19 May: Forecast: FX: US$/Majors

EURUSD: 1.1098

The Euro is a bit lower today as the dollar attempts a partial recovery but it is still above 1.1100 and a choppy session may be in store given the lack of data to drive direction.

Above today’s session high of 1.1171, if we get there, further medium term gains look possible, with 1.1210 being the first real resistance, but above which there is little to stop it heading back to 1.1300.

In the short term though, the 4 hour momentum indicators are turning lower after having reached overbought extremes, so I would be surprised to take out 1.1170 today and further consolidation/correction would seem probable. If so, minor support will be seen at the session low of 1.1075, below which, could see a run back towards 1.1040 and 1.1025 although I doubt that we head down here today.

24 Hour: Prefer to sell rallies  – Possible range trade Medium Term: Mildly Bullish
                                          Resistance Support
1.1210 (23.6% of 1.3993/1.0340) 1.1075 Session low
1.1190 Minor 1.1055 100 HMA
1.1172 Session high 1.1043 (38.2% of 1.0838/1.1170)
1.1150 Minor 1.1025 (23.6% of 1.0586/1.1170)
1.1125 Minor 1.1000 Minor

Economic data highlights will include:

German PPI, EU Current Account, Consumer Confidence, Baker Hughes Oil Rig Count

USDJPY: 111.56

US$Jpy had a choppy day in falling to a new trend low of 110.23 before climbing steadily to reach a high of 111.73 and then closing at 111.50.

While the dailies still point lower, the 4 hour charts are recovering after having become oversold and further short term gains would not surprise. If so, look for good resistance in the 111.70/80 range, but a break of which could then see a move towards 112.00 and 112.30, which might be a decent sell area if we get there.

On the downside, minor support will be seen at 111.00 and 110.70 ahead of the session low of 110.23. A break of which would then find little support until we reach 109.60, albeit not today. A choppy session in the 111.00/112.00 would not surprise.

24 Hour: Prefer to buy dips Medium Term: Prefer to sell rallies
                                         Resistance Support
112.50 Minor 111.00 Minor
112.30 (50% of 114.36/110.23) 110.70 Minor
112.00 Minor 110.23 17 May low
111.81 (38.2% of 114.36/110.23) 109.85 Minor
111.73 17 May high 109.60 (76.4% of 108.12/114.36)/200 DMA

GBPUSD: 1.2938

Cable spiked up to 1.3047 after the better than expected retail sales figures but then collapsed to a low of 1.1288 before a recovery, to finish the day at 1.2940.

The momentum indicators remain mixed and we may be in for further choppy trade in the coming session. Another break of 1.3000 would re-open the way to the 1.3047 high, above which would find strong offers at 1.3075 and then further out, to where the longer descending term trend resistance currently lies, at around 1.3135.

On the downside, 1.2890/00 will continue to act as support ahead of the 16 May low of 1.2865. Back below here could then see a move back to the 12 May low of 1.2844, to 1.2830 (4 May low) and possibly to 1.2800/10.

A neutral stance seems wise today.

24 Hour: Neutral Medium Term:  Neutral
                                         Resistance           Support
1.3135 Descending trend resistance 1.2900 Minor
1.3075 (23.6% of 1.7191/1.1821) 1.2888 Session low
1.3047 Session high 1.2864 16 May low
1.3000 Weekly cloud base 1.2844 12 May low
1.2980 Minor 1.2830 4 May low/(23.6% of 1.2108/1.3047)

USDCHF: 0.9802

US$Chf had a choppy session, falling to 0.9758 before a bounce to 0.9825 and then closing at 0.9800.

The daily momentum indicators are still pointing sharply lower while the short term charts, having become oversold, are attempting to turn higher so further short term consolidation may be needed.  If we do head lower, then below the 0.9758 session low, there is then little support to be seen until we reach 0.9735 and 0.9705. A break of the rising trend support would then open the way to 0.9600/40 although that remains some way off.

On the topside, the initial resistance will come in at 0.9825, above which could see a run back to 0.9840 and then to 0.9885 and even towards 0.9825 although this seems unlikely today.

A choppy session seems possible, with the chance of a minor squeeze to the topside.

24 Hour: Prefer to buy dips Medium Term: Mildly Bearish
                                         Resistance Support
0.9928 (50% of 1.0100/0.9758) 0.9758 17 May low
0.9900 Minor 0.9735 (76.4% of 0.9549/1.0343)
0.9885 (38.2% of 1.0100/0.9758) 0.9705 Rising trend support
0.9840 (23.6% of 1.0100/0.9758) 0.9675 Minor
0.9824 Minor 0.9640 Minor

AUDUSD: 0.7417

The Aud eventually made it up to 0.7466 after yesterday’s good jobs data but then headed steadily lower through the session, closing towards the lows of 0.7407.

Technically, the 1 and 4 hour charts look slightly negative on Friday, while the dailies still look mildly constructive and in the absence of any data it looks like being a choppy session near current levels.

If we do head higher we could see another test of minor resistance at 0.7440, beyond which could head on to 0.7465/70 where the minor descending trend resistance lies. Beyond there would open the way to the Fibo level at close to 0.7500 although probably not today.

On the downside, minor support is seen at 0.7395/0.7400 and at the recent lows at 0.7384/88. Below this would open the way to the 12 May low of 0.7366 and 0.7350 (minor), ahead of the stronger 0.7330 level. Back below the 9 May low of 0.7328 would find little to hold the Aud up until 0.7300 and the rising trend support, at 0.7285, although this seems unlikely to be seen for a while.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance                                         Support
0.7525 Minor 0.7407 Session low
0.7502 (76.4% of 0.7555/0.7328) 0.7388/84 17 May low/15 May low
0.7490 Descending trend resistance 0.7366 12 May low
0.7468/66 (61.8% of 0.7555/0.7328)/Session high 0.7330/28 (50% pivot of 0..6826/0.7835)/ 9 May low
0.7440 Minor 0.7298 (76.4% of 0.7160/0.7750)

NZDUSD: 0.6899

As with the Aud, the short-term Kiwi charts look slightly negative on Friday, while the dailies still look mildly constructive, and in the absence of any major data it looks like being a choppy session near current levels.

On the topside, resistance will be seen at the session high of 0.6949. Beyond 0.6950, there is reasonable resistance ahead of 0.6970, but a break of which could quickly see a return to 0.7000 and then possibly to the 100 DMA, at 0.7048.

On the downside, 0.6900 may continue to act as a pivot ahead of the 100 WMA at 0.6870 and the previous lows of 0.6862 and 0.6851. Under there, the next support will arrive at 12 May’s low of 0.6826, although that looks fairly safe right now.

For the time being, given the series of higher daily lows since May 11, buying dips does appear to be the near term plan, but keep stops tight under 0.6850.

24 Hour: Prefer to sell rallies Medium Term: Neutral
Resistance Support
0.6998 (76.4% of 0.7052/0.6817) 0.6886 Session low
0.6968 3 May high 0.6870 100 WMA
0.6960 (61.8% of 0.7052/0.6817) /55 DMA 0.6851 15 May low
0.6944/49 17 May high /Session high 0.6826 12 May low
0.6925 Minor 0.6805 (50% pivot of 0.6125/0.7485)

Economic data highlights will include:

NZ Visitor Arrivals

By | May 19, 2017
Source: FXCharts

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