20 Feb: Weekly Outlook; FX Crosses

By | February 20, 2017
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EURJPY: 119.78

EurJpy fell heavily at the end of last week, from a Friday high of 121.09 to a low of 119.70, finishing below 120.00. The 4 hour/daily momentum indicators appear to suggest that further losses lie ahead although decent support lies at the 100 DMA and previous low at at around 119.30. A break of this would allow a deeper decline, possibly to the 5 December spike low at 118.70 and eventually to the 200 DMA, currently at 117.80. Selling rallies is preferred, with the initial resistance seen at 120.50 and then again at 121.00/10. Stops on shorts need to be left at around 121.50.

EURGBP: 0.8550

EurGbp is chopping around in a wide .8400/0.8600 range, with the base currently supported by the 200 DMA at 0.8460. It could be that the cross is forging a large head/shoulder formation with a neckline at 0.8325 and an objective at 0.7325 although it is difficult right now to see why Sterling should appreciate so sharply given the ongoing Brexit concerns. In the meantime the 4 hour/daily momentum indicators are neutral, so further choppy trade looks likely and for the time being trading the range covered by the 100 DMA/200 DMA (0.8638/0.8460) seems to be the plan, with a 50 point SL placed either side..

GBPAUD: 1.6172

GbpAud is trading heavily and is reaching the convergence of trend support/resistance lines suggesting a possibly break out and an acceleration, one way of the other, in the days ahead. Initial support lies at 1.6125, a break of which would allow a move to the 16 Jan low at 1.6013. On the topside, resistance will be seen at the 16 Feb high of 1.6261 and then at previous highs at 1.6400 and at 1.6483, which pretty much ties in with the descending trend resistance, and if seen should see plenty of sellers. For the time being, further 1.6120/1.6260 price action looks likely..

AUDJPY: 86.58

AudJpy reversed sharply from new trend highs on Friday, when it reached 88.15 but closed at 86.50. While the uptrend remains intact, it may have been that we have seen an interim top and we could return to the 7 Feb low of 85.23, below which could see a move to 84.50.Until 83.70 is broken though, the uptrend will remain intact, and if we do turn higher again, above the 88.15 high would allow a run up towards 89.50, above which would test the December 2015 high at 90.72. For now, trading from the short side, selling into strength, with a SL placed at 87.60 seems to be the plan, but looking for a slide towards 85.00/20 and possibly to the 84.50 target.

EURAUD: 1.3829

EurAud has been in a steady downtrend from the December 30, 1.4725 high through 2017 although we did see a bounce off last week’s lows of 1.3726 and the dailies do appear to be turning a little higher. Currently sitting at 1.3840, any advances would see plenty of offers at 1.4000/50. The weeklies are still pointing lower though, so any rallies would appear to provide an opportunity to get short, with support seen at the 1.3725 turned low, a break of which would allow an eventual run towards 1.3675 (April 2014 low) and then to 1.3465 (61.8% of 1.1611/1.6495).

AUDNZD: 1.0677

Having turned sharply higher from the late January lows, seen at around 1.0320, AudNzd is now capped just below 1.0700 resistance (100 WMA) but a break of which would allow a run to last October’s high at 1.0765 and then to the 200 WMA at 1.0875 and the major descending trend resistance, currently at 1.0930. With the momentum indicators generally looking supportive, buying dips seems to be the plan, with a SL placed at 1.0550.