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

By | March 15, 2018


EURUSD: 1.2375
Having made a new high for the week during the Asian session, EurUsd has since been choppy but generally rangebound on Wednesday although the dollar remains under some downside pressure against all the major pairs.

Also of note, Mario Draghi was speaking and reiterated that the ECB is in no rush to change policy, causing the Euro to head a little lower and bund yields to fall to the lowest level in seven weeks.

1 hour/4 hour indicators: Mixed. Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  The charts are all pretty much neutral right now and a cautious stance is required although sentiment currently seems a little negative towards the dollar and further downside pressure could be seen in coming sessions. If so, 1.2400/10 will again be the initial resistance, above which could head back to 1.2440 and even to 1.2500 although probably not today.

On the downside, support will be seen at 1.2345/50 and then again at around 1.2300. Below this looks unlikely right now but if wrong, we could see a run back towards 1.2265.

The bigger picture also looks neutral from a technical perspective although I think that the improving US data and expected rate hikes will keep the dollar relatively underpinned, for an eventual move towards the rising trend support, currently at 1.2140.

Resistance Support
1.2500 Minor 1.2345/50 Session low /200 HMA
1.2444 8 Mar high 1.2313 13 March low
1.2420 Minor 1.2290 12 March low
1.2412 Session high 1.2272 9 March low
1.2400 Minor 1.2265 (61.8% of 1.2154/1.2444)

Economic data highlights will include:

New York State Empire Mfg Index, Philadelphia Fed Mfg Survey, Jobless Claims, NAHB Housing Market Index

USDJPY: 106.24
US$Jpy has been heavy again today after the release of the US Retail Sales but within the recent range and looks as though it could chop around current levels as we head towards the 21 March FOMC Meeting. The appointment of Kudlow as the next NEC Director may take some of the fears out of the prospect of a trade war and investors will be hoping for a calmer trade debate, which in turn may underpin the dollar.
1 hour/4 hour indicators: Turning lower Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  A cautious approach is required and 106/107 range may continue to cover it today although the short term momentum indicators do look a little heavy and a test of 106.00 may be on the cards. If so, look for a run back towards the 200 MMA at 105.70. On the topside, resistance will be seen at 106.70/75 and above that at 107.00. All up, don’t expect too much until the Fed, next week, although the dollar does look a little heavy right now.
Resistance Support
107.67 27 Mar high 106.05 Session low
107.47 (23.6% of 114.73/105.25) 105.88 8 Mar low
107.28 13 March high 105.70 200 MMA
107.00 Minor 105.45 7 March low
106.73 Session high 105.25 2 March low

GBPUSD: 1.3968
Cable   remains firm on Wednesday on rising UK rate sentiment ahead of the Mar 22 BoE meeting although it has so far run into good selling interest ahead of 1.4000.
1 hour/4 hour indicators: Neutral Daily Indicators:  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/daily indicators are neutral, and on the topside resistance will arrive at 1.4000, which should be strong if we get there but above which would open 1.4030, 1.4070 and eventually 1.4100. On the downside, minor support will be seen at 1.3950 ahead of the session low at 1.3925 and at 1.3900. Sidelined.
Resistance Support
1.4100 (61.8% of 1.4345/1.3711) 1.3950 Minor
1.4070 26 Feb high 1.3925 Session low
1.4030 (50% pivot of 1.4345/1.3711) 1.3900 Minor
1.4000 Psychological 1.3875 13 March low
1.3995 13 March high 1.3840 12 March low

USDCHF: 0.9445
US$Chf traded a little lower on Wednesday, taking the dollar down to 0.9423 before settling the day at 0.9445.  All will now depend on today’s SNB Interest Rate Decision although no change to policy is expected.
1 hour/4 hour indicators: Neutral Daily Indicators: Neutral Weekly Indicators:   Neutral
Preferred Strategy:  The short term momentum indicators look a little heavy, and the dailies are running out of steam on the topside but I still prefer to look to buy dips, possibly nearer 0.9400 today, with a SL placed below 0.9375. On the topside, the immediate resistance will be seen at 0.9480, at 0.9500/10 and then at the 8 March high of 0.9534.
Resistance Support
0.9550 Minor 0.9440 200 HMA
0.9534 8 Mar high 0.9421/23 8 Mar low /Session low
0.9512 (38.2% of 1.0037/0.9186) /12 March high 0.9400 (38.2% of 0.9186/0.9534)
0.9493 13 March high 0.9380 Minor
0.9480 Session high 0.9357 7 March low

Economic data highlights will include:                                                                                                                 

SNB Interest Rate Decision

AUDUSD: 0.7883
The Aud has taken advantage of the positive technicals in reaching a high of 0.7915 after the US Retail Sales but then turned lower as risk sentiment soured, closing the day back at 0.7880..
1 hour/4 hour indicators: Mixed. Daily Indicators: Turning higher Weekly Indicators:  Turning lower?
Preferred Strategy:

The short term momentum indicators look a little heavy today although the dailies remain constructive and this allows the chance of a return to 0.7900 and 0.7915 in coming sessions. Above there would open the way towards 0.7975 although possibly not yet.

On the downside, support will be seen at 0.7845/50 and again at 0.7820. Further out, 0.7800, 0.7780 and the 7 Mar low of 0.7771 are rather distant targets although this currently seems a long way off.

Resistance Support
0.7975 (61.8% of 0.8135/0.7711) 0.7850/45 Session low /13 March low
0.7935 Minor 0.7820 Minor
0.7922 (50% of 0.8135/0.7711) 0.7800 Pivot
0.7916 Session high 0.7790/87 200 DMA /200 HMA
0.7900 Minor 0.7770 100 DMA / 7 Mar low/8 Mar low

Economic data highlights will include:                                                     

Consumer Inflation Expectations – Mar, New Motor Vehicle Sales – Jan, RBA Bulletin

NZDUSD: 0.7334
The Kiwi has been choppy in spiking up to 0.7353 before retreating to a low of 0.7317, since when it has gyrated within the range and is closing more of less in the middle while now waiting on the upcoming Q4 GDP figure (exp 0.7%qq, 3.1%yy) .
1 hour/4 hour indicators: Neutral 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 a possible topping formation. Today will find offers at 0.7350/55 and at the 22 Feb, 0.7365 high, beyond which opens 0.7400+. Bids will arrive again at 0.7315, at 0.7290/00 and then at 0.7245/50 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
0.7385 21 Feb high 0.7317 Session low
0.7375 (76.4 % of 0.7436/0.7185) 0.7290 13 March low
0.7365 22 Feb high 0.7244/49 8 Mar low /9 March low
0.7354 13 March high /Session high 0.7220 6 Mar low
0.7340 (61.8 % of 0.7436/0.7185) 0.7202 5 Mar low

Economic data highlights will include: