15 May: Forecast: FX: US$/Majors

EURUSD: 1.0931

Having held on above 1.0850, the Euro jumped to 1.0934 on the release of the soft US data on Friday, finishing at the day’s highs and looks positive for the early part of the Monday session.

While the short term momentum indicators look quite positive at the start of the week, the daily charts still look less so and it may be that we end up chopping around within the recent range for the next day or two. If so, on the topside, beyond the nearby resistance at 1.0930/34, sellers will arrive at 1.0950 and 1.0975 ahead of 1.1000 and last Monday’s trend high of 1.1020. A break of this would see little resistance until the channel top at 1.1055 and then the Fibo level at 1.1070 although that still looks a long way off.

Back below 1.0900, minor bids would arrive at around 1.0870/80 ahead of Friday’s low of 1.0855. Below here would revisit the Thursday low of 1.0838 and then the 200 DMA (1.0825). This should be strong, if we see it, but a break would potentially allow the chart gap to close, which would take the Euro all the way back to 1.0730.  Not today.

The short term momentum indicators look quite positive right now, and cautiously buying dips may be the plan but with the dailies looking fairly neutral, (pointing slightly lower?) I would be keeping downside stops fairly tight and would be surprised if the Euro gave a serious test to the 1.1020 high today.  With little data due, it may end up being a fairly tight session

24 Hour: Prefer to buy dips Medium Term: Prefer to sell rallies
                                          Resistance Support
1.1020 8 May high 1.0900 Minor
1.1000 Psychological 1.0855 Friday low
1.0977 (76.4% of 1.1020/1.0838) 1.0838 11 May low
1.0950 (61.8% of 1.1020/1.0838) 1.0825/20 200 DMA /24 Apr low
1.0930/34 (50% of 1.1020/1.0838) /Friday high 1.0795 (50% of 1.0570/1.1020)

Economic data highlights will include:

M:  BuBa Monthly Report, New York State Empire Mfg Index, NAHB Housing Market Index

T: EU Trade Balance, GDP, German/EU ZEW Economic Sentiment Survey, US Building Permits, Housing Starts, Industrial Production, Capacity Utilisation, API Weekly Crude Oil Stock Inventory

W: ECB Non – Monetary Policy Meeting, EU CPI, EIA Crude Oil Stocks Weekly Change

T:  US Philadelphia Fed Mfg Survey, Weekly Jobless Claims

F: German PPI, EU Current Account, Consumer Confidence, Baker Hughes Oil Rig Count


USDJPY: 113.34

US$Jpy remained heavy into the weekend as traders continued to unwind short Yen positions following the release of Friday’s US data, and finished just  above the lows of 113.20.

The short term momentum indicators now look as though further losses could lie ahead, although 113.00/10 should provide decent support, as should 112.80/85 if we see it down there. A break of this though could see a deeper run to the downside, with only minor support seen ahead of 112.00.

On the topside, minor resistance will be seen at various points ahead of 114.00 and the recent trend high of 114.36, although that looks fairly safe for now. If wrong, back above here would find little meaningful resistance until we hit 115.20 and the previous trend high of 115.50.

The dailies still look positive, so while we could see some short term weakness, I still prefer to buy dips, with a SL placed below 112.85.

24 Hour: Prefer to buy dips Medium Term: Mildly bullish – Prefer to buy dips.
                                         Resistance Support
114.36 10 May high 113.25/20 Friday low
114.20 Minor 113.12 200 HMA
113.90 Minor 113.00 100 DMA
113.75 100 HMA 112.85 (23.6% of 108.12/114.36)/Daily cloud top
113.45 Minor 112.50 Minor

Economic data highlights will include:

M:

T:

W: Machinery Orders, Industrial Production, Capacity Utilisation

T: Q1 Provisional GDP, Foreign Bond/Stocks Investment

F:


GBPUSD: 1.2885

Cable remained heavy on Friday as traders disseminated the cautious outlook from the BOE in the previous session. GbpUsd traded a relatively tight range of 1.2844/2899 against the dollar, while losing out against a stronger Euro (0.8430/0.8488).

The short term momentum indicators for GbpUsd look mixed on Monday and it may be that we have further choppy 1.2850/1.2900 trade ahead, although if we head back below the Friday low of 1.2844, then Cable could fall to 1.2830 (4 May low) and possibly to 1.2800/10.

On the topside, back above the resistance at 1.2900 and 1.2920, would see minor offers ahead of the 11 May high of 1.2947. Beyond this looks doubtful today but if wrong we could see a run towards the double top (1.2988) beyond which could trigger a move to 1.3000 – last seen in September. Above that would open the way to decent resistance levels seen at each of 1.3020, 1.3035 and to 1.3060, and then further out to where the longer descending term trend resistance currently lies at around 1.3135. A neutral stance seems wise today. There is a bit of UK data out midweek and any directional move seems likely to come, firstly, via the CPI figures due tomorrow.

