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

By | March 21, 2018


EURUSD: 1.2240
EurUsd has reversed the gains of the previous session following the soggy EU data and now sits at the day’s lows while waiting on today’s FOMC Meeting.
1 hour/4 hour indicators: Turning lower Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  The short term momentum indicators look negative on Wednesday and the Euro is now back in the middle of the daily cloud. The dailies remain neutral though so I don’t think we should expect too much either way ahead of the FOMC outcome at which time it will become highly volatile.

On the topside, if we get back above 1.2300, resistance will be seen at 1.2335, 1.2355/60 ahead of the 15 March high at 1.2383. Beyond there could then return to 1.2400/10, above which could head back to 1.2440 and even to 1.2500 although not today.

Support today should arrive at the minor Fibo level at 1.2220 and then at 1.2200 ahead of the greater degree of Fibo support at 1.2170. Below there would target 1.2150/60, which should be strong if we get there, and possibly the daily cloud base at 1.2125, although this currently looks safe unless the FOMC paint a very hawkish outlook.

The longer term charts still look rather neutral from a technical perspective although I think that the improving US data and expected rate hikes, starting today, will keep the dollar relatively underpinned, for an eventual move towards the rising trend support, currently at 1.2160.

Resistance Support
1.2383 15 March high 1.2240 Session low
1.2358/54 19 March high /Session high 1.2220 (76.4% of 1.2154/1.2444)
1.2330 200 HMA 1.2200 Minor
1.2300 Minor 1.2171 (38.2% of 1.1553/1.2555)
1.2380 Minor 1.2154/60 1 March low/Rising trend support

Economic data highlights will include:

EU Non Monetary Policy Meeting, FOMC Meeting/Interest Rate Decision, Fed Chair Powell Speech, Existing Home Sales, EIA Crude Oil Stocks Weekly Change

USDJPY: 106.53
US$Jpy was choppy again on Tuesday but did manage to bounce to 106.60, fishing just below there although further progress will be hampered today ahead of the FOMC by the very large, $2.8 bio,  NY Cut expiries at 106.00.
1 hour/4 hour indicators: Turning higher. Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  A cautious approach is required ahead of the FOMC and the US$ could well drift back towards 106.00 on the basis of the large option expiries. Technically though, the 4 hour momentum indicators still look mildly constructive and if we manage to break above 106.60, a test of the descending trend resistance at around 106.75 may be on the cards. Above here could stretch to 107.00 and then to 107.30/40.

On the downside, back below 105.90/106.00, support will be seen at the 200 MMA at 105.70 and then at 105.60. Below here opens 105.25 and 105.00. I prefer to buy dips.

Resistance Support
107.47 (23.6% of 114.73/105.25) 106.35 200 HMA
107.28 13 March high 105.92 Session low
107.00 Minor 105.70 200 MMA
106.73 14 March high / Descending trend resistance 105.67/59 19 March low/16 Mar low
106.60 Session high 105.45 7 March low

GBPUSD: 1.3997
Cable reached 1.4066 today although the combination of the soft UK/EU data has since weighed on the downside and the pair is closing at 1.4000 after recovering from a brief dip to 1.3982. UK Jobs data, FOMC today, BOE tomorrow (No change expected) in focus.
1 hour/4 hour indicators: Turning lower Daily Indicators:  Turning higher. Weekly Indicators:  Possible topping formation.
Preferred Strategy:     From a technical perspective, the daily charts do hint at the chance of another move to the topside and if correct, look for a run back1.4065 and to 1.4085 above which would open the way to 1.4090/4100. Above here would allow for 1.4145 and possibly on to 1.4190/00, with major descending trend resistance coming in at 1.4235.

On the downside, support will be seen at 1.3980 and again at 1.3965 and 1.3945. Under here could see us back at 1.3890/00 although that may need a rather hawkish FOMC outcome.

