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

EURUSD: 1.1638
24 Hour: Neutral. Range trade Medium Term: Mildly Bullish
Preferred Strategy: NeutralEurUsd has had a rangebound session (1.1624/83) leaving the outlook unchanged and the short term momentum indicators suggest that we could be in for a similar session ahead on Tuesday.

On the topside, above 1.1685 could see a run towards the August 2015 spike high of 1.1713 and it looks as though we are heading there at some stage in the near future given the positive look of the longer term indicators, albeit probably not today. Above this would then start running into strong resistance in the 1.1735/1.1800 area although this remains some way off at this stage and is unlikely to be seen ahead of Wednesday, and possibly Friday when the Q2 GDP figure will be released. 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 downside 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.

Resistance Support
1.1800 200 WMA 1.1624 Session low
1.1775 Minor 1.1615 21 July 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)
1.1683 Session high 1.1500 200 HMA

Economic data highlights will include:

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

USDJPY: 111.17
24 Hour: Prefer to sell rallies Medium Term: Neutral
Preferred Strategy: I mildly prefer to buy dips towards 110.65/75 (SL sub 110.50) today although not looking for too much either way, and I doubt that we see 112.00.Having fallen to 110.62 on Monday, the dollar has since squeezed back above 111.00 as we now await the BOJ Minutes although no surprises are expected.

The momentum indicators mixed on Tuesday although the short term charts hint at a mild continuation of the recovery, where resistance would be seen at the session high and then again at 111.50 ahead of the stronger area between 111.65/95. I would be surprised to see the dollar trade at much above 112.00, but if wrong we could head back towards 112.40.

A sustained downside break of 111.00 would allow a return towards 110.55/65 and possibly to 110.15 although this looks unlikely today.

Resistance Support
112.41 20 July high 111.10 200 WMA
111.95 200 DMA /100 WMA 110.80 Minor
111.65 100 DMA 110.64/62 16 June low/Session low
111.52 (23.6% of 114.50/111.62) 110.53 (61.8% of 108.12/114.49)
111.31 Session high 110.15 (76.4% of 108.80/114.49)

Economic data highlights will include:

T: BOJ Minutes

GBPUSD: 1.3023
24 Hour: Neutral Medium Term: Neutral
Preferred Strategy: NeutralCable started the week on a positive note in moving back above 1.3000, benefitting from growing hopes of a soft Brexit and from the weaker than expected EU Markit flash PMIs.

The momentum indicators are a mixed/flat again on Tuesday and a cautious stance is required while we remain within the recent choppy range, which looks set to continue to contain the price action.

On the downside, below today’s low of 1.2983 could then see a return to last week’s low of 1.2933 which would find added support at the Fibo level at 1.2920. Below this, unlikely today, 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 the session high of 1.3057 could then head to 1.3100 and into the good resistance 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
1.3125 18 July high 1.2983 Session low
1.3100 Minor 1.2952 21 July low
1.3080 Minor 1.2932 20 July low
1.3061 18 July high 1.2920 (38.2% of 1.2589/1.3125)
1.3057 Session high 1.2900 Minor

Economic data highlights will include:

T:  CBI Distributive Trade Survey – Orders

USDCHF: 0.9467
24 Hour: Neutral Medium Term: Mildly Bearish
Preferred Strategy: NeutralUS$Chf has had a tight, rangebound session (0.9445/0.9475) leaving the outlook unchanged.

The momentum indicators are mixed today and similar session could be in store. While the short term momentum indicators look slightly more positive, the dailies still point lower and if we head below 0.0935/45 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 0.9475 ahead of 0.9500 and 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) 0.9444/42/37 Session low/3 May 2016 low/21 July low
0.9555 200 WMA 0.9400 Minor
0.9522 21 July high 0.9360 Minor
0.9500 Minor 0.9330 (50% pivot of 0.8326/1.0343)
0.9475 Session high 0.9257 Aug 2015 low

AUDUSD: 0.7923
24 Hour: Neutral Medium Term: Neutral – Possibly look to buy dips.
Preferred Strategy: NeutralThe Aud squeezed up to 0.7967 in early Europe on Monday but was unable to maintain the strength and it has since slipped back to 0.7925.

The momentum indicators look mixed again on Tuesday 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, below 0.7900, the initial support will arrive at 21 July’s low of 0.7874, ahead of the chance of a drop to 0.7830 although this looks unlikely at this stage.

On the topside, minor resistance will be seen at 0.7930 and again at 0.7965, 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 0.7902 Session low
0.7987 20 July high 0.7874 21 July low
0.7975 200 MMA 0.7850 Minor
0.7966 Session high 0.7830 (23.6% of 0.7328/0.7987)
0.7930 100 HMA 0.7800 Minor

NZDUSD: 0.7433
24 Hour: Neutral Medium Term: Neutral
Preferred Strategy: It could be that the 200 WMA @ 0.7435 acts as a magnate for the next day or two and another reasonably tight session looks likely.The Kiwi has had a rangebound session (0.7421/0.7455) leaving the outlook unchanged.

The longer term momentum indicators remain positive, and if we can overcome the resistance seen at 0.7450/55 further gains look possible although 0.7485 will be a formidable hurdle if we get there. 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 looking slightly heavy, with support coming in, below the session low of 0.7421,  at around 0.7400 and then again at 0.7370. Under there could see a return towards 0.7335 although this seems unlikely today.

Resistance Support
0.7545 100 MMA 0.7435 200 WMA
0.7520 55 MMA 0.7421 Session low
0.7500 Minor 0.7415 Minor
0.7485 7 Sept high/ (50% pivot of 0.8835/0.6125) 0.7390 Minor
0.7455 21 July high /Session high 0.7365 Minor

By | July 25, 2017
Source: FXCharts

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