24 Hour: Neutral Medium Term:  Neutral
                                         Resistance           Support
1.3000 Weekly cloud base 1.2860 Minor
1.2985/88 55 WMA /8 May high/10 May high 1.2844 Friday low
1.2947 11 May high 1.2830 4 May low
1.2920 100 HMA/200 HMA 1.2805 26 Apr low
1.2900 Friday high 1.2780 (23.6% of 1.2108/1.2987)

Economic data highlights will include:

M:

T: UK CPI, PPI, RPI

W: UK Unemployment

T: UK Retail Sales (Q1)

F:


USDCHF: 1.0010

US$Chf dropped sharply on Friday from 1.0085 to a low of 0.9987, and with the short term momentum indicators pointing lower, further losses may be in store.

While the dailies are now neutral, the short term charts hint at a possible retest of 0.9985, below which would open up minor Fibo levels at 0.9975, 0.9950 and 0.9915. On the topside, minor resistance will be seen at 1.0040 ahead of the 100 HMA at 1.0055 and Friday’s high of 1.0085, although I don’t think we go back up here today.

A fairly neutral stance is required although selling short term rallies, with a SL above 1.0085, but looking for a run to 0.9950/75 may be a plan.

24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
                                         Resistance Support
1.0107 10 Apr high 1.0000 Minor
1.0099 11 May high 0.9986 Friday low
1.0085 Friday high 0.9980 (50% of 0.9858/1.0099)
1.0055 100 HMA 0.9950 100 DMA /(61.8% of 0.9858/1.0099)
1.0040 Minor 0.9915 (76.4% of 0.9858/1.0099)


AUDUSD: 0.7386

AudUsd spent much of Friday near 0.7380/85, pretty much where it finished the week although it did manage a brief spike/reversal, to/from 0.7420 after the release of the underperforming US data.

Technically, the short term momentum indicators still look mixed although the 4 hour charts once again hint that we could see another squeeze to the topside, which, if correct could see another test of 0.7400 and 0.7420. Further, minor resistance lies at 0.7425/30 ahead of the more solid level seen at 0.7440.

The dailies look less certain about a continuation of the move higher and if the current strength dissipates, minor support is seen at Friday’s low of 0.7366 and at 0.7350, ahead of the stronger 0.7330 level. Back below the 9 May low of 0.7328 would find little to hold the Aud up until 0.7300 and the rising trend support, at 0.7285, although this seems unlikely to be seen today. If wrong, a break of 0.7285 would see little support until 0.7160, so worth watching. Being short is still preferred, looking for a near term rally towards 0.7400 to sell into, with a SL placed above 0.7425. Today could be another one of consolidation though and 0.7365/0.7420 may once again cover it. Buying dips towards 0.7365, looking for a run above 0.7400, or alternatively, selling into strength, with a SL placed above 0.7430 may be a plan for Monday. There is a bit of data due today, including the China Retail Sales, so we could see some volatility.

24 Hour: Prefer to sell rallies Medium Term: Neutral – Mildly bearish
                                         Resistance                                         Support
0.7468 (61.8% of 0.7555/0.7328) 0.7366 Friday low
0.7440 (50% of 0.7555/0.7328) 0.7350 Minor
0.7425 5 May high/8 May high 0.7330/28 (50% pivot of 0..6826/0.7835)/ 9 May low
0.7415/20 (38.2% of 0.7555/0.7328) /Friday high 0.7298 (76.4% of 0.7160/0.7750)
0.7400 Minor 0.7285 Rising trend support

Economic data highlights will include:

M:  Home Loans, Investment Lending for Homes, China Retail Sales, Urban Investment, Industrial Production

T:  New Motor Vehicle Sales, RBA Minutes

W: WBC Consumer Confidence, Leading Index, Q1 Wage Price Index

T:  Unemployment, China House Price Index

F:


NZDUSD: 0.6856

The Kiwi continued to consolidate above the trend lows, seen on Thursday, following the sharp selloff after the RBNZ Meeting.

The momentum indicators are mixed and further choppy trade could lie ahead today on Monday The initial support will arrive at Friday’s low of 0.6826, and below the 11 May low of 0.6817would find Fibo support at around 0.6805. A break of 0.6800 would then allow a move to 0.6780 and eventually lower, and at some stage I suspect that we are going back to the 27 May 2015 low of 0.6675.

On the topside, resistance will be seen at 0.6870 and then again at 0.6900/05 although this looks doubtful today. Selling rallies is preferred. NZ Retail Sales due shortly.

24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
Resistance Support
0.6960 (61.8% of 0.7052/0.6817) 0.6826 Friday low
0.6950 10 May high 0.6817 11 May low
0.6934 (50% pivot of 0.7052/0.6817) 0.6803 (50% pivot of 0.6125/0.7485)
0.6905 (38.2% of 0.7052/0.6817) 0.6780 (61.8% of 0.6347/0.7485)
0.6870 (23.6% of 0.7052/0.6817) /Friday high 0.6750 Minor

Economic data highlights will include:

M: NZ Retail Sales

T:  Global Dairy Trade Index

W: Q1 PPI,

T: NZ Visitor Arrivals

F:

By | May 15, 2017
Source: FXCharts

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