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

By | March 8, 2018


EURUSD: 1.2412
EurUsd has been choppy but rangebound today and after setting a new trend high, it later dipped to 1.2385 after the ADP figures provided the dollar with some support. The ECB is in focus today, No change to Monetary Policy is expected although upgraded economic and inflationary outlooks and possible removal of QE flexibility language is being eyed by traders. If the QE flexibility language is removed the Euro is likely to firm broadly against all the pairs.
1 hour/4 hour indicators: Mixed. Daily Indicators: Neutral –Turning higher? Weekly Indicators:  Possible topping formation.
Preferred Strategy:  The market looks likely to stay steady today until the ECB, with direction to be decided on the wording of the statement. The downside currently looks relatively underpinned at 1.2385, but below which will allow a move back towards 1.2350/60 and then again at the 6 Mar low at around 1.2330. On the topside, resistance will be seen at 1.2440/50 above which would head to 1.2500 and even to major resistance at 1.2600.
Resistance Support
1.2500 Minor 1.2385 Session low
1.2480 Minor 1.2360 Minor
1.2460 (76.4% of 1.2555/1.2155) 1.2327 6 Mar low
1.2442 Session high 1.2300 Minor
1.2420 Minor 1.2285 200 HMA

Economic data highlights will include:

German Factory Orders – Jan, ECB Interest Rate Decision/Press Conference/Statement, US Jobless Claims

USDJPY: 106.05
US$Jpy was choppy again on Wednesday, particularly on the news yesterday of the Cohn resignation,  but ended up pretty much where it started after a range of 105.45/106.22. Risk sentiment will again be the main driver today although the main focus for US$Jpy will be on tomorrow, when we have the BOJ Meeting and the US jobs data/ NFP.
1 hour/4 hour indicators: Turning higher. Daily Indicators: Turning higher Weekly Indicators:  Turning lower
Preferred Strategy:  While a cautious approach is required, the 4 hour momentum indicators are pointing sharply higher and I would not be surprised to see a retest of the session high and possibly the decent resistance in the 106.50/75 band, above which would allow a revisit of 107.00. A failure on the topside could see a run back below 106.00 to 105.70/85, to 106.45/50 and possibly down to the trend lows at 105.35/25. Below that there really is not a lot to hold the dollar up ahead of major Fibo support at around 103.50. In the meantime the 200 MMA, at 105.70, may prove to be decent support and while risk sentiment remains positive, I prefer to look to buy dips..

Buy US$Jpy @ 105.60. SL @ 105.20, TP @ 106.90

Buy EurJpy @ 130.80 SL @ 130.20, TP @ 132.80

Resistance Support
107.00 Minor 105.85 Minor
106.75 (61.8% of 107.67/105.24) 105.70 200 MMA
106.57 Daily Tenkan 105.45 Session low
106.45 (50% of 107.67/105.24)/6 Mar high 105.24/35 2 Mar low /5 Mar low
106.21 Session high 105.00 Minor

Economic data highlights will include:

Japan Q4 GDP, Foreign Bond/Stocks Investment, Trade Balance, Current Account, Eco Watchers Survey

GBPUSD: 1.3901
Cable was choppy but ended up unchanged on the day although it briefly made a new 14 week low against the Euro due to ongoing Brexit headlines weighing on sentiment.
1 hour/4 hour indicators: Turning higher? Daily Indicators:  Turning Neutral. Weekly Indicators:  Possible topping formation.
Preferred Strategy:     As before, Cable remains very choppy, and I suspect is still best left alone, with too many factors, not least the ongoing Brexit headlines, influencing sharp market moves. The 4 hour indicators do still look very mildly positive, so a retest of 1.3915/30 may be on the cards, above which could run towards 1.3985, which should be strong if we get there. On the downside, minor support will be seen at 1.3864/40 ahead of the 6 Mar low of 1.3816. Sidelined.
Resistance Support
1.3985 (76.4% of 1.4070/1.3711)/ Descending trend resistance 1.3865 200 HMA
1.3970 Minor 1.3845 Session low
1.3950 Minor 1.3816 6 Mar low
1.3929/32 (61.8% of 1.4070/1.3711) 1.3780 Minor
1.3912 Minor 1.3766 5 Mar low

USDCHF: 0.9430
US$Chf has traded higher on Wednesday, building on its bullish-looking formation which I suspect is destined to take us to 0.9500 and possible a fair bit higher.
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 be long and to look to buy dips possibly nearer the session low of 0.9056, with a SL placed below 0.9320. On the topside, minor resistance will be seen at the session high of 0.9442, above which could see a return to last Thursday’s high at 0.9490 although unlikely today unless the Euro sees a turn lower following the ECB.
Resistance Support
0.9510 (38.2% of 1.0037/0.9186) 0.9400 Minor
0.9497 Neckline 0.9380 Minor
0.9490 1 Mar high 0.9356 Session low
0.9470 Minor 0.9345 5 Mar low
0.9442 Session high 0.9338 (50% of 0.9187/0.9490)/2 Mar low

Economic data highlights will include:

T:  Unemployment

AUDUSD: 0.7821
The Aud is trading at session highs, seemingly unworried by the threat o a trade war, and looks as though it wants to retest the week’s 0.7842 high. Today’s domestic/China Trade Balance and a speech by Julie Bishop at the UN are possible risks in Asia.
1 hour/4 hour indicators: Turning higher Daily Indicators: Turning higher Weekly Indicators:  Turning lower?
Preferred Strategy:

The short term momentum indicators  look constructive  and a run towards 0.7840/50 does look on the cards, above which could see a run towards 0.7875 and even to 0.7890/00. On the downside, support will be seen at 0.7800, at 0.7785 and at the session low of 0.7771. Under here looks doubtful and right now and buying dips under 0.7800 is preferred, with a SL placed below 0.7770.

Resistance Support
0.7893 26 Feb high 0.7800 Pivot
0.7875 (38.2% of 0.8135/0.7711) 0.7790/87 200 DMA
0.7860 Minor 0.7771 100 DMA / Session low
0.7842 6 Mar high 0.7755 6 Mar low
0.7828 Session high 0.7725 5 Mar low

Economic data highlights will include:

Trade Balance – Jan, China Trade Balance – Feb

NZDUSD: 0.7284
The Kiwi has been choppy but has recovered from a US session low of 0.7254 to close the day at 0.7290, unchanged from yesterday. Manufacturing Sales coming up.
1 hour/4 hour indicators: Neutral Daily Indicators:  Neutral Weekly Indicators:  Turning Neutral
Preferred Strategy:   The 4 hour/daily momentum indicators are mixed, so I prefer to stand aside right now although the 4 hour charts do hint at another possible test to the topside. Today will find offers at 0.7310 and at 0.7340 ahead of 22 Feb, 0.7365 high, beyond which opens 0.7400+. Bids will arrive again today at 0.7255/60 ahead of 0.7220, with the major downside target being the major Fibo level at around 0.7185, (38.2% of 0.6780/0.7438) but we have to wait and see on that. Sidelined.
Resistance Support
0.7380 Minor 0.7260/53 200 HMA /Session low
0.7365 22 Feb high 0.7220 6 Mar low
0.7340 (61.8 % of 0.7436/0.7185) 0.7202 5 Mar low
0.7310 (50% of 0.7436/0.7185)/6 Mar high 0.7185 1 Mar low
0.7300 Session high 0.7176 8 Feb low/200 DMA

Economic data highlights will include:                                                                                                                                    

Manufacturing Sales (Q4)