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

  • Economics/ Politics/Central Banks:
  • The Fed minutes hinted at increasing tensions on inflation shortfall
  • Fed policymakers discussed possible reasons why financial conditions had not tightened following hikes in Fed funds rate
  • Several Fed board member wanted to announce start of balance-sheet trimming within a ‘couple of months’
  • Currencies:
  • Mostly rangebound, in choppy trade after the release of the Minutes, but are generally unchanged.
  • The DXY finished at 96.27.
EURUSD: 1.1348
  • Short term momentum indicators: Mixed.
  • Daily momentum indicators: Possible topping formation
  • Upcoming market moving events: The ECB Monetary Policy Minutes and German Factory Orders will be the European focus, to be followed in the US by the ADP Jobs data (exp +187K), Trade Balance and the weekly Jobless Claims.
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy:  A neutral stance is required ahead of today’s ADP figure and then tomorrow’s NFP, and with the momentum indicators looking mixed it would seem that we are in for a choppy ride, but possibly without any real direction.Back below 1300/10, may see a move to 1.1280 and possibly to 1.1260, but buying dips still seems to be the plan given the positive look of the longer term momentum indicators. Below 1.1260 could then see a slide towards 1.1235

On the topside, minor resistance lies in the 1.1370/1.1400 area, but a break of which would then target 1.1445/50. A break of this would then open the way to the May 2016 high of 1.1616 although this seems rather unlikely for a while to come.  Look for 1.13/1.14 again today (1.1310/80) and wait for the NFP to provide the directional move tomorrow.

Resistance Support
1.1480 Minor 1.1320 (38.2% of 1.1117/1.1445)
1.1445 Descending trend resistance/29 June high/29 June high 1.1311 Session low
1.1426 3 July high 1.1285 (50% of 1.1117/1.1445)
1.1380 100 HMA 1.1265 Minor
1.1368 Session high 1.1242 (61.8% of 1.1117/1.1445)

Economic data highlights will include:

German Factory Orders, ECB Monetary Policy  Meeting Accounts, US ADP Jobs data, Trade Balance, Jobless Claims

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USDJPY: 113.20
  • Short term momentum indicators: Turning lower?
  • Daily momentum indicators: Turning higher
  • Upcoming market moving events: Nil
24 Hour Outlook: Prefer to sell rallies Medium Term: Mildly Bullish
Preferred 24-hour Strategy: US$Jpy consolidated near 113.00 again on Tuesday, trading within a range of 112.82/113.68.Look for much the same today. The short term momentum indicators are beginning to look a bit heavy to me and we may see a drift lower, but the dallies remain positive so buying dips remains the overall gameplan.
Resistance Support
114.35 10 May high 112.82 Session low
114.00 Minor 112.73 4 July low
113.85 15 May high 112.52 (23.6% of 108.80/113.68)
113.68 Session high 112.35 200 HMA
113.50 Minor 112.05 Minor


GBPUSD: 1.2932
  • Short term momentum indicators: Mixed. Neutral
  • Daily momentum indicators: Turning higher?
  • Upcoming market moving events: NIESR GDP Estimate
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: Cable has traded a tight range of 1.2893/1.2947 and something similar would seem to be in store today although the NIESR GDP Estimate may provide some volatility.  The momentum indicators are mixed but possible short term weakness looks possible, which would again find support at 1.2910 (Daily cloud top) and the session low of 1.2893, but below which could run to 1.2860. On the topside, resistance will be seen at 1.2850, 1.2880, 1.3000 and again at 1.3022, the 3 July high.
Resistance Support
1.3047 18 May high 1.2910 Daily cloud top
1.3022 3 July high 1.2892 Session low
1.3000 Pivot 1.2860 (38.2% of 1.2588/1.3029)
1.2958 4 July high 1.2810 (50% of 1.2588/1.3029)
1.2947 Session high 1.2785 Minor

Economic data highlights will include:

NIESR GDP Estimate


USDCHF: 0.9644
  • Short term momentum indicators: Neutral
  • Daily momentum indicators: Turning higher?
  • Upcoming market moving events: Swiss CPI
24 Hour Outlook: Neutral Medium Term: Neutral
Preferred 24-hour Strategy: US$Chf is a unchanged today, at 0.9650, after a range of 0.9630/87. With the short term momentum indicators now mixed, a similar session ahead looks likely. On the topside, another run to the session high could take us on to 0.9700 and then to 0.9745 although I don’t see it up here today. On the downside, support will be seen at 0.9630, 0.9600 and again at 0.9550/55. Another range trade of 0.9620/0.9685 seems most likely today.
Resistance Support
0.9745 Descending trend resistance 0.9631 Session low
0.9730 Minor 0.9621 4 July low
0.9700 Minor 0.9600 Minor
0.9680/87 (23.6% of 1.0099/0.9555)/Session high 0.9585 Minor
0.9660 Minor 0.9555/52 3 July low/29 June low

Economic data highlights will include:

CPI


AUDUSD: 0.7604
  • Short term momentum indicators: Mixed. Turning lower?
  • Daily momentum indicators: Turning lower
  • Upcoming market moving events: Trade Balance (exp +1.1 bio)
24 Hour Outlook: Prefer to sell rallies Medium Term: Neutral –Turning slightly bearish
Preferred 24-hour Strategy: The momentum indicators are looking increasingly heavy and selling rallies seems to be the plan, with a SL today placed above 0.7650. Today’s low was 0.7570 and if 0.7565/70 is taken out we may be in for a move towards 0.7540 and possibly to 0.7520.
Resistance Support
0.7700 Pivot 0.7570 Session low
0.7685 Minor 0.7565 (38.2% of 0.7328/0.7710)
0.7660 100 HMA 0.7540 (50% pivot of 0.7373/0.7710)
0.7631 Session high 0.7520 (50% pivot of 0.7328/0.7710)
0.7622 200 HMA 0.7500 Minor

Economic data highlights will include:

Trade Balance


NZDUSD: 0.7289
  • Short term momentum indicators: Neutral Turning higher?
  • Daily momentum indicators: Turning lower
  • Upcoming market moving events: Nil.
24 Hour Outlook: Prefer to sell rallies Medium Term: Neutral
Preferred 24-hour Strategy: The Kiwi still seems to be building a topping formation although the price action is very choppy and difficult to get a handle on. As before, I prefer to sell rallies, with a SL placed above 0.7350 although it may be that we are in for another sideways session today at close to 0.7300.
                                         Resistance             Support
0.7402 8 Nov high 0.7275 Minor
0.7360 Minor 0.7253 Session low/28 June low
0.7344/45 3 July high/29 June high 0.7235 Minor
0.7325 Minor 0.7220 (23.6% of 0.6816/0.7343)
0.7296/98 Session high/4 July high 0.7193 22 June low

By | July 6, 2017
Source: FXCharts

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