10 Aug: Forecast: FX: US$/Majors: FXCharts

On the downside, back below 1.1700 and the session low of 1.2688 would allow a move 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, and the short term momentum indicators actually look slightly more supportive today.

The topside also looks a little limited on Thursday, and 1.1760/70 will still offer decent resistance but above which could see a run back to 1.1800 ahead of the 8 Aug high of 1.1823. If we do head higher, which seems unlikely given the negative look of the daily charts, further points of resistance would be seen at minor Fibo levels, ahead of the 4 Aug 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 1.1620/1.1650 seems to be the plan. SL above 1.1815 today. It could end up being a rangebound session in the absence of any major data, with Donald Trump’s Twitter account likely to provide any guidance.

On the topside, minor resistance will arrive in the 110.35/50 area, beyond which, there is scope to head back to 110.70 and possibly to 111.00. A close above 111.05 would ease concerns on the downside and would then allow a move towards resistance at the 200 WMA at 111.25 and then to 111.40 (100 DMA). These seem over the horizon right now 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 the session low should find decent bids at the rising trend support  at 109.30, a break of which could quickly run to 109.00  and even to 108.80 (Weekly Cloud Base), and if the stock markets see a sharp reversal lower, we could see the US$Jpy move down in tandem as risk aversion builds.

Preferred Strategy: Neutral.

The short term momentum indicators actually look a little more constructive, and on the topside, back above the session high of 1.3027 could revisit the 8 Aug  high at 1.3052  and then on to 1.3070, above which look for a run back towards 1.3100

Preferred Strategy: Still prefer to sell rallies for the medium term downtrend although the intraday charts hint that we may see a short term squeeze to the topside. The UK Industrial Production figures are due today.

On the topside, resistance will be seen at 0.9670 ahead of 0.9700 although it seems unlikely that we head back above here for a while. If wrong, look for an eventual squeeze back towards the 0.9772 session high.

Preferred Strategy:  Neutral

On the topside, 0.7900 will again see sellers ahead of 0.7915, a break of which could then see a quick run back towards 0.7940/45.  This seems less likely, but if it happens it would negate the head/shoulders theory and could see a larger short-squeeze back towards 0.7980.

Preferred Strategy: The dailies are looking increasingly negative; so once again, trading from the short side, selling rallies, with a SL above 0.7955 could be a plan for Thursday.

A cautious stance is therefore required, and on the downside, support will again be seen at 0.7300/10.  Below there could then head to 0.7260/70, albeit probably not today.

On the topside, the initial resistance will be seen at 0.7370 and then at 0.7385 ahead of 0.7400. Above here looks unlikely today but if wrong, the 7 Aug high of 0.7416 would see sellers ahead of 0.7425.

Preferred Strategy: Look to sell rallies, with a SL placed above 0.7385. .