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

By | January 4, 2018


EURUSD: 1.2011
€/Usd has traded lower on Wednesday albeit it within a tight 1.0265/1.2000 range. While the short term momentum indicators now look heavy, the daily charts still look constructive and seem to suggest an eventual move for a retest of yesterday’s 1.2080 high and beyond, towards the 8 Sept high of 1.2098, a break of which, would then open up the chance of a move towards 1.24 (200 MMA). In the meantime the short term momentum indicators hint at a possible test of 1.1950/60. The  EU/US Services/Composite PMIs and the US ADP Jobs data & Jobless Claims will be the focus today ahead of tomorrow’s US employment data.
1 hour/4 hour indicators: Turning lower. Daily Indicators: Turning higher Weekly Indicators:  Neutral
Preferred Strategy:  The medium term charts hint at further gains, so for Thursday buying dips again seems to be the plan. German Unemployment, ISM and FOMC Minutes coming up today.

Buy EurUsd @ 1.1960. SL @ 1.1895, TP @ 1.2080

Resistance Support
1.2160 (50% pivot of 1.3993/1.0340) 1.2000 Session low
1.2120 Minor 1.1980 Minor
1.2091 8 Sept high 1.1955 (23.6% of 1.553/1.2025)
1.2080 2 Jan high 1.1920 Minor
1.2065 Session high 1.1900 Minor

Economic data highlights will include:                                      

EU Services/Composite PMIs, US ADP Jobs data, Jobless Claims, Markit Manufacturing/Services/Composite PMIs Services/Composite PMIs, EIA Crude Oil Stocks Weekly Change, Fed’s Bullard Speech

USDJPY: 112.48
US$Jpy jumped to a session high after the release of the FOMC Minutes (112.60) but has since fallen back to sit at levels similar to yesterdays, leaving the range-trade outlook unchanged.
1 hour/4 hour indicators: Turning higher. Daily Indicators: Neutral Weekly Indicators:  Neutral
Preferred Strategy:   The dailies seem to suggest that we are likely to see further decent support at 111.95/05, which I think will hold today, but below which would open the way to the 200 DMA at 111.65.

On the other hand the short term momentum indicators are more positive and if 112.60 can be overcome we could then see a return to 112.80 and possibly on to 113.00 and above, where 113.30/35 should see sellers ahead of the December high of 113.75.

Most likely a range of 112.00/113.00 would not surprise for the coming session.

Range trade@ 112.00/113.00.  SL 30 points either side.

Resistance Support
113.75 12 Dec high 112.16 Session low
113.57 14 Dec high 112.05 2 Jan low
112.99 28 Dec low 112.02 15 Dec low
112.75 Minor 111.95 (61.8% of 110.83/113.75)/6 Dec low/100 DMA
112.60 Session high 111.65 200 DMA

GBPUSD: 1.3511
Sterling initially headed higher again in European trade on Wednesday, reaching 1.3614 before reversing sharply, to a low of 1.3494, not helped by the Construction PMI which missed expectations.
1 hour/4 hour indicators: Turning lower. Daily Indicators: Turning higher?


Weekly Indicators:  Turning higher?
Preferred Strategy:   The momentum indicators are now mixed and a neutral stance is probably wise, but the dailies still look constructive so, as with the Euro, buying dips currently seems to be the plan while keeping a tight stop in place.

Buy GbpUsd @ 1.3475. SL @ 1.3440, TP @ 1.3600

Resistance Support
1.3656 20 Sept high 1.3494 Session low
1.3612 Session high 1.3480 Minor
1.3580 Minor 1.3465 (23.6% of 1.3038/1.3599)
13565 Minor 1.3440 200 HMA
1.3545 Minor 1.3394 (38.2% of 1.3038/1.3599)

Economic data highlights will include:                                                           

UK Mortgage Approvals, Net Lending to Individuals, Consumer Credit (Nov

USDCHF: 0.9771
US$Chf has rallied strongly off the 0.9700 lows, reaching 0.9797 and currently sits just below there, near the 31d/200 DMA. With the daily charts pointing lower, further upside momentum may prove tricky today although the short term momentum indicators do currently look positive, and selling rallies appears to be the plan. Another test of 0.9700 and potentially 0.9650 may be on the cards in the days ahead.
1 hour/4 hour indicators: Turning higher Daily Indicators: Neutral – Turning lower? Weekly Indicators:  Neutral
Preferred Strategy:  The dailies are heavy and so in the short term, selling rallies at the support-turned-resistance, at 0.9780 would seem to be the plan today.

Sell US$Chf @ 0.9790. SL @ 0.9815, TP @ 0.9685

Resistance Support
0.9870 (61.8% of 0.9977/0.9699) 0.9750 Minor
0.9835 (50% of 0.9977/0.9699) 0.9730 Minor
0.9805 (38.2% of 0.9977/0.9699) 0.9699 2 Jan low
0.9797 Session high 0.9685 Minor
0.9780 100 DMA/200 DMA 0.9655 (61.8% of 0.9420/01.0037)

AUDUSD: 0.7836
 AudUsd traded up to 0.7844 again on Wednesday, holding its ground and closing on its highs in what has been a fairly tight session. While the short term momentum indicators still look a little toppish, the dailies remain constructive and as elsewhere, the US$ looks set to remain under pressure although with the Aud now having lost its risk premium over the US$ I am wary of buying it at these levels.
1 hour/4 hour indicators: Mixed. — Possible topping formation. Daily Indicators: Turning higher Weekly Indicators:  Neutral –Turning higher?
Preferred Strategy:   The 4 hour indicators still look a little toppish so another move back towards 0.7800/0.7810 would not surprise but buying dips seems to be the plan. Stand aside. Further out, if the US dollar remains weak, a medium term move towards 0.8000 should not be ruled out.  The AIG Services Index PMI and the Caixin China Services PMI will provide the initial direction today and a solid reading would allow for a run to take out stops above 0.7850.
Resistance Support
0.7910 Monthly cloud base 0.7815 Minor
0.7900 Minor 0.7790 2 Jan low
0.7883 19 Dec 0.7780 100 DMA
0.7865 Minor 0.7765 (23.6% of 0.7500/0.7825)
0.7845 2 Jan high/Session high 0.7740 200 HMA

Economic data highlights will include:

AIG Services Index PMI, Caixin China Services PMI

NZDUSD: 0.7094
The Kiwi traded a choppy but directionless range today (0.7073/0.7110) and has once again finished the US session near 0.7100, where the 200 DMA/55WMA is acting as a magnate.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning higher Weekly Indicators:  Turning higher
Preferred Strategy:  The outlook is pretty much the same as that for the Aud and a neutral stance is currently wise. The short term momentum indicators are showing some bearish divergence and a drift back towards strong support at 0.7070 would not surprise but buying dips seems to be the longer term plan.
Resistance Support
0.7165 Minor 0.7080 Minor
0.7150 Minor 0.7065/70 100 WMA/100 DMA
0.7130 29 Dec high 0.7045 (23.6% of 0.6787/0.7130)
0.7110 Session high 0.7020 Minor
0.7100/05 55 WMA  /200 DMA 0.7000 (38.2% of 0.6787/0.7130)