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

By | March 1, 2018



EURUSD: 1.2199
EurUsd is trading at 1.2200 on Thursday having broken the previous 1.2205 support and so far having traded down to 1.2187. The techs look heavy but direction today will be driven by the EU February PMIs, the US January core PCE. The Fed’s Powell and Dudley are risks as well.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning lower Weekly Indicators:  Turning higher? – Possible topping formation.
Preferred Strategy:  The short term momentum indicators are pointing lower and a retest of 1.2185 seems likely, and with the dailies also looking heavy we could be in for a run towards the Fibo support at 1.2170 and the 18 Jan low of 1.2164. Under there opens the way to more distant support, the rising trend support from April 2017, currently some way off at 1.2070. On the topside, resistance will be seen at 1.2240 and then at 1.2275/85 and beyond there at 1.2300.

I prefer to look for levels to sell at around 1.2240 today, hoping for a run back down to 1.2185 and possibly to 1.2170, or even lower. SL should be above1.2290.

Sell EurUsd @ 1.2240. SL @ 1.2290, TP @ 1.2170

Resistance Support
1.2359 21 Feb high 1.2200 Minor
1.2325 200 HMA 1.2187 Session low
1.2285 100 HMA 1.2170 (38.2% of 1.1553/1.2550)
1.2260 Minor 1.2164 18 Jan low
1.2240 Session high 1.2135 Minor

Economic data highlights will include:

German Import/Export Index- Q4, EU Mfg PMIs, EU Unemployment – Jan, US Personal Consumption/Expenditure Price Index – Jan, Personal Income/Spending – Jan, Jobless Claims, US Mfg PMI – Feb, ISM Mfg/Prices Paid – Feb, Construction Spending – Jan, Total Vehicle Sales -Feb,

USDJPY: 106.74
US$Jpy ran out of steam above 107.00 as the day wore on, with exporter interest evident and helping to push the pair lower. The minor tightening yesterday by the BOJ did not help the dollar and it does look heavy although  note that there are huge 107 expires next week suggesting some consolidation ahead of next week’s BOJ Meeting and Friday’s NFPs.
1 hour/4 hour indicators: Neutral Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  US$Jpy  looks heavy today although with the dollar looking bid elsewhere, it may be that we just chop around current levels and I suspect trading the range 106.35/107.00 may cover it. The Nikkei Mfg PMI may provide some minor interest but it should be a battle of importers/exporters as we approach the Japan F/Y end. Sidelined.
Resistance Support
107.89 14 Feb high /21 Feb high 106.56 Session low
107.76 22 Feb  high 106.37 26 Jan low
107.51 Session high 106.10 Minor
107.30 Minor 105.90 Minor
107.00 200 HMA 106.54 16 Feb low

Economic data highlights will include:

Nikkei Mfg PMI – Feb, Consumer Confidence Index – Feb

GBPUSD: 1.3768
Cable was choppy in Europe but then headed lower after Barnier’s hard-line Brexit comments and is finishing the day on session lows.
1 hour/4 hour indicators: Turning lower Daily Indicators:  Turning lower. Weekly Indicators:  Possible topping formation.
Preferred Strategy:     Cable remains very choppy, but has reached the rising trend support that we mentioned yesterday, currently sitting at 1.3770. A break of this seems likely and the target would then be the Fibo level at 1.3690, below which there is little to hold Cable up until 1.3600/15. On the topside, resistance will be seen at 1.3800/30. Selling rallies seems to be the plan.
Resistance Support
1.3950 (61.8% of 1.4070/1.3755) 1.3770 Session low /Rising trend support
1.3916 Session high 1.3764 9 Feb low
1.3877 (38.2% of 1.4070/1.3755) 1.3740 Minor
1.3830 (23.6% of 1.4070/1.3755) 1.3690 (50% pivot of 1.3062/1.4345)
1.3800 Minor 1.3615 Minor

Economic data highlights will include:                                      

UK Mfg PMI – Jan, Consumer Credit – Jan

USDCHF: 0.9441
US$Chf has traded higher again today, in reaching 0.9457 from a 0.9383 low, but is now back below 0.9440 although possibly just for a breather before heading higher again later.
1 hour/4 hour indicators: Turning higher Daily Indicators: Up Weekly Indicators:   Turning lower
Preferred Strategy:  As before, the dailies look constructive, so I prefer to look to buy dips, possibly around 0.9400, with a SL placed at 0.9360. The immediate target is 0.9460, and above there we may get a chance to see 0.9500/10 and beyond.
Resistance Support
0.9530 Minor 0.9410 Minor
0.9510 (38.2% of 1.0037 /0.9187) 0.9395 (23.6% of 0.9187/0.9458)
0.9485 Minor 0.9383 Session low
0.9469 8 Feb low 0.9355 (38.2% of 0.9187/0.9458)
0.9457 Session high 0.9324/25 26 Jan low /(50% of 0.9187/0.9458)

AUDUSD: 0.7768
The Aud is trading right on the important 0.7760 support ahead of today’s Capex data, and with the momentum indicators looking heavy it would seem that we have further downside ahead of us. The Caixin Mfg PMI is also due.
1 hour/4 hour indicators: Turning lower. Daily Indicators: Turning lower Weekly Indicators:  Turning lower?
Preferred Strategy:

The momentum indicators are all looking heavy on Thursday, so trading from the short side and selling rallies is preferred. If we do see a squeeze higher, look to sell at around 0.7815, hoping for a return to 0.7760/70. This level is currently holding the Aud up and we may not see any rally, particularly if the Capex disappoints, and a break of 0.7760 will target 0.7745, below which there is little to hold the Aud up until 0.7650 (76.4% of 0.7501/0.8135).

Sell AudUsd @ 0.7815. SL @ 0.7770, TP @ 0.7745.

Resistance Support
0.7901 21 Feb high 0.7780 Session low
0.7892 26 Jan high 0.7777/72 200 DMA/100 DMA
0.7867 27 Feb high 0.7758 9 Feb low
0.7850 Minor 0.7743 (61.8% of 0.7501/0.8135)
0.7818 Session high 0.7720 Minor

Economic data highlights will include:

AIG Performance of Mfg Index – Feb, CAPEX – Q4, Caixin China Mfg PMI

NZDUSD: 0.7210
The Kiwi is heavy but currently holding on above 0.7200 after having earlier traded up to 0.7244. The Terms of Trade coming up.
1 hour/4 hour indicators: Turning lower Daily Indicators:  Turning lower Weekly Indicators:  Turning Neutral
Preferred Strategy:   The 4 hour/daily momentum indicators  still look heavy so I prefer to trade for the short side and to sell rallies with a SL placed  above 0.7270, with the target being the major Fibo level at around 0.7185, (38.2% of 0.6780/0.7438). A close below the 8 Feb low of 0.7176 would eventually suggest lower levels still, but we have to wait and see on that.
Resistance Support
0.7385 21 Feb high 0.7208 Session low
0.7375 Minor 0.7200 Minor
0.7364 22 Feb  high 0.7176 8 Feb low
0.7344 23 Feb high/26 Jan high 0.7170 200 DMA
0.7325 Minor 0.7140 10 Jan low

Economic data highlights will include:                    

Terms of Trade – Q4