8 Aug: Forecast: FX: US$/Majors

By | August 8, 2017


EURUSD: 1.1794
24 Hour: Neutral – Possibly sell short term strength Medium Term: Mildly Bearish
A tight range has seen the Euro use 1.1800 as a pivot on Monday, with much the same likely again on Tuesday, leaving the outlook unchanged.

The short term charts have now unwound their oversold condition and another rangebound session may be in store, with little data due today, and with traders looking towards Friday’s US inflation figure for guidance. The daily charts still hint that further downside pressure may be placed on the Euro and if so, below the session low (1.1768,) and the minor double bottom at 1.1722, would allow a run back towards the 28 July low of 1.1670. Under there would see a test of the rising trend support, currently at 1.1620 and possibly on towards 1.1600 although not yet.

The topside also looks a little limited on Tuesday although the short term momentum indicators are now fairly neutral. Above the session high, points of resistance would be seen at minor Fibo levels, coming ahead of Friday’s high of 1.1882 and the trend high at 1.1909. Back above 1.0910, 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) although this seems the less likely direction in the next day or two.

Preferred Strategy: Mildly Bearish. Selling short term strength, but looking for a run, eventually,  towards 1.1650/1.1700 seems to be the plan. SL above 1.1885 today. It could end up being a similar session to Monday, so possibly not looking for too much either way.

Resistance Support
1.1882 Friday high 1.1768 Session low
1.1865 (76.4% of 1.1909/1.1727) 1.1727/22 Friday low /31 July low/(23.6% of 1.1140/1.1909)
1.1840 (61.8% of 1.1909/1.1727) 1.1685 Minor
1.1813 Session high 1.1650 Minor
1.1785 200 WMA 1.1620 Rising trend support

Economic data highlights will include:

German Trade Balance, Current Account (Jun), US NFIB Business Optimism Index, API Weekly Crude Oil Stock Inventory

USDJPY: 110.74
24 Hour: Prefer to buy dips Medium Term: Neutral
US$Jpy has had a rangebound session (110.64/91) leaving the outlook unchanged.

While the short term momentum indicators are now pretty flat, the daily indicators appear slightly more positive, although we really need a daily close above 111.05 in order to gain enthusiasm for further upside progress. Beyond there would run into resistance at the 200 WMA at 111.25 and then at 111.40 (100 DMA). These should combine to slow further gains today – if we get there -, 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.

On the downside, back below 110.50/60, the dollar will find bids at minor levels down towards 110.00, below which could revisit 109.85 although not today, I think. If wrong, below 109.95 could test 109.65 and further out, below there could eventually see a run towards 109.25 and even to 108.80 (Weekly Cloud Base).

Preferred Strategy: Buy dips or a break of 111.05.

Resistance Support
111.70 27 July high 110.63 Session low
111.60 (38.2% of 114.50/110.83) 110.20 Minor
111.25 200 WMA 110.00 Minor
111.05 Friday high/Daily Tenkan 109.85/83 3 Aug low /Friday low
110.91 Session high 109.65 (76.4% of 108.12/114.50)

Economic data highlights will include:

Trade Balance, Current Account, Eco Watchers Survey

GBPUSD: 1.3033
24 Hour: Mildly Bearish –Prefer to sell rallies Medium Term: Prefer to sell rallies
Cable remains under pressure on Tuesday, trading down to 1.3013, before settling at 1.3030.

The momentum indicators are still looking heavy, and below 1.3000 would only find minor levels of support until 1.2925, below which could easily head towards 1.2850, albeit probably not yet.

On the topside, back above the session high of 1.3058 would find resistance at various minor levels towards 1.3100 and above. If we do get back towards 1.3100, which is possible given that the hourlies are now looking mildly positive, it would present a good sell opportunity, with a SL placed above 1.3150

Preferred Strategy: Bearish- Prefer to sell rallies

Resistance Support
1.3163 Friday high 1.3013 Session low
1.3135 200 HMA 1.3005 (38.2% of 1.2588/1.3267)
1.3110 Minor 1.2975 Minor
1.3095 Minor 1.2927 (50% of 1.2588/1.3267)
1.3058 Session high 1.2900 Minor

Economic data highlights will include:

NIESR GDP Estimate (3mth- July)

USDCHF: 0.9726
24 Hour: Prefer to buy dips Medium Term: Mildly Bullish
US$Chf has had a rangebound session (0.9710/45), leaving the outlook unchanged.

