20 Feb: Outlook: US$ pairs

By | February 20, 2017
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EURUSD: 1.0609

The Euro traded in heavy fashion on Friday, unable to overcome the offers at 1.0675 and drifted back to finish just above the lows of 1.0605.

The momentum indicators are somewhat mixed on Monday and it looks like being a fairly tight session in the absence of the US market but the hourlies are pointing a little lower, so back below 1.0600 would find minor Fibo support at 1.0580 and 1.0555 ahead of the recent 1.0520 low. A break of 1.0500 would allow for a quick move lower as there is not too much below their ahead of 1.0453 although this looks some way off. On the topside, minor resistance will be seen at 1.0640 ahead of 1.0675/80. Above here looks unlikely, but we could potentially see a move back to 1.0700/10. A neutral stance is requires although the dailies mildly suggest lower levels in the days ahead. For today, look for 1.0580/1.0640 to cover it. The EU Feb consumer confidence (Mon) and Markit Mfg/Services PMIs (Tue) will be the focus early in the week

24 Hour: Mildly bullish Medium Term: Prefer to sell rallies
Resistance Support
1.0797 3 Feb high 1.0604/00 Friday low/(50% pivot of 1.0520/1.0678)
1.0755 (76.4% of 1.0829/1.0520) 1.0580 (61.8% of 1.0520/1.0678)
1.0710 (61.8% of 1.0829/1.0520) 1.0555 (76.4% of 1.0520/1.0678)
1.0675/78 (50% of 1.0829/1.0520) /16 Feb high 1.0520 15 Feb low
1.0635 200 HMA 1.0500 Minor

Economic data highlights will include:

M:  US Presidents Day Holiday, German PPI, BuBa Monthly Report, EU Consumer Confidence

T:  EU Flash Manufacturing/Services/ Composite PMIs, US Flash Manufacturing/Services/Composite PMIs, Fed’s Harker Speech

W:  German IFO Business Climate/Expectations, EU CPI, EU Targeted LTRO, US Existing Home Sales, FOMC Minutes, API Weekly Crude Oil Stock Inventory

T: German Consumer Confidence, US Jobless Claims, House Price Index, Kansas Fed Mfg Activity, EIA Crude Oil Stocks Weekly Change

F: Michigan Consumer Sentiment Index, Baker Hughes Oil Rig Count


USDJPY: 112.90

US$Jpy headed a little lower on Friday as traders watched the stock markets drift off, and accordingly saw some minor safe haven hedging demand which helped to underpin the Jpy, and which finished the week back near the recent 113.00 pivot.

The short term indicators are mixed on Monday and a choppy session near 113.00 looks likely. Below 112.60 could see a run towards 112.40, which should be good support, but a break of which would run towards 112.00 and possibly to the recent low at 111.58 although that seems some way off.  On the topside, today will see sellers at the various minor Fibo levels from the decline from last week’s high at 114.95. If 114.95 is taken out, unlikely today, there is little to stop the dollar heading on to 115.15/20, above which 115.60 would attract. A rangebound session looks most likely, using 112.40/113.40 as a guide.

24 Hour: Mildly bearish Medium Term: Prefer to buy dips
Resistance Support
114.25 (61.8% of 114.95/113.12) 112.85 (61.8% of 111.58/114.95)
114.04 (50% pivot of 114.95/113.12) 112.60 Friday low
113.80 (38.2% of 114.95/113.12) 111.38 (76.4% of 111.58/114.95)
113.49/55 Friday high (23.6% of 114.95/113.12) 112.00 Minor
113.30 200 HMA 111.70 Minor

Economic data highlights will include:

M:  Trade Balance

T:  Nikkei Flash Mfg PMI

W:

T: Foreign Bond/Stocks Investment

F:.


GBPUSD: 1.2407

Sterling fell heavily, to a low of 1.2387, after the disappointing retail sales unexpectedly dropped -0.3% mm in January versus expectation of 1.0% rise. By the end of the session Cable was back at 1.2420, right on the 100 DMA, but is beginning to look increasingly heavy.

Cable had a tough Friday session, falling hard from 1.2510 to a low of 1.2387 after the Retail Sales. .While the choppy range of recent days looks set to continue, the short term momentum indicators do  look a little heavy and a run towards the 7 Feb, 1.2345 low  may be on the cards, below which could eventually see a run to 1.2260. On the topside, minor resistance will be seen at 1.2450 and at 1.2485 ahead of Friday’s peak at 1.2510. Selling rallies looks to be the theme right now although it may be that the 100 DMA acts a pivot today.

24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.2548 14 Feb high 1.2410 100 DMA
1.2523 16 Feb high 1.2387/82 Friday low /16 Feb low
1.2510 Friday high 1.2345 Daily Kijun/7 Feb low
1.2485 200 HMA 1.2305 Daily cloud base
1.2450 Minor 1.2260 (61.8% of 1.1986/1.2705)

Economic data highlights will include:

M:

T: PSNBR

W: UK Provisional GDP (Q4), Total Business Investment (Q4)

T:


USDCHF: 1.0026

In line with the lower EurUsd, US$Chf was slightly higher at the end of Friday trade, but within a tight range, using 1.0000 as a pivot.

The indicators look a little clearer than those of the Euro, and the 1 & 4 hour and the dailies all now seem to hint at slightly higher levels ahead. Note that the pair finished above the 100 DMA, adding to the cautiously bullish tone although it could end up being a rangebound session today in the absence of any major data or a NY market.. Above Friday’s high though could see a run back towards 1.0050 and on to 1.0100/20. The downside will find minor support at the 1.000 pivot ahead of Friday’s low of 0.9965.  Further bids would arrive at 0.9950/60, 0.9920 and 0.9900, below which would open the way 0.9870 although not today.  Buying dips still seems to be the plan given that the dailies look positive but keep a SL below 0.9955.

24 Hour: Mildly bearish Medium Term: Prefer to buy dips
Resistance Support
1.0136 16 Jan high 1.0000 Pivot
1.018/121 16 Feb high/19 Jan high 0.9965 Friday low
1.0085 Minor 0.9958 (61.8% of 0.9861/1.0118)
1.0050 Minor 0.9921 (76.4% of 0.9861/1.0118)
1.0033 Friday high/100 HMA 0.9903 6 Feb high

AUDUSD: 0.7668

The move back above 0.7700 on Friday (high: 0.7712) was not sustained and the stronger US$ pressured the Aud back to the rising trend support at 0.7655, which has so far held, but looking rather precarious. The focus for the coming week will be on the RBA minutes, Q4 CAPEX, & RBA Governor Lowe speech.

The momentum indicators look a little mixed and further choppy trade near current levels would not really surprise at the start of the week. On the topside minor resistance will arrive at 0.7685 and at 0.7700 ahead of Friday’s 0.7712 high, and then ahead of the 16 Feb, 0.7732 high. This looks unlikely to be seen any time soon, but if wrong, look for a run to 0.7750 where the descending trend resistance will provide a strong cap. On the downside, the rising trend support currently at 0.7660 will see bids but the short term momentum indicators suggest that this is going to come under pressure and we could then see the Aud head back towards the lower end of the recent 0.7600/0.7700 range. In the absence of any data today, look for something like 0.7630/90 to cover it.

24 Hour: Prefer to sell rallies Medium Term: Neutral
Resistance Support
0.7750 Descending trend resistance 0.7655/60 Friday low/Rising trend support
0.7731 16 Feb high 0.7636 16 Feb low
0.7712 Friday high 0.7617 14 Feb low
0.7700 Minor 0.7605 7 Feb low
0.7685 Minor 0.7590 Minor

Economic data highlights will include:

M:

T:  RBA Minutes

W: CB Leading Economic Index, RBA Governor Lowe Speech, WBC Leading Index, Wage Price Index, Construction Work Done, China House Price Index

T: Private Capital Expenditure (Q4)

F:.


NZDUSD: 0.7182

The Kiwi was choppy on Friday and without doing too much it finished back below 0.7200 and is beginning to look a little heavy again. The PPI is due today, Global Dairy Trade Index tomorrow, European time.

The short term momentum indicators are mixed on Monday suggesting a fairly tight session, possibly capped by 0.7200/10, although if we get above there we could head back to the 16 Feb high (0.7231), above which could then head towards 0.7255. Beyond there brings 0.7280/0.7300 into view, but not today. On the downside, the daily indicators remain bearish, so selling into near term strength near 0.7200 is preferred, looking for a run back towards minor support at 0.7150/60. Below here looks unlikely today, but if wrong, look for a move towards 0.7135 and then to the very strong support at 0.7120/15.

24 Hour: Prefer to sell rallies Medium Term: Prefer to sell rallies
Resistance Support
0.7317 (76.4% of 0.7375/0.7133) 0.7179 Friday low
0.7282 (61.8% of 0.7375/0.7133) 0.7155 Minor
0.7255 (50% of 0.7375/0.7133) 0.7134 14 Feb low
0.7242 16 Feb high 0.7120/15 200 DMA/100 DMA/55 DMA Converging/(50% of 0.6857/0.7375)
0.7220 Friday high 0.7070 13 Jan low

Economic data highlights will include:

M:  NZ PPI

T:  Global Dairy Trade Index

W:

T:

F:.