12 Oct: Forecast: FX: US$/Majors: FXCharts

EURUSD: 1.1863
Preferred Strategy:  The US$ remains under pressure following the FOMC Minutes, with the next directional move likely to come via tomorrow’s CPI figure. In the meantime, the momentum indicators are looking quite positive for the Euro, with the dailies are now pointing a little higher, suggesting that the downside will again be rather limited today. The neckline of the head/shoulder is at 1.1870, and we do not really want to head any higher for it to remain valid or there will be strong dollar liquidation which would see the Euro head towards 1.1900/1.2000. The downside currently looks underpinned at around 1.1800 although I would be surprised to see it trade down there again today. Overall, another range trade may be the plan for Thursday (1.1800/1.1900), but a daily close above 1.1870 would suggest that we are in for further dollar weakness in the days ahead. Taking a punt on the Head/Shoulder formation remaining intact: Sell EurUsd @ 1.1870. SL @ 1.1905, TP @ 1.1770
24 Hour: Neutral Medium Term: Neutral
Resistance Support
1.1930 (61.8% of 1.2092/1.1669) 1.1840 Minor
1.1920 Descending trend resistance 1.1825 Minor
1.1900 Minor 1.1795 Session low
1.1882 (50% of 1.2092/1.1669) 1.1760 200 HMA
1.1867/70 Session high /Neckline resistance 1.1738 10 Oct low

Economic data highlights will include:

EU Industrial Production, US PPI, Monthly Budget Statement, Jobless Claims, EIA Crude Oil Stocks Weekly Change , ECB Speakers; Praet, Draghi, Coeure & Lautenschlager

USDJPY: 112.49
Preferred Strategy:  The dollar remains rangebound within 112.00/113.00, (112.07/112.58), and similar conditions appear set to continue. As before, I think the dollar will eventually head higher, so buying dips is preferred although for the time being another tight range could be in store while waiting on tomorrow’s US CPI figure.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
113.55 Minor 112.07 Session low
113.43 6 Oct high 111.98/112.00 10 Oct low/(23.6% of 107.31/113.43)
113.20 Minor 111.80 Minor
113.00 Minor 111.65 Minor
112.74 9 Oct high 111.46 25 Sept low

GBPUSD: 1.3224
Preferred Strategy:  Cable has had another solid session, underpinned  by the softer US$ and closing the day near the highs of 1.3234 The charts remain mixed, so a neutral stance is required but overall, with the dailies still looking heavy, selling into near term strength may be the plan. In the meantime, the 4 hour charts are picking up a positive mood, so a near term moves towards 1.3260/90 would not surprise.
24 Hour: Neutral Medium Term: Prefer to sell rallies
Resistance Support
1.3340 (50% of 1.3656/1.3026) 1.3175 Session low
1.3292 4 Oct high 1.3145 100 HMA
1.3265 (38.2% of 1.3656/1.3026) 1.3130 10 Oct low
1.3250 Minor 1.3100 Minor
1.3235 Session high 1.3075 9 Oct low

Economic data highlights will include:

T:  BOE Credit Conditions Survey

USDCHF: 0.9731
Preferred Strategy:  Having broken down through the previous rising trend support, US$Chf remains heavy and has traded down to 0.9716, with little bounce heading into the US close. The dailies appear to have run out of steam on the topside, and with the 4 hour charts looking heavy a retest of the lows and possibly 0.9700 would not really surprise today. In the medium term I still like the dollar higher though, looking for a return towards 0.9800 and eventually for a run towards parity although it will take a decent US CPI figure tomorrow to see us make any headway. A close above the 200-DMA (0.9850) would help extend the uptrend – patience may be required! Neutral.
24 Hour: Neutral Medium Term: Prefer to buy dips
Resistance Support
0.9850 200 WMA 0.9716 Session low
0.9835 200 DMA/(61.8% of 1.0099/0.9420) /6 Oct high 0.9710 4 Oct low
0.9807 9 Oct high 0.9685 Minor
0.9789 10 Oct high 0.9676 2 Oct low (38.2% of 0.9420/0.9836) /
0.97766 Session high 0.9642 25 Sept low

AUDUSD: 0.7789
Preferred Strategy:  The Aud reached a high of 0.7808 on Wednesday but is now back below 0.7800 and appears set to remain rangebound again today although the local data may cause some minor volatility (Home Loan/Consumer Confidence). The short term momentum indicators are mildly positive, but with the dailies still pointing lower, selling rallies still appears to be the plan.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
0.7872 (38.2% of 0.8102/0.7732) 0.7770 Session low
0.7850 Minor 0.7749/47 10 Oct low /9 Oct low
0.7830 200 HMA 0.7732 6 Oct low
0.7815 Descending trend resistance/(23.6% of 0.8102/0.7732) 0.7725 (50% pivot of 0.7328/0.8125)
0.7808/05 Session high /200 HMA 0.7700 Minor

Economic data highlights will include:

WBC Consumer Confidence, Home Loans, Investment Lending for Homes, China Foreign Direct Investment

NZDUSD: 0.7084
Preferred Strategy:  The Kiwi remains heavy but is holding on above its trend lows while waiting on a result from the political uncertainty following the recent election, and until that occurs (today?) it is likely to remain under pressure. A neutral stance is currently wise although, with a political alliance between the NZ1st / National parties could see a quick squeeze higher. A labour coalition would send the Kiwi sharply lower.
24 Hour: Neutral Medium Term: Neutral
Resistance Support
0.7180 Minor 0.7070 Minor
0.7165 5 Oct high 0.7055 10 Oct low
0.7145 (23.6% of 0.7434/0.7058) 0.7035 Minor
0.7118 6 Oct high 0.7010 Minor
0.7098 Session high 0.6990 (76.4% of 0.6817/0.7528)

Economic data highlights will include:

T:  Food Price Index,

By | October 12, 2017
Source: FXCharts

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