13 Nov: Forecast: FX: US$/Majors + trade ideas: FXCharts

EURUSD: 1.1665
Preferred Strategy:  EurUsd had a steady session on Friday although the dollar remained heavy due to the US tax plan concerns, with the Euro underpinned into the weekend, and the pair closed just below the neckline of the head/shoulders formation.As before, some caution is warranted by those who are short the Euro as the momentum indicators, including the dailies, seem to be turning to point higher although as long as the Euro holds below 1.1675 on a daily-close basis, shorts can be maintained but with a tight SL above here. A topside break of 1.1675 would trigger stops and could see a run back to 1.1720 where the 100 DMA will provide stern resistance, but above there could see a bigger squeeze towards the descending trend resistance at around 1.1775.

On the downside, support will today be seen at 1.1620 and again at around 1.1580/85, where the rising trend support also lies. Below there, the trend low at 1.1553 and the Fibo level at 1.1510 will come into play although probably not today.

Right now the upside looks to be the path of least resistance, but I would still look to sell into strength, with a SL placed tight above the 100 DMA. The weeklies still point lower but any tax-bill headlines should be watched closely this week, as any hint of a delay would have quite an impact on markets, possibly sending the dollar sharply lower. The US Retail Sales and CPI on Wednesday are the next key event risks. Keep SL tight on any short positions

Sell EurUsd @ 1.1690 & @ 1.1710. SL @ 1.1735, TP @ 1.1500.

24 Hour: Mildly Bullish – Prefer to sell rallies Medium Term: Mildly Bearish
FX Charts Position: Short  – Looking  to add to the position into strength
Resistance Support
1.1760 (61.8% of 1.1879/1.1574) 1.1620 200 HMA /Friday low
1.1715/18 (50% of 1.1879/1.1574)/100 DMA 1.1600 Minor
1.1686/90 3 Nov high /(38.2% of 1.1879/1.1574) 1.1578 Rising trend support
1.1675/77 H.S. Neckline /Friday high 1.1553 7 Nov low
1.1660 200 WMA 1.1510 (38.2% of 1.0570/1.2091)

Economic data highlights will include:

M: BuBa Monthly Report, US Monthly Budget Statement

T: German CPI/HICP, Preliminary Q3 GDP, EU Preliminary GDP, Industrial Production, German/EU ZEW Economic Sentiment Survey , US PPI, US NFIB Business Optimism Index, API Weekly Crude Oil Stock Inventory

W: EU Trade Balance, US Retail Sales, CPI, Business Inventories

T: German WPI, EU CPI, US Jobless Claims, Import/Export Index, Capacity Utilisation, Industrial Production, Philadelphia Fed Mfg Survey, NAHB Housing Market Index

F: EU Current Account, Construction Output, US Building Permits, Housing Starts, Kansas Fed Mfg Activity, Baker Hughes Oil Rig Count

USDJPY: 113.50
Preferred Strategy:  US$Jpy chopped around in a tight range on Friday, going nowhere fast, and given the rather mixed/neutral look of the momentum indicators we could be in for a similar session today.On the downside, support will be seen at Fridays low at 113.20 and then again at 112.95/00, below which there is only minor support to be seen ahead of the mid October low at 112.30 although I don’t think we head this far today.

On the topside, minor resistance now lies at 113.65 and 113.85, ahead of 114.00 and the 9 Nov high of 114.06. Above here, unlikely today, could return to 114.35/45 and beyond, towards the 114.73, 6th Nov high, but above which could see a test of the descending trend resistance, currently at around 114.90. A break of 115.00 would then see little resistance until 115.20 and then 115.50.

I remain fairly neutral, although I still like the dollar in the medium term and prefer to buy dips although right now may be a little premature to do so.

24 Hour: Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
114.73 6 Nov high 113.21 Friday low
114.33 7 Nov high 113.08 9 Nov low
114.06 9 Nov high 112.95 31 Oct low/(23.6% of 107.31/114.73)
113.85 200 HMA 112.70 Minor
113.63 Friday high 112.30 19 Oct low

Economic data highlights will include:

M:  Provisional Machine Tool Orders


W: Preliminary GDP (Q3), Industrial Production, Capacity Utilisation

T:  Foreign Bond/Stocks Investment


GBPUSD: 1.3190
Preferred Strategy: Sterling had a bumper session in comparison to everything else; rising sharply after the release of the Manufacturing/Industrial Production easily beat expectations, sending GbpUsd up to 1.3228 before settling the week at 1.3200.The momentum indicators remain in neutral, so a cautious stance is required and further choppy trade near current levels would not really surprise although the 4 hour momentum indicators do look mildly positive, and a break of 1.3225/30 could see a run towards 1.3250 and possibly on to 1.3275. At this stage 1.3300 (2 Nov high) does seem too far off to consider unless the US$ comes under pressure of its own.

On the downside, support will be seen at 1.3180 (Minor) ahead of 1.3155 and then at 1.3110.

A cautious stance is needed but if anything I suspect we may be in for a test of the topside.

