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

By | January 8, 2018

 

EURUSD: 1.2029
€/Usd has traded sideways, in choppy trade on Friday following the NFP reading, confined to a 1.2020/82 range and with more of the same looking likely early in the week.

The dailies still look positive though and if we can take out the 8 Sept high of 1.2098 it would then open up the chance of a move towards 1.2160 and in the bigger picture, towards 1.24 (200 MMA). In the meantime the short term momentum indicators are mixed and could see further choppy trade above 1.2000, below which would possibly allow a run to 1.1950/60. The EU Sentix Investor Confidence Survey will be in focus today along with the Dec EU retail sales and EU consumer confidence.

1 hour/4 hour indicators: Mixed. Daily Indicators: Turning higher Weekly Indicators:  Neutral
Preferred Strategy:  The medium term charts hint at further gains, so for Monday buying dips again seems to be the plan although it could be a similar range to Friday. Use 1.2000/1.2080 as a guide.

Buy EurUsd @ 1.1985. SL @ 1.2055, TP @ 1.2090

Resistance Support
1.2160 (50% pivot of 1.3993/1.0340) 1.2020 Friday low
1.2120 Minor 1.2000 3 Jan low
1.2091 8 Sept high 1.1980 Minor
1.2088/82 4 Jan high/Friday high 1.1955 (23.6% of 1.553/1.2025)
1.2060 Minor 1.1920 Minor

Economic data highlights will include:

M:  German Factory Orders, EU Sentix Investor Confidence Survey, Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, Retail Sales

T:    German Industrial Production, Trade Balance, EU Unemployment, US NFIB Business Optimism Index, API Weekly Crude Oil Stock Inventory

W: EU Non-Monetary Policy Meeting Minutes, EU Economic Outlook, US Import/Export Index, Wholesale Inventories, EIA Crude Oil Stocks Weekly Change

T: EU Industrial Production, ECB Monetary Policy Minutes, US PPI, Jobless Claims

F: US Retail Sales, CPI, Monthly Budget Statement, Baker Hughes Oil Rig Count.



USDJPY: 113.06
US$Jpy headed higher in Asia/Europe on Friday in reaching 113.30, and then consolidated above 113.00 for the balance of the session. While the short term momentum indicators look slightly more constructive on Monday, the longer term charts remain pretty flat so I suspect further choppy sideways trade within the broad 112/114 range is in store, with a mild near-term upside bias.
1 hour/4 hour indicators: Mixed. Daily Indicators: Neutral Weekly Indicators:  Neutral
Preferred Strategy:   I don’t really have too much of a directional view of US$Jpy right now although while the stock market continues to make gains the dollar should remain well underpinned, and I suspect the upside is the direction to concentrate on. In the meantime, 113.30/35 should continue to see decent sellers although a break would allow 113.75/80 and possible 114.00. Above 114.20 would then see a break of the descending trend resistance which could see an acceleration higher. Strong support lies in the 112/112.30 area.
Resistance Support
114.20 Descending trend resistance 113.00 Minor
114.00 Minor 112.80 200 HMA
113.75/80 12 Dec high /(76.4% of 114.73/110.83) 112.50 Minor
113.63 21 Dec high 112.35 200 WMA
113.30 Friday high 112.02 15 Dec low

Economic data highlights will include:

M:  Holiday

T:

W:

T: Leading Economic Index, Coincident Index

F: Foreign Bond/Stocks Investment, Current Account, Trade Balance



GBPUSD: 1.3565
Sterling traded sideways on Friday, ending the week at much the same levels it started, with traders awaiting further developments on Brexit negotiations before forming any definitive view as to the next direction.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning higher?

