18 Apr: Forecast: FX: US$/Majors + trade ideas: FXCharts

On As before, I remain fairly neutral while this choppy trade persists, but given the speculative long Euro positioning, I still mildly prefer the downside in the medium term and would look to sell rallies towards the top end of the current range. Right now it seems that we are likely to just chop around within the existing range- Something like 1.21/1.25 – but going nowhere fast. US Retail Sales  in focus today

On the downside, buyers will be seen at current levels towards the session low at 106.87, ahead of good support at 106.55/65, below which could see a reverse towards 106.20, 106.00, and possibly towards the 3 April low of 105.68 although this seems unlikely right now.

As before, if stocks turn sharply lower again, probably taking US$Jpy along for the ride despite the currently positive medium term indicators, a move back below the 200 MMA (105.60) would open the way to 105.30, a break of which would allow a return to 104.60. Below that, there is little to support the dollar until 103.50 – This currently looks well beyond the horizon, and overall, while the dailies remain positive, I prefer to be trading from the long side and looking to buy dips.

Buy US$Jpy @ 106.70. SL @ 106.30, TP @ 107.70

Overall, while I mildly prefer the topside in the days ahead – given the outlook on the daily charts – I suspect some choppy trade today may see a dip to the downside, and would look to buy Sterling sub 1.4200 for another test of 1.4300, and above.

On a more cautious mote, it could be that the daily charts are now showing some bearish divergence, hinting that a medium term top may already be in place and I do not think we are going back above 1.4375 today, so for a day trade, I would look to sell a rally towards 1.4350 with a SL at 1.4380.

Otherwise, I prefer to trade Cable through the cross, so:

Sell EurGbp @ 0.8690. SL @ 0.8715, TP @ 0.8590

Sell GbpUsd @ 1.4350. SL @ 1.4380, TP @ 1.4250

The longer term momentum indicators still look pretty much neutral but may be picking up speed, and if we do see a turn higher, then the 200 WMA/Weekly cloud base  (0.9690/95) will provide resistance, but above 0.9700 would open 0.9715 and then 0.9760.

If we head back below 0.7760, bids would arrive at 0.7750/45, with further support seen at 0.7735 and 0.7720, below which could revisit 0.7705/95 (10 April low – 0.7693) although this currently seems unlikely. Further out, the Aud has found a medium term base in the 0.7645/50 range (9 April low – 0.7651), and this needs to be taken out in order to allow further downside progress towards the next major level, at 100 WMA (0.7625). Below this would then move towards the major rising trend support from January 2016, at 0.7590, although that may take a while.

On the other hand, if the Kiwi does continue its run higher, the initial resistance will arrive at around 0.7375 ahead of the 13 Apr high of 0.7395. I don’t think we head back up here today, but if wrong look for a run to 0.7400/10, above which could eventually see a run towards the 16 Feb high at 0.7436, albeit doubtful.