28 Feb: Forecast: FX: US$/Majors + trade ideas

By | February 28, 2018



EURUSD: 1.2230
EurUsd is lower today, initially following the lower than expected German CPI, and then on the back of Powell’s upbeat outlook, but so far is holding on above decent support above 1.2200. It will be a busy session ahead with the German Gfk Consumer Sentiment and Unemployment, and then the US ISM/Prices Paid and the US Personal Consumption/Expenditure Index in focus.
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 test of 1.2200 seems likely, and with the dailies looking heavy we could be in for a run towards the Fibo support at 1.2170.

Under there opens the way to the rising trend support from April 2017, currently some way off at 1.2070. On the topside, resistance will be seen at 1.2260/80 and beyond there at 1.2300.

I prefer to look for levels to sell at around 1.2265/75, hoping for a run back down to 1.2200 and possibly to 1.2170. SL should be above1.2310

Sell EurUsd @ 1.2270. SL @ 1.2315, TP @ 1.2170

Resistance Support
1.2359 21 Feb high 1.2220 Session low
1.2345 Session high 1.2205 9 Feb low
1.2300 100 HMA 1.2170 (38.2% of 1.1553/1.2550)
1.2280 Minor 1.2164 18 Jan low
1.2255 Minor 1.2135 Minor

Economic data highlights will include:

German Consumer Confidence Survey – Mar, German Unemployment – Feb, Provisional EU CPI – Feb, US Provisional Q4 GDP/Personal Consumption/Expenditure Index, Chicago Purchasing Managers Index, – Feb, Pending Home Sales, – Jan, Fed’s Powell Testimony to Congress, EIA weekly crude oil stock change

USDJPY: 107.36
US$Jpy ran up to 107.67, from and earlier low of 106.78, on Powell’s comments but is currently trading back at 107.35, with the Jpy in some demand through selling of EurJpy.
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  US$Jpy  seems to be building a base and managed to spend the entire day above the daily Tenkan (106.70), adding confidence to further upside momentum. I prefer to buy dips to 107.00, looking for a run up to 107.90 and possibly higher. If we can crack 108.00 we may head towards 108.35. Downside stops should be placed under 106.70.

Buy US$Jpy @ 107.00. SL @ 106.65, TP @ 107.90

Resistance Support
108.35 Daily Kijun 107.15 Minor
108.00 Minor 107.00 Minor
107.89 14 Feb high /21 Feb high 106.77 Session low
107.76 22 Feb  high 106.50 Minor
107.67 Session high 106.37 26 Jan low

Economic data highlights will include:

Provisional Industrial Production – Jan, Retail Trade – Jan, Housing Starts, Construction Orders – Jan

GBPUSD: 1.3905
Cable had another volatile day on Tuesday, pushed around by a combination of M&A talk, Brexit headlines and Powell’s testimony. At the end of the session it is sitting above 1.3900 after a range of 1.3995/1.3857.
1 hour/4 hour indicators: Neutral Daily Indicators:  Turning Neutral. Weekly Indicators:  Up –Possible topping formation.
Preferred Strategy:     Cable remains very choppy, and with the momentum indicators giving little hint it is probably best left alone right now although the dailies do look slightly heavy so possibly selling rallies, with a SL above 1.4000 may be a plan. The medium term target would be at around the Rising trend support, currently at 1.3780.
Resistance Support
1.4040 Minor 1.3900 Minor
1.4025 Minor 1.3880 Minor
1.3995 Session high 1.3857 Session low
1.3975 Minor 1.3825 Minor
1.3940 Minor 1.3800 14 Feb low

Economic data highlights will include:                                      

UK Consumer Confidence – Feb

USDCHF: 0.9391
US$Chf has traded higher in reaching 0.9416 from a 0.9357 low, but is now back below 0.9400, with the Chf in some demand through the cross (EurChf), which remained heavy after ht lower than expected German CPI.
1 hour/4 hour indicators: Turning higher? Daily Indicators: Turning higher Weekly Indicators:   Turning lower
Preferred Strategy:  As before, the dailies look constructive, so I prefer to look to buy dips, possibly around 0.9360, with a SL placed at 0.9310. The immediate target is 0.9410/20, and above there we may get a chance to see 0.9470/0.9500.
Resistance Support
0.9510 (38.2% of 1.0037 /0.9187) 0.9357 Minor
0.9469 8 Feb low 0.9340 Minor
0.9440 Minor 0.9324/27 26 Jan low /200 HMA
0.9416 Session high 0.9300 Minor
0.9400 Minor 0.9262 22 Feb low

AUDUSD: 0.7787
The Aud is lower at the end of the US session, trading on its lows and look as though it will test the 0.7760 support at any moment. A lower than expected reading today from the  Private Sector Credit – Jan, China NBS Mfg/Non-Mfg PMIs would help it on its way.
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 Wednesday, so trading from the short side and selling rallies is preferred. If we do see a squeeze higher, look to sell at around 0.7825, hoping for a return to 0.7760/70 which should be decent support if/when we get there. We may not see a rally, and a break of 0.7760 will target 0.7745 and then there is little to hold the Aud up until 0.7650 (76.4% of 0.7501/0.8135).

Sell AudUsd @ 0.7820. SL @ 0.7770, TP @ 0.7745.

Resistance Support
0.7901 21 Feb high 0.7783 Session low
0.7892 26 Jan high 0.7772 200 DMA/100 DMA
0.7867 Session high 0.7758 9 Feb low
0.7850 Minor 0.7743 (61.8% of 0.7501/0.8135)
0.7825 Minor 0.7720 Minor

Economic data highlights will include:

Private Sector Credit – Jan, China NBS Mfg/Non-Mfg PMIs

NZDUSD: 0.7234
The Kiwi had a tough session in heading down to a low of 0.7230 from its high of 0.7304. Closing the US session on its lows, further losses look likely.
1 hour/4 hour indicators: Neutral 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 0.7233 Session low
0.7375 Minor 0.7220 Minor
0.7364 22 Feb  high 0.7200 Minor
0.7344 23 Feb high/26 Jan high 0.7176 8 Feb low
0.7325 Minor 0.7170 200 DMA

Economic data highlights will include:

Visitor Arrivals – Jan, ANZ Activity Outlook, Business Confidence -Feb