 

Weekly Indicators:  Turning higher?
Preferred Strategy:   The short term 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 @ 1.3500. SL @ 1.3475, TP @ 1.3600

Resistance Support
1.3700 Minor 1.3550 Minor
1.3656 20 Sept high 1.3522 Friday low
1.3635 Minor 1.3494 3 Jan low
1.3612 3 Jan high 1.3480 200 HMA
1.3582 Friday high 1.3475 (23.6% of 1.3038/1.3612)

Economic data highlights will include:                                      

M:

T:

W: UK Manufacturing/Industrial Production, Trade Balance, Goods Trade Balance

T:

F:



USDCHF: 0.9746
US$Chf traded sideways in choppy fashion on Friday, confined to 0.9738/83 and leaving a neutral stance as the best option on Monday. With the daily charts still pointing lower, further upside momentum above 0.9800 may prove tricky in the near term 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: Neutral Daily Indicators: 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 around 0.9780/90 would seem to be the plan.

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

Resistance Support
0.9870 (61.8% of 0.9977/0.9699) 0.9738 Friday low
0.9835 (50% of 0.9977/0.9699) 0.9720 Minor
0.9805 (38.2% of 0.9977/0.9699) 0.9699 2 Jan low
0.9797 3 Jan high 0.9685 Minor
0.9780/83 100 DMA/200 DMA /Friday high 0.9655 (61.8% of 0.9420/01.0037)

Economic data highlights will include:

M:  CPI

T:    Consumer Confidence

W:

T:

F:



AUDUSD: 0.7862
 AudUsd traded up to a new trend high of 0.7875 on Friday, late in the day and closing nearby, and with the daily charts looking constructive further gains would seem possible this week, with 0.7900 being the next target, particularly while risk sentiment remains positive, as seen through the stock markets. In the meantime, the short term momentum indicators are showing a degree of bearish divergence so some caution is warranted and we could see a dip back towards the rising-trend support, currently at 0.7830. The AIG Performance of Construction Index will be the focus today, with the China CPI, PPI, New Loans, Retail Sales and Trade Balance all due later in the week.
1 hour/4 hour indicators: Mixed. Daily Indicators: Up Weekly Indicators:  Neutral –Turning higher?
Preferred Strategy:   The 4 hour indicators still look a little toppish so another move back towards 0.7830 would not surprise, below which, 0.7800/0.7810 would attract but buying dips still seems to be the plan. I find it difficult to be long Aud at these levels so prefer to stand aside. Further out though, if the US dollar remains weak, a medium term move towards 0.8000 should not be ruled out.
Resistance Support
0.7935 Descending trend resistance 0.7850 Minor
0.7910 Monthly cloud base 0.7830 Rising trend support
0.7900 Minor 0.7815 Minor
0.7883 19 Dec 0.7790 2 Jan low
0.7870 Friday high 0.7780 100 DMA / (23.6% of 0.7500/0.7870)

Economic data highlights will include:

M:  AIG Performance of Construction Index, China Foreign Exchange Reserves

T:    ANZ Job Ads, Building Permits

W: NAB Business Conditions/Confidence, China CPI, PPI, New Loans

T:  Retail Sales

F: China Retail Sales, Trade Balance, Foreign Asset Investment, Foreign Direct Investment



NZDUSD: 0.7167
The Kiwi traded up to a spike high of 0.7186 on Friday, and with the dailies looking positive further gains would seems possible in the days ahead although, with the 4 hour charts showing a degree of bearish divergence, buying dips would seem to be the plan. At these levels though I prefer to remain flat.
1 hour/4 hour indicators: Mixed. Daily Indicators: Up Weekly Indicators:  Turning higher
Preferred Strategy:  The outlook is pretty much the same as that for the Aud, and a neutral stance is currently preferred although if the dollar stays soft and risk-sentiment positive, then a run above 0.7200 should not be ruled out. The short term momentum indicators are showing some bearish divergence and a drift back towards 0.7145/50 would not surprise but buying dips seems to be the longer term plan.
Resistance Support
0.7244 29 Sept high 0.7144 Friday low
0.7225 Minor 0.7130 Minor
0.7210 13 Oct high 0.7105 200 DMA/55 WMA
0.7200 Minor 0.7090 (23.6% of 0.6787/0.7186)/200 HMA
0.7186 Friday high 0.7065 100 WMA

Economic data highlights will include:                                                                                          

M:

T:

W:

T:

F: Building Permits