7 Mar: Forecast: FX: US$/Majors + trade ideas

By | March 7, 2018

 

 

EURUSD: 1.2402
EurUsd headed sharply higher in European trade on the N Korea news, reaching 1.2420 before settling back at 1.2400. We now wait today’s EU Q4 GDP (exp0.6%qq, 2.7%yy) beyond which, traders will look towards Thursday’s ECB Meeting.  The ADP Jobs data may cause some ripples later in the day (exp 195k).
1 hour/4 hour indicators: Turning higher Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  The spike higher and subsequent consolidation looks like a bull flag for the Euro, which suggests a target of around 1.2500/20 although, with the ECB due on Thursday, there may be diminished interest to buy it up too aggressively today. The downside currently looks relatively underpinned at 1.2385, but below which will allow a move back towards 1.2350/60 and then again at the session low at around 1.2330.
Resistance Support
1.2500 Minor 1.2385 Minor
1.2480 Minor 1.2360 Minor
1.2460 (76.4% of 1.2555/1.2155) 1.2327 Session low
1.2435 Minor 1.2300 Minor
1.2420 19 Feb high/Session high 1.2285 200 HMA

Economic data highlights will include:

EU Q4 GDP, US ADP Jobs data, Trade Balance – Jan, Consumer Credit Change, EIA Crude Oil Stocks Weekly Change



USDJPY: 106.21
US$Jpy was choppy again on Tuesday but ended up pretty much where it started after a range of 105.85/106.45. The Yen was under pressure following the Korean headlines, but ending up sitting close to 106.00 at the end of the session. Risk sentiment will again be the main driver for most of this week although 2 Mar will be the main focus, when we have the BOJ Meeting and the US jobs data/ NFP.
1 hour/4 hour indicators: Turning higher. Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  While a cautious approach is required, the 4 hour momentum indicators are pointing sharply higher and I would not be surprised to see a retest of the session high and possibly the decent resistance in the 106.50/75 band, above which would allow a revisit of 107.00. A failure on the topside could see a run back below 106.00 to 105.70/85 and possibly down to the trend lows at 105.35/25. Below that there really is not a lot to hold the dollar up ahead of major Fibo support at around 103.50. In the meantime the 200 MMA, at 105.70, may prove to be decent support and while risk sentiment remains positive, I prefer to look to buy dips..

Note the bullish key-day reversal in EurJpy seen on Monday has seen a run up on Tuesday to 132.00 and the cross now seems to have further gains ahead of it, targeting 132.50 and possibly 133.40. Buying dips is preferred.

Buy US$Jpy @ 105.80. SL @ 105.20, TP @ 106.90

Buy EurJpy @ 131.00. SL @ 130.40, TP @ 132.80

Resistance Support
107.00 Minor 105.85 Session low
106.75 (61.8% of 107.67/105.24) 105.70 200 MMA
106.57 Daily Tenkan 105.50 Minor
106.45 (50% of 107.67/105.24)/Session high 105.24/35 2 Mar low /5 Mar low
106.25 Minor 105.00 Minor

Economic data highlights will include:

W:  Leading Economic Index, Coincident Index



GBPUSD: 1.3886
Cable headed sharply higher, from 1.3816 to 1.3930, after the risk rally following the Korean headline,  but finished the day below 1.3900 due to some Brexit headlines weighing on sentiment.
1 hour/4 hour indicators: Turning higher? Daily Indicators:  Turning Neutral. Weekly Indicators:  Possible topping formation.
Preferred Strategy:     As before, Cable remains very choppy, and I suspect is still best left alone, with too many factors, not least the ongoing Brexit headlines, influencing sharp market moves. The 4 hour indicators do still look mildly positive so a retest of 1.3930 may be on the cards, above which could run towards 1.3985, which should be strong if we get there. On the downside, minor support will be seen at 1.3864/40 at ahead of the session low of 1.3816. Sidelined.
Resistance Support
1.3985 (76.4% of 1.4070/1.3711)/ Descending trend resistance 1.3870 200 HMA
1.3970 Minor 1.3840 Minor
1.3950 Minor 1.3816 Session low
1.3929/32 (61.8% of 1.4070/1.3711) 1.3780 Minor
1.3915 Minor 1.3766 5 Mar low


