| EURUSD: 1.2454 |
| EurUsd finished the week in the middle of its Friday range amid some volatile price action, back below 1.2500 but well above the 1.2408 spike low, seen following the release of the US data | |||||
| 1 hour/4 hour indicators: Neutral | Daily Indicators: Up –Possible topping formation | Weekly Indicators: Turning higher | |||
| Preferred Strategy: The momentum indicators are still indecisive, with the short term charts looking neutral, while the dailies remain positive but are becoming overbought and show some signs of topping out.On the downside, below Friday’s low of 1.2408 could revisit the 1 Feb low of 1.2388, below which would then allow a run back towards the 29 Jan low of 1.2335 and the Fibo support at 1.2305. A break of 1.2300 would then allow a move towards 1.2225 although this is a long way off yet.
With the weekly charts still looking positive, and the dailies yet to confirm any turn lower, further dollar strength may be short lived and buying any dips in the Euro may still be the medium term trade. If so, back above 1.2500 would then target 1.2520 and 1.2538, beyond which, would open the way to 1.2590. A cautious stance is currently required although I do favour selling into rallies towards 1.2500, but having closed near the 200 MMA this may continue to act as a magnate in the sessions ahead. Monday will be a busy one for EU data so Europe could be in for a choppy session. |
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| Resistance | Support | ||||
| 1.2592 | (61.8% of 1.3993/1.0340) | 1.2425 | 200 MMA | ||
| 1.2550 | Minor | 1.2408 | Friday low | ||
| 1.2538 | 25 Jan high/100 MMA | 1.2384 | 2 Feb low | ||
| 1.2521/17 | 2 Feb high /Friday high | 1.2336/34 | 28 Jan/29 Jan low | ||
| 1.2490 | Minor | 1.2305 | (23.6% of 1.1553/1.2538) | ||
Economic data highlights will include:
M: EU/US Markit Services/Composite PMIs, EU Sentix Investor Confidence Survey, EU Retail Sales (Dec) , ISM Non – Mfg PMI
T: German Factory Orders, US Trade Balance, API Weekly Crude Oil Stock Inventory
W: German Industrial Production, ECB Non-Monetary Policy Meeting, US Mortgage Approvals,
T: German Trade Balance, EU Economic Bulletin, US Jobless Claims
F: US Wholesale Inventories, Baker Hughes Oil Rig Count
…
| USDJPY: 110.18 |
| US$Jpy is higher at the end of Friday, having returned to a positive correlation with the 10-yr US -JGB yields following on from the recent speculation of BOJ normalisation, which had underpinned the Jpy during the week. | |||||
| 1 hour/4 hour indicators: Turning higher | Daily Indicators: Neutral –Turning higher. | Weekly Indicators: Neutral | |||
| Preferred Strategy: The short term momentum indicators are still looking positive, and with the dailies now also picking up steam the dollar does seem to have based, encouraging thoughts of further gains ahead.If 110.35/45 can be overcome then we should be able to take a look at 110.70 and even the mid January high at 111.20 although early in the week much will depend on the direction of the bond market.
On the downside, support will be seen at the minor Fibo levels, towards 109.00, of last week’s rise from 108.27. Further out, if we head back below the 31 Jan low of 108.59, it may be that we see a return towards the 29 Jan low of 108.40, below which would head to the 26 Jan low of 108.27. A break of this would then find little to hold the dollar up until rising trend support at 107.50 and the 2017 low at 107.32 but this looks increasingly distant. As with last week, while allowing for a dip, the short term momentum indicators still suggest that we should be looking to buy into weakness, but with a tight SL in place. Buy US$Jpy @ 109.80. SL @ 109.20, TP @ 111.00 |
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| Resistance | Support | ||||
| 111.21 | 22 Jan high | 109.95 | (23.6% of 108.27/110.47) | ||
| 111.00 | Minor | 109.65 | (38.2% of 108.27/110.47) | ||
| 110.73 | (38.2% of 114.73/108.27) | 109.50 | Minor | ||
| 110.47 | Friday high | 109.27 | Friday low /100 HMA/200 HMA | ||
| 110.35 | (38.2% of 111.38/108.27) | 109.09 | (61.8% of 108.27/110.47) | ||
Economic data highlights will include:
M: Markit Services PMIs
T:
W: Coincident Index, Leading Economic Index
T: Foreign Bond/Stocks Investment, Trade Balance, Current Account, Eco Watchers Survey
F: Tertiary Industry Index
…
| GBPUSD: 1.4117 |
| Sterling fell hard on Friday, not helped by the weak UK Construction data – which is now very close to contraction territory – or by the US data. Having opened near the high of 1.4277 it closed just above the 1.4101 low and looks heavy heading into Monday trade. | |||||
| 1 hour/4 hour indicators: Down | Daily Indicators: Up – Possible topping formation. | Weekly Indicators: Up | |||
| Preferred Strategy: As we said last week, Cable remains very choppy and is probably best left alone right now and it would seem set to remain roughly in a range of 1.4000/1.4300 so look to trade that, or possibly 1.4100/1.4250, with a tight 50 point stop placed either side. Note that the BOE Meeting is on Thursday, and traders are now looking towards the chance of a UK rate hike in April/May, I would not be getting too bearish towards the lower end of the range but possibly looking to buy any dip towards 1.4000. UK Services data due today. | |||||
| Resistance | Support | ||||
| 1.4276 | Friday high | 1.4101 | Friday low | ||
| 1.4235 | Minor | 1.4065 | Minor | ||
| 1.4200 | Minor | 1.4035 | (23.6% of 1.3075/1.4345) | ||
| 1.4165 | 100 HMA/200 HMA | 1.4000 | Psychological | ||
| 1.4150 | Minor | 1.3980 | 31 Jan low | ||
Economic data highlights will include:
M: Markit Services PMIs
T:
W:
T: BOE Meeting/Statement/Minutes/Vote Count/APP Facility
F: Manufacturing/Industrial Production, NIESR GDP Estimate
…
| USDCHF: 0.9312 |
| US$Chf has had another choppy day on Friday, recovering from a new 2 ½ year low of 0.9250, to fish the week back above 0.9300 as the sideways trade continues and leaving the outlook unchanged. | |||||
| 1 hour/4 hour indicators:Turning higher | Daily Indicators: Down – Possible basing formation | Weekly Indicators: Turning lower | |||
| Preferred Strategy: As before, the longer term charts look heavy, although the dailies may be basing, and we could yet see a retest of the 0.9250 low, below which there is a black hole until around 0.9150.The shorter term charts though look a little more positive though, and on the topside, resistance will be seen at 0.9335/40, at 0.9360 and then at 0.9380/90, a break of which could see the dollar carry on to the 26 Jan high 0.9430. Given the positive momentum of the 4 hour charts, buying dips for the next 24 hours is mildly preferred, with a SL placed tight under 0.9250. In the longer term, note in the weekly charts that we are still below the previous rising trend support (0.9440) and this could act as a major hindrance to any meaningful further gains.
