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

By | December 6, 2017


EURUSD: 1.1825
€/Usd is a bit lower today, with the dollar buoyed by enthusiasm for the US tax bill being passed. The pair is currently sitting just above the 100 DMA which may provide support today although the short term momentum indicators hint at lower levels ahead.
1 hour/4 hour indicators: Turning lower Daily Indicators: Possible topping formation Weekly Indicators:  Neutral
Preferred Strategy:  The short term momentum indicators look a little heavy so selling rallies may be a plan today although not really looking for too much ahead of Friday’s NFP figure.  I remain neutral on the Euro, although the daily charts, which had been leaning higher appear to be running out of steam and may be hinting of further dollar strength ahead. Look to trade 1.1770/1.1850 today.
Resistance Support
1.1939 1 Dec high 1.1805/00 100 DMA/(38.2% of 1.1553/1.1943)/Session low
1.1900 Pivot 1.1775 55 DMA
1.1890 Chart Gap 1.1755 (50% of 1.1553/1.1943)
1.1877 4 Dec high 1.1707 (61.8% of 1.1553/1.1943)
1.1840 Minor 1.1685 Rising trend support

Economic data highlights will include:                                                                                

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

USDJPY: 112.56
US$Jpy has remained relatively underpinned on Tuesday as risk appetite improves, although it was capped at 112.85, unable to approach the cloud top at 113.08. A minor selloff has emerged late in the day to see the pair pretty much unchanged over the session.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher Weekly Indicators:  Neutral
Preferred Strategy:  As before, a nimble stance is required, with the short term momentum indicators looking a little heavy, while the dailies are leaning slightly higher now and buying dips is preferred for the medium term. Look for a range of 112.25/113.10 to cover it today, with further consolidation likely ahead of the US Jobs report, Friday.
Resistance Support
113.80 (76.4% of 114.73/110.83) 112.50 Minor
113.50 Minor 112.37 Session low
113.20 (61.8% of 114.73/110.83) 112.00 Minor
113.08 4 Dec high 111.60/65 100 DMA/200 DMA
112.85 Session high 111.35/39 29 Nov low /1 Dec low

GBPUSD: 1.3445
Cable reversed off its Brexit-related European low of 1.3370 to reach 1.3460 as confidence returned to the market in PM May’s ability to successfully negotiate with the EU..
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher Weekly Indicators:  Turning higher?
Preferred Strategy:  It looks set to remain choppy for Sterling, with Brexit headlines likely to guide the direction. I still like it higher though for the medium term trade and prefer to buy dips, looking for a run to 1.3650. Ahead of that 1.3550 will see good sellers if we get there.

Buy GbpUsd @ 1.3385. SL @ 1.3335, TP @ 1.3550

Resistance Support
1.3549 1 Dec high 1.3400 200 HMA
1.3538 4 Dec high 1.3370 Session low
1.3500 Minor 1.3352 (38.2% of 1.3038/1.3549)
1.3480 Session high 1.3325 Minor
1.3460 Minor 1.3295 (50% of 1.3038/1.3549)

USDCHF: 0.9873
US$Chf has retained a relatively bid tone on Tuesday as risk appetite improves, although the range has been a tight 0.9836/87.
1 hour/4 hour indicators: Turning higher Daily Indicators: Neutral Weekly Indicators:  Neutral
Preferred Strategy:  With both the short term and daily momentum indicators now looking more constructive we could see a run back to 0.9900+. I prefer to trade from the long side, looking to buy dips, hoping for an eventual return to 0.9900/50 and possibly to 1.0000.

Buy US$Chf @ 0.9850. SL @ 0.9800, TP @ 0.9945.

Resistance Support
1.0000 Psychological 0.9835 100 WMA /Session low
0.9946 21 Nov high 0.9805 200 DMA
0.9920 Minor 0.9783 Chart Gap
0.9895  (76.4% of 0.9946/0.9776) 0.9735 1 Dec low /100 DMA
0.9887 Session high 0.9727 (50% of 0.9420/1.0037)

AUDUSD: 0.7608
AudUsd saw a run up to 0.7653, which has since been rejected, with the Aud closing the session at just above 0.7600. Lower iron ore prices and a big selloff in copper did nothing to help the Aud and may continue to weigh on it today.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  The Q3 GDP will decide the direction today but overall I still prefer be short Aud$ as we approach the FOMC next week, when the Fed are expected to hike rates. I therefore suspect that further upside for the Aud will be limited and selling into rallies is still preferred.

Sell AudUsd @ 0.7630. SL @ 0.7660, TP @ 0.7550

Resistance Support
0.7690 Minor 0.7594 Session low
0.7665 13 Nov high /(23.6% of 0.8102/0.7531) 0.7578 4 Dec low
0.7653 Session high 0.7550 1 Dec low  /100 WMA / (61.8% of 0.7159/0.8124)
0.7640 Minor 0.7531 21 Nov low
0.7625 Minor 0.7515 (76.4% of 0.7328/0.8124)

Economic data highlights will include:


NZDUSD: 0.6877
The Kiwi has had a relatively quiet overnight session, pretty much unmoved by the Milk Auction, which showed  the Global Dairy Trade Index at  +0.4% and  the WMP +1.7%.  After the earlier run up to 0.6907, the latter half of the day has been spent consolidating neat 0.6880.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  The short term momentum indicators are neutral and a cautious stance is required today. The dailies are mildly positive but with the weeklies looking heavy, I still prefer to look for levels to sell into, for an eventual return to the downside, where 0.6780/6800 would provide decent support. For today, a range of 0.6850/0.6910 might cover it.
Resistance Support
0.6945 28 Nov high 0.6850 Session low
0.6933 (23.6% of 0.7434/0.6783) 0.6840 4 Dec low
0.6928 29 Nov high 0.6816 1 Dec low
0.6907/11 Session high/1 Dec high 0.6779 17 Nov low
0.6885 Minor 0.6750 Minor