7 Aug: Forecast: FX: US$/Majors

By | August 7, 2017

 

EURUSD: 1.1772
24 Hour: Bearish – Sell short term strength Medium Term: Bearish
The Euro headed sharply lower following Friday’s US jobs data, reaching a low of 1.1727 before closing at 1.1770.

Technically, it looks as though the dollar’s weakness may have ended for the time being, and the charts generally hint that further downside pressure may be placed on the Euro. If so, below Friday’s low and the 31 July low of 1.1722 would allow a run back towards the 28 July low of 1.1670. Under there would see a test of the rising trend support, currently at 1.1620 and possibly on towards 1.1600 although not yet.

The topside looks a little limited  right now although the hourlies do need to correct their current oversold condition and we could see a rally towards 1.1800, and anything above there would seem to be a decent sell opportunity. If wrong on all this, and the Euro regains its strength we could see it head back towards 1.1900; and back above 1.0910 and there is very little resistance to stand in the way of a move towards 1.2000, with the next Fibo level is not actually seen until 1.2165 (50% of 1.3993/1.0340).

Preferred Strategy: Bearish. Selling short term strength, but looking for a run towards 1.1650/1.1700 seems to be the plan

Resistance Support
1.1909 1 Aug high 1.1727/22 Friday low /31 July low/(23.6% of 1.1140/1.1909)
1.1882 Friday high 1.1685 Minor
1.1850 Minor 1.1650 Minor
1.1815 Minor 1.1620 Rising trend support
1.1785 200 WMA 1.1605 (38.2% of 1.1140/1.1909)

Economic data highlights will include:

M:  German Industrial Production, EU Sentix Investor Confidence Survey (Aug), US Labor Market Conditions, Consumer Credit

T: German Trade Balance, Current Account (Jun), US NFIB Business Optimism Index, API Weekly Crude Oil Stock Inventory

W: US Wholesale Inventories, EIA Crude Oil Stocks Weekly Change

T:  US PPI, Jobless Claims, Monthly Budget Statement

F: German CPI/HICP, US CPI, Baker Hughes Oil Rig Count



USDJPY: 110.67
24 Hour: Prefer to buy dips Medium Term: Neutral
US$Jpy made a bullish key-day reversal on Friday – just – (110.83/111.05) and looks as though it may have the legs to carry on higher in the sessions ahead.

The indicators are looking rather more bullish at the start of the week although we really need a daily close above 111.05 in order to gain enthusiasm for further upside progress. Beyond there would run into resistance at the 200 WMA at 111.25 and then at 111.40 (100 DMA). These should combine to slow further gains today, but if wrong, look for a move towards 111.65 and eventually to 111.90 (100 WMA) which should be strong resistance, if/when we get there.

On the downside, the dollar will find bids at minor levels down towards 110.00, below which could revisit 109.85 although not today, I think. If wrong, below 109.95 could test 109.65 and further out, below there could eventually see a run towards 109.25 and even to 108.80 (Weekly Cloud Base).

Preferred Strategy: Buy dips or a break of 111.05.

Resistance Support
111.70 27 July high 110.50 Minor
111.60 (38.2% of 114.50/110.83) 110.20 Minor
111.25 200 WMA 110.00 Minor
111.05 Friday high/Daily Tenkan 109.85/83 3 Aug low /Friday low
110.80 200 HMA 109.65 (76.4% of 108.12/114.50)

Economic data highlights will include:

M:  Leading Economic Index, Coincident Index

T: Trade Balance, Current Account, Eco Watchers Survey

W: Machine Tool Orders

T:  Foreign Bond/Stocks Investment, Tertiary Industry Index

F:



GBPUSD: 1.3035
24 Hour: Mildly Bearish –Prefer to sell rallies Medium Term: Prefer to sell rallies
Cable continued its sharp downside reversal on Friday, finishing just above session lows of 1.3023 and looking as though a test of sub-1.3000 is imminent.

The momentum indicators are all pointing lower, and below 1.3000 would only find minor levels of support until 1.2925, below which could easily head towards 1.2850, albeit probably not yet.

On the topside, resistance will be seen at various minor levels towards 1.3100 and above. If we do get back towards 1.3100, which is possibly given the oversold nature of the hourlies, it would present a good sell opportunity, with a SL placed above 1.3150

Preferred Strategy: Bearish- Prefer to sell rallies

Resistance Support
1.3163 Friday high 1.3023 Friday low
1.3135 200 HMA 1.3005 (38.2% of 1.2588/1.3267)
1.3110 Minor 1.2955 Minor
1.3095 Minor 1.2927 (50% of 1.2588/1.3267)
1.3055 Minor 1.2900 Minor

Economic data highlights will include:

M:

T:  NIESR GDP Estimate (3mth- July)

W: Inflation Report Hearing

T: Manufacturing/Industrial Production, Trade Balance

F:



USDCHF: 0.9728
24 Hour: Prefer to buy dips Medium Term: Mildly Bullish
 

US$Chf spiked up to 0.9763 on Friday before chopping around 0.9730 into the weekend, but looking as though the dollar has further gains ahead in the sessions ahead.

