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

On the downside, having taken out the May 2016 high of 1.1616, this is currently acting as near term support. A break of 1.1600 could then see a run back towards 1.1560/80 and possibly to 1.1500. Further out, last Thursday’s low was at 1.1478 and if/when we break under this we could then see a return to Monday’s low of 1.1435.

In the meantime look for 1.1600 to hold the Euro up although I don’t think we see too much of a directional move today unless US politics intervenes once again.

With the 4 hour/daily momentum indicators both pointing lower on Monday further losses would seem likely , and a break of 111.00 would allow a fairly quick move towards 110.50/60 and then to 110.15.

On the topside, resistance will be seen at 110.40/50 ahead of the stronger area between 110.70/90 and it does not look like we are going to see 112.00 again early in the week, at least ahead of the BOJ Minutes and possible ahead of the FOMC.

On the downside, below last week’s low of 1.2933 would find support at the Fibo level at 1.2920, below which could then see a move towards 1.2850 (38.2% of 1.2589/1.3125) although this remains some way off.

On the topside, back above 1.3030 would find further offers at 1.3050/60. Beyond that, 1.3100 would see good sellers once again ahead of 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.

On the topside, minor resistance will be seen at 0.9485 ahead of 0.9520. Above here looks unlikely today but the 200 WMA at 0.9550 would provide a formidable hurdle.

The short term momentum indicators look less positive, and if we do head lower today then below 0.7900 the initial support will arrive at Friday’s low, ahead of the chance of a drop to 0.7830 and possibly back to 0.7800 although this looks unlikely at this stage.

On the topside, resistance will be seen at 0.7935 (minor) and then at 0.7955/60 above which could see a move back to the 0.7988 trend high. Above here could then see a run towards 0.8000 and then to 0.8015 although I don’t think we are going there today.

The momentum indicators look positive, and having closed above the 200 WMA for the first time since September 2014 further gains look possible, although 0.7485 will be a formidable hurdle. Beyond here though there is little to stop the Kiwi heading on towards 0.7550 and possibly even to 0.7740/45 (April 2015 high).

The downside seems well protected right now although the short term momentum indicators are at overbought extremes, with support coming in, below the 200 WMA at around 0.7400 and then again at 0.7370. Under there could see a return towards 0.7335 although this seems unlikely at this stage.