20 July: Forecast: FX: US$/Majors: FXCharts

EURUSD: 1.1513
24 Hour Outlook: Prefer to buy dips Medium Term: Prefer to buy dips.
Preferred 24-hour Strategy: It all looks set to be rather choppy, but with the longer term momentum indicators still looking positive, buying dips would seem to be the plan. Wait for Draghi but possibly looking to buy at around the minor rising trend support at 1.1335/40 may be a plan – if we see it.The dollar is slightly stronger against the Euro, within a limited range, as traders stand aside ahead of today’s ECB meeting. The market not really expecting a major indication of ECB policy change although some hints to the timing are possible but Mario Draghi will not give too much away for fear of sending the Euro sharply higher.On the topside, the initial resistance levels comes at the week’s highs at 1.1555 (Wed) and at 1.1582 (Tue) above which could then head towards the May 2016 high of 1.1616. Beyond this there is little to stop the Euro heading on to the August 2015 spike high of 1.1713 although Draghi will need to be very explicit in his intentions to see it anywhere close and this is highly unlikely to happen.

The short term charts continue to correct, after having become overbought, and if the dollar does recover we can expect to see buyers at 1.1500 and again at the 18 July low of 1.1470. Under there could then see a return to Monday’s low of 1.1435, to Friday’s  low  (1.1390) and the 13 July low of 1.1370, below which could then run towards 1.1345/50 and then to 1.1310/15.


Resistance Support
1.1675 Minor 1.1509 Session low
1.1616 2 May 16 high 1.1470 18 July low /(23.6% of 1.1126/1.1582)
1.1600 Psychological 1.1434 17 July low/Rising trend support
1.1582 18 July high 1.1405 (38.2% of 1.1126/1.1582)
1.1555 Session high 1.1390 14 July low

Economic data highlights will include:

EU Current Account, ECB Meeting/Interest Rate Decision/Press Conference/Statement, US Jobless Claims, Philadelphia Fed Mfg Survey

USDJPY: 111.90
24 Hour Outlook: Prefer to buy dips Medium Term: Neutral -Look to buy dips @ 111.20/50
Preferred 24-hour Strategy: Stay square for now and wait for the BOJ. A dovish outlook could see the dollar turn higher as the Yen comes under pressure so I prefer to buy dips, with a SL placed under 111.00.US$Jpy has been heavy for much of Wednesday, partly under pressure from a sell-off in EurJpy, and fell to a low of 111.54, since when a minor bounce to 111.80 has taken it into the NY close. We now await the BOJ meeting, with policy expected to remain steady although the CPI forecast is expected to be cut and the 2% target date pushed back, which should help the dollar to a degree.The short term momentum indicators are now looking a little more constructive and the session low at 111.54 may well hold the dollar up again but below which, the monthly cloud top is rising sharply and currently lies at 111.30, and should also see strong bids. Below here though could then see a run to 111.00 and to 110.65.

On the topside, the daily charts are pointing still pointing lower, but if we do see a near term bounce, then once back above 112.00, 112.25/30 and 112.65/70 will provide the initial resistance. If we get back above the 17 July high of 112.85 minor offers will arrive at various points (113.00/25) ahead of  14 July’s high at 113.57.

Resistance Support
113.00 (50% of 114.50/112.54) 111.72 100 DMA/200 DMA
112.85 17 July high 111.54 Session low
112.67 (38.2% of 114.50/112.54) 111.30/25 (50% of 108.12/114.49)/200 WMA
112.25 (23.6% of 114.50/112.54) 110.98 (61.8% of 108.80/114.49)
112.00 Pivot 110.64 16 June low

Economic data highlights will include:

BOJ Meeting/Interest Rate Decision/Press Conference/Statement, Foreign Bond/Stocks Investment

GBPUSD: 1.3018
24 Hour Outlook: Neutral Medium Term: Prefer to buy dips
Preferred 24-hour Strategy: NeutralCable traded a tight 1.3010/52 range on Wednesday leaving the outlook unchanged.The momentum indicators are a mixed again on Thursday and a cautious stance is required. Still sitting close to  the previous pivot of 1.3045, we could chop around here today, at least until the ECB Meeting when EurGbp will drive any directional move. The UK Retail Sales are also due and will create some waves.