On the topside, 0.9765 will continue to provide decent resistance ahead of 0.9790 and then 0.9805/10. Above there would open up the next Fibo level at 0.9848, above which could then head to the 100 WMA at 0.9870.

On the downside, minor support lies at 0.9700/10 and at 0.9685 ahead of Friday’s low at 0.9670. Further out, last week’s lows at 0.9630 comes into view ahead of the 100 MMA (0.9600), which should be decent support if we see it.

Preferred Strategy:  Mildly Bullish. Look to buy dips at 0.9700, looking for a topside break of 0.9765. SL sub 0.9670. Possibly another tight session today.

Resistance Support
0.9848 (61.8% pivot of 1.0100/0.9437) 0.9710 Session low
0.9807 30 May high/100 DMA 0.9685 (23.6% of 0.9437/0.9763)
0.9790 100 DMA 0.9670 Friday low
0.9763/65 Friday high/(50% pivot of 1.0100/0.9437) 0.9640 (38.2% of 0.9437/0.9763)
0.9745 Session high 0.9630 1 Aug low

AUDUSD: 0.7911
24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish.
The Aud squeezed up to 0.7948, in thin Australian-holiday conditions, before easing back to an eventual low of 0.7898 in US trade, before finishing at 0.7910. It could be another reasonably rangebound session today although we may see something directional following the release of the NAB Business Conditions/Confidence and the China Trade Balance (exp; $46.10 bio Exports +10.9%, Imports +16.6%).

While the short term indicators are mixed, and reasonably neutral, the dailies are warning the longs and if we get below 0.7890/00 we could then see a move to 0.7875, which should be strong support if/when we get there, but below which opens 0.7850, 0.7835 and 0.7820..

On the topside, 0.7945/50 will again see sellers ahead of Friday’s high of 0.7980, and 0.8000. I don’t think we go close to this today, but if wrong, above 0.8000 could then see a return to last 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.

Preferred Strategy: The dailies are looking increasingly toppish, so once again, trading from the short side, selling rallies, with a SL above 0.0.7985 could be a plan.

Resistance Support
0.8000 200 WMA 0.7898 Session low
0.7985 200 MMA 0.7890 Friday low/(23.6% of 0.7328/0.8065)
0.7979 Friday high 0.7874 21 July low /26 July low
0.7965 200 HMA 0.7850 Minor
0.7948 Session high 0.7835 Minor

Economic data highlights will include:

NAB Business Conditions/Confidence, China Trade Balance

NZDUSD: 0.7361
24 Hour: Mildly Bearish Medium Term: Mildly Bearish
The inflation survey undermined the Kiwi yesterday, sending it from a high of 0.7416 to a low, so far, of 0.7347 before closing almost on the lows.

The 4 hour/daily momentum indicators are both pointing increasingly lower now and suggest that further near-term losses lie ahead, but having said that, the weekly/monthly charts still look positive and still suggest that further medium term gains may lie ahead.

A break of the 0.7347 low would see minor bids at 0.7330/35, below which could head quickly to 0.7300 and then to 0.7270, albeit probably not today.

On the topside, minor resistance will be seen at 0.7370 and at 0.7385 ahead of 0.7400. Above here looks unlikely but if wrong, the session high of 0.7416 would see sellers ahead of 0.7425.

Preferred Strategy: Look to sell rallies, with a SL placed above 0.7400..

The RBNZ meeting is coming up on Thursday. No change expected but the RBNZ are likely to talk the Kiwi down.

Resistance Support
0.7425 200 WMA 0.7347 Session low
0.7416 Session high 0.7333 20 July low
0.7400 Minor 0.7300 Minor
0.7385 Minor 0.7274 (38.2% of 0.6817/0.7557)
0.7370 Minor 0.7262 18 July low