (38.2% of 1.1553/1.1943)/30 Nov low
1.1900 Pivot 1.1775 100 DMA/55 DMA

Economic data highlights will include:

M:  EU Sentix Investor Confidence Survey, EU PPI, ISM NY Business Conditions, US Factory Orders

T:   EU/US Services/Composite PMIs, EU Retail Sales, US Trade Balance, ISM Non-Mfg PMI

W: German Factory Orders, ECB Non-MP Meeting, US ADP Jobs data, EIA weekly crude oil stock change

T: EU GDP, US Jobless Claims, Consumer Credit Change

F: German Trade Balance, US Jobs/NFP/Average Hourly Earnings



USDJPY: 112.17
US$Jpy collapsed from 112.87 to a spike low of 111.39, in following a similar move in US bond yields after the Flynn/Trump story broke on Friday, before closing mid-range, at a more respectable 112.20.
1 hour/4 hour indicators: Neutral -Turning lower? Daily Indicators: Neutral Weekly Indicators:  Neutral
Preferred Strategy:  A nimble stance is required this week and it would not surprise to see plenty of volatility but little directional progress ahead of Friday’s US Job data. For today look for a range of 111.50/112.50 to cover it but watch for any possible directional move from the passing of the US tax bill on Saturday.
Resistance Support
113.80 (76.4% of 114.73/110.83) 112.00 Minor
113.20 (61.8% of 114.73/110.83) 111.73/70 100 DMA/200 DMA
113.00 Minor 111.35/39 29 Nov low /Friday low
112.87 Friday high 111.02 (50% pivot of 107.31/114.73)
112.50 Minor 110.83 27 Nov low

Economic data highlights will include:

M:

T:

W:

T: Leading Economic Index, Coincident Index, Foreign Bond/Stocks Investment

F: GDP, Trade Balance, Current Account, Eco Watchers Survey



GBPUSD: 1.3475
Cable turned a little lower on Friday after topping out at 1.3549, falling to a low of 1.3445, before closing at 1.3475.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher Weekly Indicators:  Turning higher?
Preferred Strategy:  The coming session looks a little heavy for Cable, and a run back to 1.3445/50 would not surprise, below which could see 1.3430 and even 1.3375/80. Further out, with the daily/weekly momentum indicators looking mildly positive, buying dips is preferred from the strategic point of view

Sell GbpUsd @ 1.3510. SL @ 1.3560, TP @ 1.3430

Resistance Support
1.3656 20 Sept high 1.3444 Friday low
1.3595 22 Sept high 1.3430 (23.6% of 1.3038/1.3549)
1.3549 Friday high 1.3406 30 Nov low
1.3520 Minor 1.3375 Rising trend support
1.3500 Minor 1.3352 (23.6% of 1.3038/1.3549)

Economic data highlights will include:

M:

T:

W:

T:

F: Manufacturing/Industrial Production, Trade Balance, NIESR GDP Estimate



USDCHF: 0.9758
US$Chf got trashed on Friday  amid demand for safe-haven assets, taking out stops on long positions in reaching a low of 0.9735, where the 100 DMA prevented further losses, before closing at 0.9755.
1 hour/4 hour indicators: Down Daily Indicators: Turning lower Weekly Indicators:  Neutral
Preferred Strategy:  With both the short term and daily momentum indicators now pointing lower it would seem that the dollar will stay under pressure in the near term. Further out, possibly into the New Year I expect it to remain choppy but without too much direction. For today, selling near 0.9800, but looking for a run towards 0.9700 would seem favoured.

Sell US$Chf @ 0.9800. SL @ 0.9840, TP @ 0.9725

Resistance Support
0.9865  (61.8% of 0.9946/0.9776) 0.9735 Friday low /100 DMA
0.9835 100 WMA 0.9727 (50% of 0.9420/1.0037)
0.9815 (38.2% of 0.9946/0.9734) 0.9705 13 Oct low
0.9805 200 DMA 0.9685 Minor
0.9785 (23.6% of 0.9946/0.9734) 0.9669 29 Sept low


AUDUSD: 0.7611
AudUsd broke to the upside, reaching a high of 0.7638 on Friday due to the sharp decline of the US dollar, before closing the week just above 0.7610.

Buy AudUsd @ 0.7575. SL @ 0.7545, TP @ 0.7640

1 hour/4 hour indicators: Up Daily Indicators: Neutral – Turning higher? Weekly Indicators:  Turning lower
Preferred Strategy:  The near term momentum indicators do look slightly positive on Monday, and with the US$ seemingly set to begin the week under pressure, a move towards 0.7650/70 would not really surprise although the passing of the US tax bill may limit any upside today. As we approach the FOMC next week, when the Fed are expected to hike rates, I think further upside will be limited and selling into rallies is still preferred.
Resistance Support
0.7690 Minor 0.7595 Minor
0.7665 13 Nov high /(23.6% of 0.8102/0.7531) 0.7575 Minor
0.7644 27 Nov high 0.7550 Friday low  /100 WMA / (61.8% of 0.7159/0.8124)
0.7638 Friday high 0.7531 21 Nov low
0.7620 Minor 0.7515 (76.4% of 0.7328/0.8124)

Economic data highlights will include:

M:  TD Inflation, ANZ Job Ads, Company Gross Operating Profits (Q3)

T:    AIG Services PMI, Current Account, Retail Sales, RBA Interest Rate Decision, Caixin China services PMI

W: Q3 GDP

T: AIG Services PMI, Trade Balance, China Foreign Exchange Reserves

F: Home Loans, Investment Lending for Homes, China Trade Balance



NZDUSD: 0.6890
The Kiwi broke higher on the back of the US political turmoil, reaching 0.6911 on Friday, before closing at 0.6890.
1 hour/4 hour indicators: Up Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  As with the Aud$, the short term momentum indicators are pointing higher and a test of 0.6930/50 would not surprise, but with the weeklies looking heavy, I prefer to look for levels to sell into, for an eventual return to the downside. For today, a range of 0.6850/0.6950 might cover it.
Resistance Support
0.6979 9 Nov high 0.6875 200 HMA
0.6945 28 Nov high 0.6850 Minor
0.6933 (23.6% of 0.7434/0.6783) 0.6816 Friday low
0.6928 29 Nov high 0.6800 Minor
0.6911 Friday high 0.6779 17 Nov low

Economic data highlights will include:

M:

T:    Global Dairy Trade Index

W:

T:

F: Q3 Manufacturing Sales



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