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

By | March 23, 2018



EURUSD: 1.2305
EurUsd remains very choppy and has reversed the gains of the previous session. After heading up to 1.2288 in early trade the pair has since turned down, to reach 1.2288 before closing just above 1.2300, weighed down in part by the underwhelming PMIs. There is little EU data risk on Friday although Mario Draghi’s participation in the EC meeting could see a headline risk.
1 hour/4 hour indicators: Turning higher Daily Indicators: Neutral Weekly Indicators:  Possible topping formation.
Preferred Strategy:  It looks like being another choppy day ahead although the Euro does look offered right now but much will depend on political developments.

On the topside, nearby resistance will be seen at 1.2355/60 ahead of the session high at 1.2388. 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 1.2285, 1.2270 and at the Wednesday session low of 1.2240. Below here, look for a move to the minor Fibo level at 1.2220 and then at 1.2200, ahead of the greater degree of Fibo support at 1.2170.

Sell EurUsd @ 1.2350. SL @ 1.2390, TP @ 1.2220

Resistance Support
1.2445 8 March high 1.2300 Minor
1.2412 14 March high 1.2285 Session low
1.2388 Session high 1.2270 Minor
1.2350 Minor 1.2240 21 Mar low
1.2325 200 HMA 1.2220 (76.4% of 1.2154/1.2444)

Economic data highlights will include:

EU Council Meeting, US Durable Goods Orders, New Home Sales, Baker Hughes Oil Rig Count

USDJPY: 105.31
The post-FOMC slide  and the trade war angst  has seen US$Jpy 105.26, equaling the 2018 low at 105.24 but a failure to take out that support has since triggered a mild rebound and some choppy price action before closing the NY session at 105.40. With stocks down by 3%, we might see an early test of 105.00 in Asia.
1 hour/4 hour indicators: Mixed. Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  A cautious approach is required while above 105.25/00 but below which would trigger stops and there is not too much to then hold the dollar up until 104.00/103.50.

On the topside, resistance will be seen at 105.55, which may continue to act as a pivot, but above which could see a return to 106.00. The 4 hour charts are pointing lower and while the dailies are non committal, the weeklies and monthlies are beginning to point increasingly towards a test of 100.00. Selling rallies is preferred.

Sell US$Jpy @ 105.80. SL @ 106.20, TP @ 104.00

Resistance Support
106.63 21 Mar high 105.25 2 March low/Session low
106.20 200 HMA 105.00 Psychological
106.08 Session high 104.65 Minor
105.80 Minor 104.00 Minor
105.55 200 MMA 103.75 Channel base

Economic data highlights will include:

Japan CPI,

GBPUSD: 1.4100
Cable, initially underpinned by some solid UK Retail Sales data (+ 0.8% vs 0.4% exp), then reached a high of 1.4218 following the BOE Meeting, before reversing lower and closing the day at 1.4100.
1 hour/4 hour indicators: Turning higher Daily Indicators:  Turning higher. Weekly Indicators:  Possible topping formation.
Preferred Strategy:    Having reached the major descending trend resistance at 1.4220, which has so far been rejected, this will be the major resistance to watch for now, but ahead of which , minor levels will be at 1.4130 and 1.4170. Beyond 1.4220 would target 1.4250/70 although that remains for another day I suspect, but above there would head back to the 2018 high at 1.4345.

On the downside, support will be seen at minor levels, at 1.4075 and at 1.4025, and while the 4 hour charts look slightly heavy a more sustained test of the support may lie ahead. Further out though, the dailies still look positive, and buying dips may be the medium term trade.

Resistance Support
1.4278 2 Feb high 1.4100 (23.6% of 1.3711/1.4218)
1.4218 Descending trend resistance/Session high 1.4075 Session low
1.4200 Minor 1.4050 Minor
1.4170 Minor 1.4025 (38.2% of 1.3711/1.4150)
1.4130 Minor 1.3995 21 Mar low

Economic data highlights will include:

BOE Quarterly Bulletin

USDCHF: 0.9492
US$Chf traded down to 0.9458 before turning higher to close mid range, back near 0.9500.
1 hour/4 hour indicators: Turning lower Daily Indicators: Neutral – Turning higher? Weekly Indicators:   Neutral
Preferred Strategy:  The short term momentum indicators look neutral today and a cautious stance is required. The dailies still look very mildly positive so overall I still prefer to buy dips towards 0.9450/60, but with a tight SL in place below 0.9420.

On the topside the immediate resistance will again be seen at minor levels at 0.9515 and 0.9540 ahead of 0.9565/70. Beyond there looks unlikely today, but above 0.9570 would head d towards 0.9600, above which allows a move to the 0.9615 Fibo level. Further out, 0.9640 and 0.9665 will see sellers.

Resistance Support
0.9610/15 Daily cloud top/(50% of 1.0037/0.9186) 0.9480 Minor
0.9585 Minor 0.9458 Session low
0.9565/69 21 Mar high /20 Mar high 0.9421 14 March low /(23.6% of 0.9187/0.9569)
0.9540 Minor 0.9400 Minor
0.9515 Session high 0.9380 (50% of 0.9187/0.9569)

AUDUSD: 0.7691
The Aud is lower today after Donald Trump’s China announcement, having previously been weighed down by the disappointing domestic jobs data. Having seen an early high of 0.7785, the price action has been choppy but mostly heavy in reaching 0.7686 ahead of a minor bounce to finish at 0.7700.
1 hour/4 hour indicators: Turning higher. Daily Indicators: Possible basing formation. Weekly Indicators:  Turning lower?
Preferred Strategy:   While the momentum indicators are a little mixed,  I still prefer the downside overall as I think the US/AU yield differential will eventually weigh on the Aud. China concerns will only add to the risk-off mood. If correct, support today will arrive at 0.7685 and then at 0.7670. Below that would allow a move towards 0.7645, below which would allow a move to the 100 WMA (0.7625) and to major rising trend support 0.7570, although that may take a while.

On the topside, resistance will be seen today at 0.7710 and at 0.7725. Above there could stretch back to 0.7750 and to 0.7785 although this seems doubtful. Selling rallies is preferred.

Sell AudUsd @ 0.7725. SL @ 0.7755, TP @ 0.7670

Resistance Support
0.7805 200 DMA 0.7686 Session low
0.7785/79 200 HMA/200 MMA/21 Mar high 0.7671 21 Mar low
0.7750 Minor 0.7645 (50% pivot of 0.7160/0.8135)
0.7725 Minor 0.7625 100 WMA
0.7710 100 HMA 0.7600 Minor

Economic data highlights will include:                                                       

Unemployment – Feb

NZDUSD: 0.7202
The Kiwi has reversed the gains that saw it reach a high of 0.7262 and currently trades at session lows of 0.7210.
1 hour/4 hour indicators: Turning higher Daily Indicators:  Possible basing formation. Weekly Indicators:  Turning Neutral
Preferred Strategy:   The Kiwi looks mixed today and a cautious approach is required although I still p[refer the downside. If so, support will be seen at 0.7200, at 0.7185 and at 0.7150-55, below which would 0.7140 and 0.7115 would attract, although this seems unlikely today.

On the topside, resistance will be seen at 0.7235, 0.7250 and at the Session high of 0.7262. .

Resistance Support
0.7305 (76.4% of 0.7354/0.7153) 0.7200 Minor
0.7275 (61.8% of 0.7354/0.7153) 0.7185 200 DMA
0.7262 Session high /(38.2% of 0.7436/0.7155) 0.7153 21 March low
0.7250 Minor 0.7140 10 Jan low
0.7235 Minor 0.7115 100 DMA