USDCHF: 0.9406
US$Chf has traded either side of 0.9400 and is finishing unchanged on the day. The momentum indicators are neutral and a cautious stance is required.
1 hour/4 hour indicators: Neutral. Daily Indicators: Turning higher Weekly Indicators:   Turning lower
Preferred Strategy:  As before, the dailies look constructive, so I prefer to look to buy dips but with the short term momentum indicators looking neutral it may be best to look for levels nearer the session low of 0.9360 to do so, with a SL placed below 0.9340. On the topside, minor resistance will be seen at 0.9420/25, above which could see a return to the Thursday high at 0.9490 although unlikely today.
Resistance Support
0.9515 Minor 0.9359 Session low
0.9490 1 Mar high 0.9345 5 Mar low
0.9450 Minor 0.9338 (50% of 0.9187/0.9490)/2 Mar low
0.9423 2 Mar high 0.9320 Minor
0.9418 Session high 0.9302 (61.8% of 0.9187/0.9490)


AUDUSD: 0.7817
The Aud spiked higher on the Korean news, reaching 0.7842 before closing out at 0.7820. Today will look to the Construction Index and the Q4 GDP for guidance (exp 0.6%qq, 2.5%yy).
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning higher Weekly Indicators:  Turning lower?
Preferred Strategy:

The hourlies look rather toppish after the spike higher but the 4 hour/daily momentum indicators look increasingly positive and a run back towards the session high and on to 0.7875 and then to 0.7890 would not surprise. Support will now arrive at 0.7785 and again at 0.7770 and for the time being, buying dips is preferred, with a SL placed below 0.7750.

Resistance Support
0.7893 26 Feb high 0.7800 Minor
0.7875 (38.2% of 0.8135/0.7711) 0.7785 200 DMA
0.7860 Minor 0.7770 100 DMA
0.7842 Session high 0.7755 Session low
0.7825 Minor 0.7725 5 Mar low

Economic data highlights will include:

W:  AIG Performance of Construction Index, GDP (Q4



NZDUSD: 0.7293

 

 

 

 

 

 

 

 

 

 

 

 

AUDUSD:                                                                              

The Aud spiked higher on the Korean news, reaching 0.7842 before closing out at 0.7820. Today will look to the Construction Index and the Q4 GDP for guidance (exp 0.6%qq, 2.5%yy).
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning higher Weekly Indicators:  Turning lower?
Preferred Strategy:

The hourlies look rather toppish after the spike higher but the 4 hour/daily momentum indicators look increasingly positive and a run back towards the session high and on to 0.7875 and then to 0.7890 would not surprise. Support will now arrive at 0.7785 and again at 0.7770 and for the time being, buying dips is preferred, with a SL placed below 0.7750.

Resistance Support
0.7893 26 Feb high 0.7800 Minor
0.7875 (38.2% of 0.8135/0.7711) 0.7785 200 DMA
0.7860 Minor 0.7770 100 DMA
0.7842 Session high 0.7755 Session low
0.7825 Minor 0.7725 5 Mar low

Economic data highlights will include:

W:  AIG Performance of Construction Index, GDP (Q4)

T: Trade Balance – Jan, China Trade Balance – Feb

F: China CPI/PPI

 

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NZDUSD:

The Kiwi spiked up to 0.7310 on Tuesday before settling the day at 0.7295.
1 hour/4 hour indicators: Turning higher Daily Indicators:  Neutral Weekly Indicators:  Turning Neutral
Preferred Strategy:   The 4 hour/daily momentum indicators are mixed, so I prefer to stand aside right now although the 4 hour charts do hint at another possible test to the topside. Today will find offers at 0.7310and at 0.7340 ahead of 22 Feb, 0.7365 high, beyond which opens 0.7400+. Bids will arrive at 0.7260 ahead of 0.7220, with the major downside target being the major Fibo level at around 0.7185, (38.2% of 0.6780/0.7438) but we have to wait and see on that. Sidelined.
Resistance Support
0.7400 Minor 0.7260 200 HMA
0.7380 Minor 0.7220 Session low
0.7365 22 Feb high 0.7202 5 Mar low
0.7340 (61.8 % of 0.7436/0.7185) 0.7185 1 Mar low
0.7310 (50% of 0.7436/0.7185)/Session high 0.7176 8 Feb low/200 DMA