0.9765 will continue to provide decent resistance ahead of 0.9790 and then 0.9805/10. Above there would open up the next Fibo level at 0.9848, above which could then head to the 100 WMA at 0.9870.

On the downside, minor support lies at 0.9700 and 0.9685 ahead of Friday’s low at 0.9670. Further out, last week’s lows at 0.9630 comes into view ahead of the 100 MMA (0.9600), which should be decent support if we see it.

Preferred Strategy:  Mildly Bullish. Look to buy dips at 0.9700, looking for a topside break of 0.9765. SL sub 0.9670

Resistance Support
0.9848 (61.8% pivot of 1.0100/0.9437) 0.9700 Minor
0.9807 30 May high/100 DMA 0.9685 (23.6% of 0.9437/0.9763)
0.9790 100 DMA 0.9670 Friday low
0.9763/65 Friday high/(50% pivot of 1.0100/0.9437) 0.9640 (38.2% of 0.9437/0.9763)
0.9740 Minor 0.9630 1 Aug low


AUDUSD: 0.7928
24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish.
Having squeezed up to 0.7980 prior to the NFP, the Aud then fell to a low of 0.7890 after the release of the data, but managed to finish the session back above 0.7900 although it is looking a little precarious at the start of the week.

While the short term indicators are reasonably neutral, the dailies are warning the longs, and if we get below 0.7890/00 we could then see a move to 0.7875, which should be strong support if/when we get there, but below which opens 0.7850, 0.7835 and 0.7820..

On the topside, 0.7950 will see sellers ahead of Friday’s high of 0.7980, and 0.8000. I don’t think we go close to this today, but if wrong, above 0.8000 could then see a return to last Tuesday’s high of 0.8041 and then to the trend high of 0.8065. Above 0.8065, there is little to stop the Aud from heading to 0.8160, albeit probably not today.

Preferred Strategy: The dailies are looking increasingly toppish, so once again, trading from the short side, selling rallies with a SL above 0.0.7985 could be a plan. ANZ Job Ads and the Construction PMI to dive it today.

Resistance Support
0.8000 200 WMA 0.7915 Minor
0.7985 200 MMA 0.7890 Friday low/(23.6% of 0.7328/0.8065)
0.7979 Friday high 0.7874 21 July low /26 July low
0.7965 200 HMA 0.7850 Minor
0.7950 Minor 0.7835 Minor

Economic data highlights will include:

M:  AIG Construction Index (July), ANZ Job Ads, China Foreign Exchange Reserves

T:  NAB Business Conditions/Confidence, China Trade Balance

W: WBC Consumer Confidence, Home Loans, Investment Lending for Homes, China CPI, PPI

T: Consumer Inflation Expectation

F: China Foreign Direct Investment



NZDUSD: 0.7413
24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
The Kiwi survived relatively unscathed on Friday, dipping to a low of 0.7390 after the NFP, but closing back at 0.7415.

The short term momentum indicators are flat, although the daily charts do point increasingly lower now and suggest that further losses lie ahead. Having said that, the weekly/monthly charts still look positive and still suggest that further medium term gains may lie ahead.

The recent pivot at 0.7425 (200 WMA) may continue to attract, but on the downside we could see a return to 0.7390 and a test of the Fibo support at 0.7383. Under there could nudge the rising trend support, currently at 0.7360, a break of which would allow deeper losses towards 0.7335 and eventually to 0.7270, albeit probably not today.

Back above Friday’s high of 0.7455would open a move to 0.7475, above which may lead the Kiwi back to 0.7500. Beyond there, unlikely, could then return to the 1 Aug high of 0.7525 and then to 0.7545 (strong: 100 MMA/55 MMA) and the 27 July high (0.7557). Further out, there is little resistance to stop the Kiwi from heading on towards 0.7575 and above that there is nothing to stop it heading to 0.7740/45 (April 2015 high).

Preferred Strategy: Look to sell rallies, with a SL placed above 0.7475.

RBNZ coming up on Thursday. No change expected but the RBNZ are likely to talk the Kiwi down.

Resistance Support
0.7500 Pivot 0.7391/90 Friday low/3 Aug low
0.7475 2 Aug high 0.7383 (23.6% of 0.6817/0.7557)
0.7465 200 HMA 0.7360 Rising trend support
0.7455 Friday high 0.7335 Minor
0.7425 200 WMA 0.7300 Minor

Economic data highlights will include:

M:

T:

W:

T: RBNZ Meeting, Monetary Policy Statement, Press Conference, Electronic Card Retail Sales

F: NZ Business PMI, Food Price Index