15 June: Forecast: FX: US$/Majors: FXCharts

EURUSD: 1.1209

Despite all the short term volatility leading into and following the rate hike, which saw the Euro briefly reach a new 7 month high, EurUsd is now lower again and remains largely within the recent range, currently sitting just above 1.1200.

Despite the new high, largely due to the underperforming US Retail Sales/CPI readings, the 1.1300 November peak remains intact, ahead of the top of the channel, now at 1.1310, which will see good selling interest although given the negative look of the daily momentum indicators, this area looks unlikely to be bothered again today. If wrong, a break of the topside could elicit a quick move higher, to where the points to watch are at 1.1365 (18 Aug high), 1.1427 (24 June high) and then at 1.1450 (major descending trend resistance).

The 4 hour momentum indicators are neutral and it looks set to remain choppy, but back under the session low would then allow for another test of 1.1160/50, which should be strong if we get there but below which could potentially see a decline to 1.1100/10. Further out, 1.1075 and 1.1040 are likely targets albeit that they are still some way off.

While the dailies remain toppish, selling rallies towards 1.1280/95, with a SL placed above 1.1325 seems to be the plan.

24 Hour: Prefer to sell rallies Medium Term: Prefer to sell rallies
                                          Resistance Support
1.1326 8 Sept high 1.1197 Session high
1.1310 Channel Top 1.1163 31 May low
1.1300 9 Nov high 1.1150 (76.4% of 1.1108/1.1284)/Rising trend support
1.1295 Session high 1.1108 30 May low
1.1235 200 HMA 1.1075 18 May low

Economic data highlights will include:

EU Trade Balance, US New York State Empire Mfg Index, Jobless Claims, Philadelphia Fed Mfg Survey, Import/Export Index, Capacity Utilisation, Industrial Production, NAHB Housing Market Index

USDJPY: 109.70

US$Jpy fell sharply to make a post-hike low of 108.81 before a decent bounce to currently sit at 109.70, on the back of a sanguine Yellen press conference.

The move has stopped out players on both sides of the market, I suspect, especially with the move down to 108.80, which should now act as decent support if we get back there although this looks unlikely today. If wrong, below 108.80 could easily revisit the early April low, just above 108.00 although the short term momentum indicators are pointing a little higher today and the dollar now looks relatively underpinned following the Fed announcement.

On the topside, 110.00 looks likely to continue to act as a magnate, and above the 110.33 session high good resistance lies at 110.40/50, while further out, 110.70 and 111.00/10 will be hurdles although this seems unlikely to be seen today.

A neutral stance seems wise, although cautiously looking to buy dips, with a SL sub 108.80 may be a plan.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance Support
110.72 5 June high 109.25 Minor
110.43/47 12 June high/Daily Tenkan/ 200 DMA 109.00 Minor
110.33 Session high 108.80 Session low
110.00 Minor 108.32 18 April low
109.80 Minor 108.12 17 Apr low

Economic data highlights will include:

Foreign Bond/Stocks Investment

GBPUSD: 1.2743

Cable has ended the US session unchanged at 1.2754 after the widely expected Fed hike, with much of the focus now turning to the upcoming BOE Meeting due later today. No change to policy or the MPC Vote Count is expected and further choppy trade looks likely, with Politics/Brexit possible limiting any real upside potential.

The outlook remains much the same as before, with the topside likely to see sellers heading into the 1.2800/17 area, which capped it today, but above which could then head on to 1.2840 and then eventually on towards 1.2900.

As we said before, the market is overwhelmingly bearish on Sterling and the dailies still seem to be hinting in that direction, in which case the initial support is at 1.2700/20. Below there could see a run back to the recent lows at around 1.2636/40. Below the 100 DMA, further support would arrive at 1.2600 and then at 1.2575 and 1.2514, which was the low seen on the announcement of the election in April. Below that would head towards 1.2465/70 although that remains some way off.

I suspect we are in for a volatile range trade between 1.27/1.28 although any BOE surprise may change that theory.

24 Hour: Neutral Medium Term:  Neutral
                                         Resistance           Support
1.2890 (61.8% of 1.3047/1.2636) 1.2722 Session low
1.2840 (50% pivot of 1.3047/1.2636) 1.2700 Minor
1.2825 200 HMA 1.2636/38 9 June low/12 June low
1.2817 Session high 1.2622 100 DMA
1.2790 (38.2% of 1.3047/1.2636) 1.2576 200 DMA/(50% pivot of 1.2108/ 1.3047)

Economic data highlights will include:

Retail Sales, BOE Meeting/Statement/Minutes/Vote Count/APP Facility

By | June 15, 2017
Source: FXCharts

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