4 Aug: Forecast: FX: US$/Majors

By | August 4, 2017


EURUSD: 1.1871
24 Hour: Neutral Medium Term: Mildly Bullish
EurUsd has been choppy on Thursday, trading below the trend high in a sideways range of 1.1830/1.1892, leaving the outlook unchanged.

Technically, it looks as though we will be in for a similar outcome while waiting on the NFP result in the US session. A soft outcome to the jobs data would see the Euro head back above 1.0910, and there is very little resistance to stand in the way of a move towards 1.2000, with the next Fibo level is not actually seen until 1.2165 (50% of 1.3993/1.0340). While the daily momentum indicators are overbought, hinting at a possible correction, the weekly and monthly charts are both heading firmly higher.

On the downside, near term support arrives at the session low and then, below 1.1800, at the 200 WMA at 1.1785. Below there, we could head back to the 31 July low of 1.1722 and eventually to 28 July’s low of 1.1670, although a little unlikely at this stage.

Preferred Strategy: Neutral. Go with the flow after the US jobs data. Overall, buying dips still seems to be the plan.

Resistance Support
1.1996 Dec 14 low/55 MMA. 1.1830 Session low
1.1976 Jan 2015 high 1.1793 2 Aug low
1.1950 Minor 1.1785 200 WMA /1 Aug low
1.1909 1 Aug high 1.1750 Minor
1.1892 Session high 1.1722 31 July low

Economic data highlights will include:

German Factory Orders, US Jobs/NFP/Average Hourly Earnings data

USDJPY: 110.00
The dollar remained under pressure against the Jpy after the miss in the ISM Non-Mfg figure, and late in the session the pair has traded down to a low of 109.85.

The short term indicators are generally looking rather heavy, and a soft NFP outcome could see the dollar retest the lows and beyond, where 109.65 should provide some support. . Below there though could eventually see a run towards 109.25 and even to 108.80 (Weekly Cloud Base).

A good Jobs number would allow the dollar a reprieve, although the descending trend resistance now lies at Thursday’s high at 110.85. Above here would allow a run to 111.00 and then to the 200 WMA at 111.25 and then 111.40 (100 DMA). These should combine to prevent further gains today, but if wrong, look for a move towards 111.65 and eventually to 111.90 (100 WMA) which should be strong resistance, if/when we get there.

Preferred Strategy: Neutral

Resistance Support
111.25 200 WMA 109.85 Session low
110.95/97 (23.6% of 114.50/109.85)/2 Aug high 109.65 (76.4% of 108.12/114.50)
110.82 Session high/Descending trend resistance 109.50 Minor
110.47 100 HMA 109.30 Minor
110.20 Minor 109.00 Minor

GBPUSD: 1.3134
24 Hour: Prefer to sell rallies Medium Term: Neutral
Sterling jumped to a new 11 month high of 1.3267 on the better than expected Services PMI, before collapsing to 1.3111 following the dovish tone from the ECB meeting. This has ensured a bearish outside day in GbpUsd (as well as GbpAud & GbpNzd) and leaves the outlook more bearish.

The short-term momentum indicators now pointing lower although the dailies currently look reasonably neutral. If we do head below 1.3100, we could then return to 1.3045/60 and then to 1.3020 ahead of the next Fibo support at around 1.3005.

On the topside, resistance will be seen at various minor levels towards 1.3200 and above, where the session high would prove a tough level to break although it would need a very poor NFP outcome to head back up here.

Preferred Strategy: It is best to wait for the NFP, but technically, with the short term momentum indicators now looking bearish, selling rallies, with a SL placed above 1.3200 would seem to be the plan.

Resistance Support
1.3278 15 Sept ‘16 high 1.3112/06 Session low/ (23.6% of 1.2588/1.3267)
1.3267 Session high 1.3096 Minor
1.3330 Minor 1.3060 28 July low
1.3200 Minor 1.3048 27 July low
1.3180 Minor 1.3005 (38.2% of 1.2588/1.3267)

USDCHF: 0.9680
24 Hour: Neutral Medium Term: Mildly Bullish
US$Chf has chopped around within a range of 0.9761/0.9716, leaving the outlook unchanged.

