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

By | April 6, 2018


EURUSD: 1.2240
EurUsd is lower today, falling from a session high of 1.2280 as bear pressure grew on the back of the equity market rally and the firmer US$. The fall has seen the Euro head to 1.2218 before any bounce, with the pair ending the day at 1.2240 and looking heavy ahead of today’s US jobs data.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower? Weekly Indicators:  Possible topping formation.
Preferred Strategy:  The Euro has fallen, to sit just above the major rising trend support trend support at 1.2220, a break of which could then head towards Fibo support at 1.2170 and the 100 DMA at 1.2150. Below there would target 1.2085 and possibly 1.2025.

On the topside, nearby resistance will be seen at 1.2260 and at the session high of 1.2290 ahead of the 4 Apr high of 1.2315, the 3 April high of 1.2335 and at the 2 Apr high at 1.2345. Further out, a stronger Euro would target 1.2370, 1.2420 and even1.2470, but seems unlikely for a while at least.

Given the speculative long Euro positioning, I still mildly prefer the downside and would look to sell rallies, although ahead of today’s US jobs data it may be that we chop around current levels..

Resistance Support
1.2345 2 Apr high/200 HMA 1.2220/17 Major Rising trend support /Session low
1.2335 3 April high 1.2200 Minor
1.2315 4 Apr high 1.2170 (38.2% of 1.1553/1.2555)
1.2289 Session high 1.2154 1 March low/100 DMA
1.2260 Minor 1.2110 Minor

Economic data highlights will include:

German Industrial Production, US Jobs/NFP/Average Hourly Earnings data, Baker Hughes Oil Rig Count, Fed Chair Powell Speech

USDJPY: 107.39
It took a while today to break above 107.00, but having done so as sour risk sentiment abated, US$Jpy has not looked back and has traded to a high of 107.48, where the daily cloud base is currently providing decent resistance..
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  The momentum indicators generally look constructive again today and if we can take out the NY high of 107.49 then we could see an approach on the mid-February highs at 107.67/90.  108.00/10 would then be a target above which could see a move to 108.45/50.

On the downside, minor support will be seen today at 107.00 and at the day’s low of 106.70. Below there, a bad NFP outcome could see a reverse towards 106.30, 106.00, and possibly towards the 3 April low of 105.68 although this seems unlikely right now.

Further out, if stocks do turn lower again, taking US$Jpy along for the ride, 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 – This currently looks well beyond the horizon and overall I prefer to be trading from the long side.

Resistance Support
108.30 Minor 107.15 Minor
108.10 (38.2% of 113.75/104.60) 107.00 Minor
107.90 21 Feb high 106.70 Session low
107.67 27 Feb high 106.30 100 HMA
107.48 Session high /Daily cloud base 105.98 4 Apr low

Economic data highlights will include:

Japan Leading Economic Index, Coincident Index

GBPUSD: 1.4002
Cable traded lower after the soft UK Services PMI and headed to the Daily cloud top at 1.3965 before a mild bounce to finish at 1.4000.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower? Weekly Indicators:  Turning Neutral
Preferred Strategy:   Cable is beginning to look increasingly heavy and I prefer to be short although all will depend on the NFP later today. Below the session low would allow for a run towards 1.3915, which should be strong support but below which would open 1.3890 and 1.3860.

On the topside, minor resistance will be seen at 1.4050 ahead of 1.4100 although I don’t think we head back here today. Looking to sell rallies is preferred with a tight SL placed above 1.4100.

Resistance Support
1.4130 Minor 1.4000 Pivot
1.4096 Session high 1.3977 (50% of 1.3715/1.4243)
1.4075 Minor 1.3965 Session low /Daily cloud top/Daily Kijun
1.4050 100 HMA 1.3915 (61.8% of 1.3715/1.4243) /Rising trend support
1.4030 Minor 1.3890 16 Mar low

USDCHF: 0.9634
US$Chf traded a little higher today in reaching the good resistance level at 0.9640, just above where it currently sits. The momentum indicators look mildly constructive but resistance remains solid, at the 200 DMA and then at the 200 WMA (0.9680) although I think this will eventually be taken out, for a run towards 0.9700 and eventually higher.
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning higher Weekly Indicators:   Neutral
Preferred Strategy:  The momentum indicators look mildly bullish again today but a cautious stance is required as we approach the 200 DMA ahead. Out of choice I still prefer to look to buy dips.