Buy US$Chf @ 0.9290. SL @ 0.9240, TP @ 0.9415 |
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| Resistance | Support | ||||
| 0.9425 | (23.6% of 0.9977/0.9250) | 0.9290 | Minor | ||
| 0.9392 | 29 Jan high | 0.9275 | Minor | ||
| 0.9358 | 31 Jan high | 0.9250 | Friday low | ||
| 0.9341 | 2 Feb high | 0.9210 | Minor | ||
| 0.9336 | Friday high | 0.9180 | Minor | ||
…
| AUDUSD: 0.7921 |
| AudUsd finally broke back below 0.8000, opening the US session on Friday nearby but then fell hard after the US data, as US yields spiked higher. Closing on its lows at 0.7920, things are looking increasingly bleak for the Aud, with 2 year US rates now heading above Aussie rates, although much will depend this week on the outcome of the RBA Interest Rate Decision and the December Retail Sales figure (exp +0.3%). | |||||
| 1 hour/4 hour indicators: Down | Daily Indicators: Down | Weekly Indicators: Neutral – Turning higher | |||
| Preferred Strategy: The Aud found no friends on Friday and in closing on its lows it looks as though there is more downside to come this week. The initial support is at around 0.7890 but under there, there is little to be seen until 0.7845/50 and then again at 0.7815/20. On the topside, resistance will be seen at 0.7950, 0.7975 and 0.8000.Right now selling rallies is preferred.
Sell AudUsd @ 0.7950. SL @ 0.8105, TP @ 0.7850 |
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| Resistance | Support | ||||
| 0.8045 | Minor | 0.7920 | Friday low | ||
| 0.8015 | Minor | 0.7892 | (38.2% of 0.7502/0.8135) | ||
| 0.8000 | Psychological | 0.7875 | Minor | ||
| 0.7975 | Minor | 0.7847 | 12 Jan low | ||
| 0.7950 | Daily Kijun | 0.7817 | (50% of 0.7502/0.8135) | ||
Economic data highlights will include:
M: AIG Performance of Services Index, ANZ Job Ads, Caixin China Services PMI
T: New Home Sales, Trade Deficit, Trade Balance, Retail Sales, RBA Interest Rate Decision
W: AIG Performance of Construction Index
T: China Trade Balance, RBA Governor Lowe Speech.
F: Home Loans/Investment Lending for Homes, RBA Monetary Policy Statement, China CPI
…
| NZDUSD: 0.7298 |
| The Kiwi is resilient and remains at 0.7300 although it did retreat sharply from its 0.7405 high once US yields spiked higher following Friday’s US jobs data. Look out for the Global Dairy Trade Index (Tue) and the RBNZ (Thur). | |||||
| 1 hour/4 hour indicators: Down | Daily Indicators: Turning lower | Weekly Indicators: Turning higher? | |||
| Preferred Strategy: The daily charts are looking increasingly toppish, and a break of 0.7280/90 could lead to a steeper decline towards 0.7215/0.7185, so selling rallies may now be the plan,On the topside, resistance will be seen at minor levels ahead of 0.7400/10, but above which could see a run back towards 0.7435, albeit not today. Look to sell into strength
Sell NzdUsd @ 0.7350. SL @ 0.7420, TP @ 0.7200 |
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| Resistance | Support | ||||
| 0.7438 | 24 Jan high | 0.7294/90 | Friday low/26 Jan low | ||
| 0.7400 | Psychological | 0.7279/82 | 29 Jan low/(23.6% of 0.6780/0.7438) | ||
| 0.7375 | Minor | 0.7260 | Minor | ||
| 0.7350 | Minor | 0.7234 | 24 Jan low | ||
| 0.7330 | Minor | 0.7220 | 12 Jan low | ||
Economic data highlights will include:
M: ANZ Commodity Price Index
T: Waitangi Day Holiday, Global Dairy Trade Index
W: Unemployment
T: RBNZ Interest Rate Decision, Unemployment
F:
By February 5, 2018