Buy GbpUsd @ 1.3160. SL @ 1.3095, TP @ 1.3275

24 Hour: Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
1.3275 Minor 1.3155 200 HMA
1.3255 (76.4% of 1.3320/1.3042) 1.3110 Friday low
1.3235 Minor 1.3085/80 9 Nov low /8 Nov low/100 DMA
1.3228 Friday high 1.3060 Rising trend support
1.3215 (61.8% of 1.3320/1.3042) 1.3026 6 Oct low

Economic data highlights will include:


T:  UK CPI, PPI, RPI (Oct)

W: UK Unemployment

T: Retail Sales


USDCHF: 0.9959
Preferred Strategy: US$Chf had a steady session on Friday but closed towards the top end of its tight range and may be building for further small gains in the coming session.The short-term momentum indicators are neutral although the 4 hour charts may be picking up some steam and suggest that we could see a run towards 0.9980/1.0000 today, although the dailies are still looking slightly heavy and may signal another decline towards Friday’s low at 0.9920. Beyond that would open the way to 0.9890/9900, and then possibly to 0.9865 over the coming days although I don’t think we head back here today.

With the weekly momentum indicators generally looking positive, further dollar strength could be in store down the track, and if we can take out 1.0015/25 we could then head on to take another look at 1.0035/40. Above this there is little to hold the dollar up ahead of 1.0100, and beyond that to 1.1025 and 1.0170.

For now, look for the dollar to chop around current levels and possibly to head a little higher today, but with the view of buying dips for an eventual move towards 1.1000+.

Buy US$Chf @ 0.9920. SL @ 0.9880, TP @ 1.0025.

24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
FX Charts Position: Long – Looking to add on dips.
Resistance Support
1.0036/37 27 Oct high /1 Nov high 0.9921 Friday low/9 Nov low
1.0028 6 Nov high 0.9900 Rising trend support
1.0017 9 Nov high 0.9890 (23.6% of 0.9420/1.0037)
0.9990 200 HMA 0.9868 25 Oct low
0.9968 Friday high 0.9850 Minor

Economic data highlights will include:

M: BuBa Monthly Report, US Monthly Budget Statement

T: German CPI/HICP, Provisional Q3 GDP




AUDUSD: 0.7658
Preferred Strategy: The Aud had another choppy session on Friday, but closed towards the lows of the 0.7653/94 range after having again failed to overcome the 200 DMA at 0.7700.The short term momentum indicators are neutral and the dailies are offering little assistance either although they may be in the process of turning lower again, but the weekly charts still look heavy so selling into strength remains the overall plan. Near term support arrives at 0.7650 and again at the strong level of 0.7625. An eventual break of 0.7625 would bring fresh selling which could then see a run towards 0.7600 and eventually to 0.7570. I suspect the Aud$ is building a bear flag (see daily chart) and is biding its time ahead of a more sustained test of 0.7625/30, which could then take us to 0.7570 and eventually towards 0.7400, but patience will be required and we look likely to see better levels to sell it than we are currently trading at.

On the topside, resistance will be seen at 0.7675/80 and again at 0.7695/0.7700 on Monday although I doubt that we actually see it up here. If wrong, we could be in for a possible squeeze above 0.7700 which could see a run towards 0.7730/40. Doubtful.

Watch out for the RBA Asst Governor Debelle who will be speaking at the Business Investment in Australia conference today.

Sell AudUsd @ 0.7680. SL @ 0.7710, TP @ 0.7580

24 Hour: Neutral  – Prefer to sell rallies Medium Term: Neutral –Mildly Bearish
FX Charts Position:     Square AudUsd. Long GbpAud
Resistance Support
0.7738 Descending trend resistance 0.7653/50 Friday low/9 Nov low
0.7729 2 Nov high 0.7624 27 Oct low
0.7715 Minor 0.7600 Minor
0.7700 200 DMA/7 Nov high 0.7585 Minor
0.7693 Friday high/9 Nov high 0.7571 7 July low

Economic data highlights will include:

M:  RBA’s Debelle Speech, China Foreign Direct Investment (Oct)

T:  NAB Business Conditions/Confidence, China Retail Sales, Industrial Production, Urban Investment

W: WBC Consumer Confidence, Wage Price Index, New Motor Vehicle Sales

T:  Unemployment, CPI


NZDUSD: 0.6931
Preferred Strategy: The Kiwi had a choppy end to the week but finished towards the lower end of the 0.6920/57 range, ending the series of higher highs/lows.We may be in for more choppy trade today, and on the downside, the initial support lies at 0.6920 ahead of 0.6900, which might hold it for the coming session. If wrong, a move back below 0.6890 could see a retest of 0.6875, below which could then see a return to 0.6850. Under there would find strong support at 0.6830 and again at 0.6817, where we have the double bottom with the May low. Below that though would then find that there is little support ahead of 0.6670 although I don’t think we head anywhere close for the time being.

On the topside, resistance will be seen at 0.6850/60 and again at 0.6975/80, which should be strong but above which could see a run to 0.7000 and above.

Overall, with the longer term (weekly) charts looking heavy, I suspect the Kiwi is currently biding its time ahead of a more sustained test of the recent lows, but patience will be required.

24 Hour: Neutral Medium Term: Neutral –Mildly Bearish
FX Charts Position: Flat
Resistance Support
0.7050 Minor 0.6920 Friday low
0.7035 20 Oct high 0.6890 7 Nov low
0.7004 24 Oct high 0.6873 6 Nov low
0.6975/79 Descending trend resistance /9 Nov high 0.6832/30 30 Oct low /31 Oct low
0.6957 Friday high 0.6817 11 May low/27 Oct low

Economic data highlights will include:                                                                                   



W: Retail Sales



By | November 13, 2017
Source: FXCharts

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