On the downside, the session low of 1.3010 and the 18 July low of 1.3004 will provide the initial support, but a break of 1.3000 could have us quickly back 1.2980, below whish could then head to the 14 July’s low of 1.2933 although this seems unlikely today.

On the topside, back above 1.3100 would see good sellers once again at 1.3115/25, but above which there is little to stop Cable heading on towards 1.3200 and then to 1.3280. Above there would be increasingly bullish, possibly opening up the major Fibo pivot at 1.3420 (50% pivot of 1.5017/1.1821) although this currently remains over the horizon.

Resistance Support
1.3200 Minor 1.3004 18 July low
1.3150 Minor 1.2980 Minor
1.3125 18 July high 1.2950 200 HMA
1.3100 Minor 1.2920 (38.2% of 1.2589/1.3125)
1.3052 Session high 1.2900 Minor

Economic data highlights will include:

Retail Sales

USDCHF: 0.9554
24 Hour Outlook: Neutral Medium Term: Prefer to sell rallies
Preferred 24-hour Strategy: Neutral. Wait for the ECB.US$Chf has had a tight range of 0.9529/60, leaving the outlook unchanged.Currently sitting close to the 200 WMA after having recovered from the session low, the short term momentum indicators are mixed although the overall outlook remains for further dollar weakness in the days ahead.  If so, below the 18 July low of 0.9523 could see a run to 0.9500 and potentially a fair bit lower, where the first real support is seen at the May 2016 low at 0.9442.

On the topside, 0.9590/0.9600 will see sellers, above which could return to the 18 July high of 0.9634 although this seems rather doubtful. If wrong, above here could see a return to the 0.9675/85 minor resistance beyond which would revisit Friday’s high of 0.9700.

Resistance Support
0.9634 18 July high 0.9523 18 July low
0.9600 Minor 0.9500 Minor
0.9580 Minor 0.9475 Minor
0.9560 Session high 0.9442 3 May 2016 low
0.9555 200 WMA 0.7400 Minor

AUDUSD: 0.7950
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: The longer term momentum indicators are pointing increasingly higher and a run to 0.8000 looks likely although the RBA will not like the Aud up here. I hesitate to buy it, but don’t stand in the way and try to sell it. Stand aside until the Australian unemployment figures. These have been quite solid recently and another good number is expected today. We may also see some volatility through the crosses after the BOJ/ECB statements.The Aud has seen a slow grind higher on Wednesday, reaching 0.7960 where it has been stalled by some selling of AudJpy.The 4 hour indicators remain at overbought extremes, but not wanting to stand in the way of a moving train, further gains could easily see a run towards 0.7975 and then to 0.8015.

Minor support now arrives at 0.7900/10 and then again at 0.7875 and at 0.7840 although it seems unlikely to be seen down here today.

Resistance Support
0.8040 Minor 0.7908 Session low
0.8015 200 WMA 0.7875 Minor
0.8000 Psychological 0.7840 Minor
0.7975 200 MMA 0.7796 (23.6% of 0.7328/0.7942)
0.7958 Session high 0.7785 18 July low

Economic data highlights will include:                                      

NAB Business Conditions/Confidence (Q2), Unemployment

NZDUSD: 0.7355
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: NeutralThe Kiwi has been dragged higher by the Aud and is now at levels last seen in November, having reached 0.7387 today.The short term momentum indicators do suggest caution on the topside,  although the dailies remain mildly constructive and we could yet see move beyond the day’s high and on towards 0.7400. Beyond there would then allow a run back to the September high of 0.7485 although it is too early to look at this.

On the downside the initial support lies at the session low of 0.7340, ahead of 0.7315 and 0.7300. Below there could then re-open the way to 0.7260 and eventually to the 13 July low of 0.7245.

                                         Resistance             Support
0.7485 7 Sept high 0.7340 Session low
0.7450 Minor 0.7315 100 HMA
0.7435 Minor 0.7300 200 HMA
0.7402 8 Nov high 0.7262 18 July low
0.7387 Session high 0.7252 (23.6% of 0.6815/0.7387)

By | July 20, 2017
Source: FXCharts

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