EURUSD: 1.1829 |
Preferred Strategy: EurUsd is steady ahead of today’s release of the US inflation figures after having tested the neckline of the head/shoulder by reaching 1.1879. A soft inflation reading today would see the dollar come under pressure and would then take out the stops above the neckline and would see the Euro head towards 1.1900/1.2000. A strong number would underpin the dollar and send the Euro lower, potentially setting up an eventual H/S objective of around 1.1550 or an even bigger head shoulder target of 1.1235. Don’t get excited! This is a very long way off.. Overall, another range trade may be the plan for Friday ahead of the US data (1.1800/1.1.1870), beyond which just go with the flow. | |||
24 Hour: Neutral | Medium Term: Mildly Bearish – Prefer to sell rallies | ||
Resistance | Support | ||
1.1930 | (61.8% of 1.2092/1.1669) | 1.1826 | Session low |
1.1920 | Descending trend resistance | 1.1795 | 11 Oct low |
1.1900 | Minor | 1.1760 | 200 HMA |
1.1879/82 | Session high/(50% of 1.2092/1.1669) | 1.1725 | Minor |
1.1870 | Neckline resistance | 1.1700 | Minor |
Economic data highlights will include:
German CPI/HICP, US Retail Sales, CPI, Michigan Consumer Sentiment Index, Business Inventories, Baker Hughes Oil Rig Count
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USDJPY: 112.28 |
Preferred Strategy: The dollar remains rangebound within 112.00/113.00, (112.12/112.51), and similar conditions appear set to continue until the US data release. As before, I think the dollar will eventually head higher, so buying dips is preferred although for the time being another tight range could be in store while waiting on today’s US CPI figure. | |||
24 Hour: Neutral | Medium Term: Neutral | ||
Resistance | Support | ||
113.43 | 6 Oct high | 112.12/07 | Session low/11 Oct low |
113.20 | Minor | 111.98/112.00 | 10 Oct low/(23.6% of 107.31/113.43) |
113.00 | Minor | 111.80 | Minor |
112.74 | 9 Oct high | 111.65 | Minor |
112.51 | Session high | 111.46 | 25 Sept low |
Economic data highlights will include:
Foreign Bond/Stocks Investment
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GBPUSD: 1.3261 |
Preferred Strategy: Cable has had a wild ride on Thursday, initially heading lower on due to the UK payment impasse before spiking higher on speculation that the EU may offer Britain a two-year transitional Brexit deal. Currently at 1.3260, the charts are mixed. With so many balls in the air, including the chance of a November rate hike from the BOE, I am avoiding Sterling right now but the dailies are still pointing lower, so overall, in line with the stronger dollar scenario, I prefer to look for areas to sell into. | |||
24 Hour: Neutral | Medium Term: Prefer to sell rallies | ||
Resistance | Support | ||
1.3415 | (61.8% of 1.3656/1.3026) | 1.3220 | Minor |
1.3375 | Minor | 1.3190 | 100 HMA |
1.3340 | (50% of 1.3656/1.3026) | 1.3150 | Minor |
1.3325 | 100 WMA | 1.3120 | Session low |
1.3290/92 | Session high/4 Oct high | 1.3100 | Minor |
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USDCHF: 0.9754 |
Preferred Strategy: US$Chf has had a choppy session while waiting on the US CPI, due later today. The charts are mixed but in the medium term, as before, I still like the dollar higher, looking for a return towards 0.9800 and eventually for a run towards parity although it will take a decent CPI figure to see us make any headway. A close above the 200-DMA (0.9850) would help extend the uptrend – patience may be required! Wait for the CPI but prefer to be long rather than short. | |||
24 Hour: Neutral | Medium Term: Prefer to buy dips | ||
Resistance | Support | ||
0.9850 | 200 WMA | 0.9755 | Session high |
0.9835 | 200 DMA/(61.8% of 1.0099/0.9420) /6 Oct high | 0.9711/10 | Session low/4 Oct low |
0.9807 | 9 Oct high | 0.9685 | Minor |
0.9789 | 10 Oct high | 0.9676 | 2 Oct low (38.2% of 0.9420/0.9836) / |
0.9763 | Session high | 0.9642 | 25 Sept low |
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AUDUSD: 0.7820 |
Preferred Strategy: The Aud reached a high of 0.7835 on Thursday and is currently near the high and will take its next direction from the China Trade Balance (Exp US$39 bio. Exports +8.8%, Imports + 13.5%) ahead of the US inflation data. Look for a choppy session, but the momentum indicators currently look a little more supportive so buying dips looks to be the way of it. A strong CPI figure from the US, hinting at a Fed rate hike in December, effectively eliminating the Australian yield advantage may see a quick move in the other direction, so caution is warranted. | |||
24 Hour: Neutral | Medium Term: Neutral | ||
Resistance | Support | ||
0.7905 | Minor | 0.7800 | Minor |
0.7885 | Minor | 0.7790 | 100 DMA |
0.7872 | (38.2% of 0.8102/0.7732) | 0.7770 | 11 Oct low |
0.7850 | Minor | 0.7749/47 | 10 Oct low /9 Oct low |
0.7835 | Session high | 0.7732 | 6 Oct low |
Economic data highlights will include:
F: Financial Stability Report, China Trade Balance
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NZDUSD: 0.7125 |
Preferred Strategy: The Kiwi performed well on Thursday in rallying and the charts look somewhat supportive for further gains although much will depend on today’s US inflation figures. The 200 DMA will provide good resistance although above there could see a quick run to 0.7200. On the downside, support will be seen at around 0.7100, and below 0.7055 would accelerate any negative momentum. | |||
24 Hour: Neutral | Medium Term: Neutral | ||
Resistance | Support | ||
0.7215 | Minor | 0.7117 | 200 HMA |
0.7200 | (23.6% of 0.7434/0.7058) | 0.7090 | 100 HMA |
0.7180 | Minor | 0.7077 | Session low |
0.7155 | 200 DMA | 0.7055 | 10 Oct low |
0.7145 | Session high/(23.6% of 0.7434/0.7058) | 0.7035 | Minor |
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