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

EURUSD: 1.1663
24 Hour: Neutral. Range trade Medium Term: Mildly Bullish
Preferred Strategy: Further choppy trade may be the name of the game on Monday although the PMIs may provide something more directional. Overall, a rangebound session within the 1.1620/1.1715 area looks the most likely outcome and we may struggle to see 1.1700.On the topside, above Friday’s high could see a run towards the August 2015 spike high of 1.1713, and it looks as though we are heading there given the positive look of the longer term indicators, above which will start running into strong resistance in the 1.1735/1.1800 area. A break of 1.1800 could then mean that we on our way to 1.2000 and potentially to 1.2150 although I am not sure who would want to be buying the Euro at such dizzy levels.

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.

Resistance Support
1.1800 200 WMA 1.1640 Minor
1.1775 Minor 1.1615 Friday low/Previous high (3 May 2016)
1.1735 (38.2% of 1.3993/1.0340) 1.1585 Minor
1.1713 23 Aug 2015 high 1.1550 (23.6% of 1.1118/1.1682)
1.1682 Friday high 1.1500 200 HMA

Economic data highlights will include:

M:  Markit EU/US Flash Mfg/Services/Composite PMIs, Buba Monthly Report, US Existing Home Sales

T:  German IFO Business Climate/Expectations, US Case Shiller House Price Index, US House Price Index, Richmond Fed Mfg Index, API weekly Crude Oil Stock Inventory

W: US New Home Sales (Jun), EIA weekly crude oil stock change, FOMC Meeting/Interest Rate Decision/Statement

T: German Consumer Confidence, Chicago Fed National Activity Index, Wholesale Inventories (Jun), Durable Goods (June), Kansas Fed Mfg Activity (Jul),

F: German Import Price Index, German CPI, EU Consumer Confidence, Economic Sentiment Indicator, Industrial Confidence, Services Sentiment, Business Climate, US GDP, Personal Consumption/Expenditure Index, Michigan Consumer Sentiment Index, Baker Hughes Oil

USDJPY: 111.11
24 Hour: Prefer to sell rallies Medium Term: Neutral
Preferred Strategy: Prefer to sell rallies towards 111.70/90. SL above 112.00.US$Jpy had a tough session on Friday and closed the week towards its 111.00 lows after having taken out some important levels of support.

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.

Resistance Support
112.41 20 July high 111.00/110.98 Friday low (61.8% of 108.80/114.49)/200 WMA
112.00 Pivot 110.80 Minor
111.95 200 DMA 110.64 16 June low
110.70 100 DMA 110.53 (61.8% of 108.12/114.49)
110.40 Minor 110.15 (76.4% of 108.80/114.49)

Economic data highlights will include:

M: Nikkei Flash Mfg PMI

T: BOJ Minutes



F: CPI, Unemployment, Retail Trade

GBPUSD: 1.2994
24 Hour: Neutral Medium Term: Neutral
Preferred Strategy: Neutral. Cable looks set to remain choppy ahead of the FOMC, Wednesday, and 1.2900/1.3050 may well cover it. The Q2 UK GDP (Wed) will be the highlight of the week for Sterling.Sterling had a choppy end to the week, trading a tight range either side of 1.3000. The momentum indicators are a mixed/flat again on Monday and a cautious stance is required, with a soft US$ competing with Brexit woes to push Cable around.

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.

Resistance Support
1.3125 18 July high 1.2952 Friday low
1.3100 Minor 1.2932 20 July low
1.3061 18 July high 1.2920 (38.2% of 1.2589/1.3125)
1.3032 20 July high 1.2900 Minor
1.3019 Friday high 1.2870 Minor

Economic data highlights will include:


T:  CBI Distributive Trade Survey – Orders

W: UK Provisional Q2 GDP, Inflation Report Hearing

T:  CBI Distributive Trade Survey – Realised

F: Consumer Confidence

USDCHF: 0.9458
24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
Preferred Strategy: Having broken decisively below 0.9500, the weak close on Friday suggests selling rallies on any squeeze back towards 0.9500 with a SL placed above 0.9550.US$Chf fell heavily on Friday, reaching the 0.9442 target by trading to a low of 0.9437, and with the momentum indicators generally pointing lower further losses do appear to be in store. Once below 0.9440 there is little support to be seen until 0.9330, and below that, not much again until 0.9260.

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.

Resistance Support
0.9593 (23.6% of 1.0099/0.9437) 0.9442/0.9437 3 May 2016 low/Friday low
0.9555 200 WMA 0.9400 Minor
0.9522 Friday high 0.9360 Minor
0.9500 Minor 0.9330 (50% pivot of 0.8326/1.0343)
0.9485 Minor 0.9257 Aug 2015 low

AUDUSD: 0.7912
24 Hour: Neutral Medium Term: Neutral – Possibly look to buy dips.
Preferred Strategy: Rangebound. Possibly looking to buy dips towards 0.7875. SL sub 0.7830.The Aud took a hit from the RBA’s Debelle on Friday, with his dovish comments sending the Aud down to 0.7875 ahead of a slow and choppy recovery, to finish the week at 0.7915. The momentum indicators look mixed at the start of the new week and a cautious stance is warranted although the longer term charts still hint that buying dips remains the longer term plan, with the weeklies particularly suggesting that at some stage we are in for a test of 0.8000+.

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.

Resistance Support
0.8015 200 WMA 0.7900 Minor
0.7987 20 July high 0.7874 Friday low
0.7975 200 MMA 0.7850 Minor
0.7958 Friday high 0.7830 (23.6% of 0.7328/0.7987)
0.7935 Minor 0.7800 Minor

Economic data highlights will include:






NZDUSD: 0.7454
24 Hour: Neutral Medium Term: Prefer to buy dips
Preferred Strategy: Against my better judgement it looks as though buying dips is the plan for now. Keep stops tight below 0.7390 though.The Kiwi remained firm on Friday, following on from the mad words of the NZ Finance Minister who said he is unperturbed by the strong Kiwi which must have left the RBNZ and exporters tearing their hair out. The effect has been to see the Kiwi finish at 12 month highs, and above 0.7485 it would be trading at a 2 year high.

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.

Resistance Support
0.7545 100 MMA 0.7435 200 WMA
0.7520 55 MMA 0.7430 Minor
0.7500 Minor 0.7415 Minor
0.7485 7 Sept high/ (50% pivot of 0.8835/0.6125) 0.7390 Minor
0.7455 Friday high 0.7365 Minor

Economic data highlights will include:



W: Trade Balance (Jun)

T:  Import Export Index (Q2)

F: PPI (Q2)

By | July 24, 2017
Source: FXCharts

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