On the topside, the immediate resistance will be seen at 0.9640/50 and then at.0.9665 beyond which would head towards 0.9680, which will be strong and then0.9700.

On the downside, support will be seen at the session low near 0.9600, and then at 0.9580 ahead of the 4 Apr low of 0.9550. Below there would head back to 0.9525/30 and to 0.9500/05.  Sidelined – possible range trade ahead of the NFP, but prefer to look to buy dips towards 0.9600 with a SL placed under 0.9550.

Resistance Support
0.9735 Minor 0.9597 Session low
0.9680 200 WMA/Weekly cloud base 0.9575 100 HMA
0.9666 18 Jan high 0.9550 200 HMA /4 Apr low
0.9652 200 DMA 0.9532 (23.6% of 0.9187/0.9596)
0.9639 Session high 0.9526 2 Apr low

AUDUSD: 0.7683
The Aud is heavy again today, unable to maintain the gains above 0.7700 and currently sits above the day’s lows of 0.7673.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning higher? Weekly Indicators:  Neutral
Preferred Strategy:   The short term momentum indicators are in neutral today, so a cautious stance is required ahead of the US data, in what looks likely to be a mostly quiet session until the NFP.

If we head higher, then resistance will again be seen today at 0.7700, at 0.7720/25 and at 0.7745/50. Above there could stretch back to the 0.7770/85 band, which should be strong, but above which would open 0.7800/05.

Back below 0.7760/70, the Aud has recently 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.

Sell AudUsd @ 0.7700 SL @ 0.7730, TP @ 0.7625

Resistance Support
0.7785/79 200 MMA/21 Mar high /(50% of 0.7916/0.7642) 0.7673 Session low
0.7770 100 DMA 0.7662 4 Apr low
0.7746 (38.2% of 0.7916/0.7642) 0.7651/47 (76.4% of 0.7501/0.8135)/ 3 April low
0.7725 Session high 0.7645/42 (50% pivot of 0.7160/0.8135)/29 Mar low
0.7700 Pivot 0.7625 100 WMA


NZDUSD: 0.7275
 As with the Aud, the Kiwi tried the upside in reaching 0.7322 but then reversed and currently sits above the day’s low of 0.7261, with direction now to come from offshore influences.
1 hour/4 hour indicators: Turning lower Daily Indicators:  Neutral Weekly Indicators:  Turning Neutral
Preferred Strategy:   The short term momentum indicators have turned lower today but the longer term charts are fairly neutral, so a cautious approach is required.

Overall, I still prefer the downside in the medium term because I think the US$ is about to run higher, although with the dailies being neutral I am not expecting too much.

The short term momentum indicators do look mildly negative though and on the downside the initial support will be seen at 0.7250/60.  Below there would allow 0.7225 ahead of stronger bids likely to arrive at 0.7195/0.7200. Below 0.7195 would allow a run to 0.7185 and then, further out, to 0.7150/55, 0.7140 and 0.7110 would attract.

On the topside, resistance will be seen at 0.7300, above which there is not a lot to stop a return to 0.7330, ahead of the March high of 0.7354 and then to the Fibo level at 0.7370.

Selling rallies is preferred.

Resistance Support
0.7370 (76.4% of 0.7436/0.7153) 0.7261 Session low
0.7354 13 Mar high 0.7253 4 Apr low/200 HMA
0.7328 (61.8% of 0.7436/0.7153) 0.7220 Minor
0.7322 Session high 0.7194 3 April low
0.7300 Pivot 0.7185/87 200 DMA /28 Mar low/Rising trend support