The short term momentum indicators are mixed but the dailies still look positive so if 0.9720/30 can be overcome we could see a quick run higher to where 0.9765 and 0.9805 will provide minor resistance ahead of the 100 WMA at 0.9870.

On the downside, the initial support lies at 0.9670/75 and then at the lows of Tuesday/Wednesday, at 0.9646 and at 0.9630, ahead of the 100 MMA (0.9600) which should be decent support if we see it. Below that could then revisit what may be the neckline of a reverse H/S formation at 0.9585 (objective: 0.9745), and back below there would head back to the 200 WMA at 0.9555 and then towards 0.9500

Preferred Strategy:  Neutral. Possibly look to buy dips at 0.9630/45, looking for a topside break of 0.9730. SL sub 0.9600.

Resistance Support
0.9807 30 May high/100 DMA 0.9671 Session low
0.9780 Minor 0.9646 2 Aug low
0.9765 (50% pivot of 1.0100/0.9437) 0.9630 1 Aug low
0.9726 28 July high 0.9600 100 MMA
0.9716 Session high 0.9585 Neckline

AUDUSD: 0.7949
24 Hour: Prefer to sell rallies Medium Term: Neutral – Possibly look to buy dips.
The Aud looked heavy for much of Thursday but held on above 0.7900 (low 0.7913) and eventually squeezed higher when the US$ came under pressure following the soft US data. The focus will now turn to the Australian Retail Sales (June; exp +0.2%mm) and Monetary Policy Statement although most of the focus will be on the US jobs data later in the day.

On the topside, above the session high of 0.7962, the 200 MMA and the 200 WMA will continue to act as resistance, but a break of which could then see a return to Tuesday’s high of 0.8041 and then to the trend high of 0.8065. Above 0.8065, there is little to stop the Aud from heading to 0.8160, albeit probably not today.

On the downside minor support would arrive at 0.7935/40 and below here could then see a run back towards 0.7915. Below 0.7890/00 would allow a move to 0.7875 which should be strong support if/when we get there, below which opens 0.7850.

The dailies are warning the longs, but on the other hand, the longer term charts (weekly/monthly) still hint that buying dips remains the medium term plan.

Preferred Strategy: The dailies are looking increasingly toppish, so once again, selling rallies with a SL above 0.8000 could be a plan heading into the local data although waiting for the NFP seems wise.

Resistance Support
0.8065 26 July high 0.7935 Minor
0.8042 1 Aug high 0.7913 Session low
0.8000 200 WMA 0.7890 (23.6% of 0.7328/0.8065)
0.7985 200 MMA 0.7874 21 July low /26 July low
0.7968 Session high 0.7850 Minor

Economic data highlights will include:                       

Retail Sales (June), RBA Monetary Policy Statement

NZDUSD: 0.7435
24 Hour: Prefer to sell rallies Medium Term: Neutral
The Kiwi headed down to 0.7390 in Asia but has since recovered to settle at 0.7435.

The momentum indicators are mixed although the 4 hour charts do point higher now and on the topside, the weekly charts still suggest that further medium term gains may lie ahead.

Back above the session high of 0.7450 would open up a move to 0.7475, above which may lead the Kiwi back to 0.7500. Beyond there, unlikely today I think, could then return to the 1 Aug high of 0.7525 and then to 0.7545 (strong: 100 MMA/55 MMA) and the 27 July high (0.7557). Further out, there is little resistance to stop the Kiwi from heading on towards 0.7575 and above that there is nothing to stop it heading to 0.7740/45 (April 2015 high).

On the downside, the initial support will be seen at 0.7425 (200 WMA), below which could see a return to 0.7390 and a test of the Fibo support at 0.7383. Under there could see a return to the rising trend support, currently at 0.7345 albeit probably not today.

Preferred Strategy: Neutral – Possibly look to sell rallies, with a SL placed above 0.7500.

Resistance Support
0.7525/24 28 July high /1 Aug high 0.7425 200 WMA
0.7500 Pivot 0.7390 Session low
0.7475 2 Aug high 0.7383 (23.6% of 0.6817/0.7557)
0.7465 200 HMA 0.7360 Minor
0.7450 Session high 0.7345 Rising trend support