Resistance Support
1.4144 16 Feb high 1.3982 Session low
1.4100 (61.8% of 1.4345/1.3711) 1.3970 100 HMA
1.4087 19 March high 1.3945 (38.2% of 1.3711/1.4087)
1.4066 Session high 1.3930 200 HMA
1.4040 Minor 1.3890 16 March low

Economic data highlights will include:

UK Unemployment – Jan, PSNBR – Feb, CBI Distributive Trade Survey – Orders – Mar

USDCHF: 0.9565
US$Chf has traded up to 0.9569 late in the US session as the Euro heads higher, after having earlier held on above the 0.9500 handle.
1 hour/4 hour indicators: Turning higher. Daily Indicators: Neutral – Turning higher? Weekly Indicators:   Neutral
Preferred Strategy:  The short term momentum indicators look constructive again today, while the dailies still seem to be picking up steam, leaving the overall bullish bias intact.

If correct, on the topside the immediate resistance will again be seen at 0.9570 and then at minor levels as we head towards 0.9600, above which allows a move to the 0.9615 Fibo level. Further out, 0.9640 and 0.9665 will see sellers.

On the downside, support will be seen at 0.9490/0.9500 and then at 0.9465 and 0.9420.

Prefer to buy dips and to be long dollars although maybe wait for the FOMC.

Resistance Support
0.9666 18 Jan high 0.9535 Minor
0.9640 22 Jan high 0.9501 Session low
0.9610/15 Daily cloud top/(50% of 1.0037/0.9186) 0.9480 (23.6% of 0.9187/0.9569)
0.9585 Minor 0.9465 Minor
0.9569 Session high 0.9421 14 March low

Economic data highlights will include:

Trade Balance

AUDUSD: 0.7681
The Aud remains heavy and is trading at the session low of 0.7680, with direction likely to come from the FOMC outcome. Traders are currently unsure if the Aud$ weakness is a sign of global macro trouble or s signalling an imminent turn in broader US$ strength. Later in the week, on Friday, Donald Trump will reveal China trade strategy which will be a major item for the Aud$.
1 hour/4 hour indicators: Mixed. Daily Indicators: Down Weekly Indicators:  Turning lower?
Preferred Strategy:   The short term momentum indicators are oversold and appear to be trying to turn higher today although the dailies are tilting increasingly lower and selling rallies would appear to be the theme.

Overall, I prefer the downside still, and if correct, below 0.7680 would allow a move towards 0.7645, with only minor support at 0.7670 lying ahead of that. Under 0.7645 would allow a move to the 100 DMA (0.7615) and to major rising trend support 0.7570, although that may take a while.

On the topside, resistance will be seen at 0.7700, at the session high of 0.7720 and then at 0.7735 and 0.7770.

Prefer to sell rallies

Sell AudUsd @ 0.7710. SL @ 0.7755, TP @ 0.7650

Resistance Support
0.7805 200 DMA /(50% of 0.7916/0.7686) 0.7678 Session low
0.7785 200 MMA 0.7670 Minor
0.7770 100 DMA /(38.2% of 0.7916/0.7686) 0.7645 (50% pivot of 0.7160/0.8135)
0.7735 (23.6% of 0.7916/0.7686) 0.7610 Minor
0.7720 Session high 0.7580 Minor

NZDUSD: 0.7184
The Kiwi has reversed the gains of the previous session and now sits at the day’s lows of 0.7176. The FOMC is the next focus and this comes 2 hours ahead of Thursday’s RBNZ Meeting, at which no change is expected,
1 hour/4 hour indicators: Turning lower Daily Indicators:  Turning lower Weekly Indicators:  Turning Neutral
Preferred Strategy:   The Kiwi is now at important support at 0.7175, a break of which would open the way to 0.7140 and the 100 DMA at 0.7110. Below 0.7100 would then allow another drop towards 0.7070.

Today will find offers at 0.7200 ahead of 0.7220 and 0.7245/50 although this looks relatively safe and selling rallies is preferred.

Resistance Support
0.7285 (61.8% of 0.7354/0.7176) 0.7185 200 DMA
0.7265 (50% of 0.7354/0.7176) 0.7176 8 Feb low/Session low
0.7245/48 (38.2% of 0.7354/0.7176)/Session high 0.7140 10 Jan low
0.7218 (23.6% of 0.7354/0.7176) 0.7115 100 DMA
0.7200 Minor 0.7100 Minor

Economic data highlights will include:

NZ Visitor Arrivals – Feb, WBC Leading Economic Index – Feb, Credit Card Spending – Feb