17 May: Forecast: FX: US$/Majors

EURUSD: 1.1089

The Euro broke several important resistance levels on Tuesday before pulling up just shy of 1.1100 and closing near the highs. The mixed data coming from the US leaves the chances of a June rate hike in the balance and if the EU data remains solid then we might see the Euro make further gains in the days ahead.

Right now, the short term momentum indicators are becoming overbought following the strong move higher but the daily/weekly charts do appear to be picking up some steam, and if 1.1100 gets taken out there really is not too much to stand in the way of a move to 1.1200/10, and beyond there, to the November spike high of 1.1300. On the downside, support will be seen at the various Fibo levels of the move up from the recent 1.0838 low. Right now, buying dips seems to be the plan and all eyes today will be on the EU CPI, where a firm reading would see the Euro make further gains (exp 0.4% mm, 1.9% yy). There is nothing due from the US today.

24 Hour: Prefer to buy dips Medium Term: Prefer to buy dips
                                          Resistance Support
1.1210 (23.6% of 1.3993/1.0340) 1.1035 (23.6% of 1.0838/1.1096)
1.1180 Minor 1.1020 Minor
1.1140 Minor 1.0995 (38.2% of 1.0838/1.1096)
1.1120 Minor 1.0965 (50% of 1.0838/1.1096)
1.1100 Minor 1.0940 (61.5% of 1.0838/1.1096)

Economic data highlights will include:

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

USDJPY: 113.00

US$Jpy is heavy on Tuesday, in line with the broadly softer dollar but is currently holding on above 113.00.

The short term momentum indicators look a little negative on Wednesday, while the dailies also appear to be rolling over, so if 112.85/113.00 does give way look for a move towards 112.40/50 and then possibly towards 112.00/10..

On the topside, minor resistance will be seen at the 200 HMA, ahead of the session high of 113.78 and the 15 May high of 113.85 and again at 114.00. Above 114.00 could see a quick return to the trend high of 114.36 although this looks unlikely today, but beyond which would not see too much to stop the dollar heading on to 114.85 and then to 115.00+ although not yet.

With the momentum indicators generally looking a little heavy, selling rallies may now be the best option.

24 Hour: Prefer to sell rallies Medium Term: Neutral.
                                         Resistance Support
114.36 10 May high 113.00 100 DMA
114.05 Minor 112.92 Session low
113.85 15 May high 112.85 (23.6% of 108.12/114.36)/Daily cloud top
113.65 100 HMA 112.40 Minor
113.40 200 HMA 112.10 Minor

Economic data highlights will include:

Machinery Orders, Industrial Production, Capacity Utilisation

GBPUSD: 1.2919

Cable was rangebound on Tuesday, trading either side of 1.2900 (1.2865/1.2956), and it may be the same again on Wednesday given the lack of direction seen in the charts although any surprise from the UK jobs data may create some waves (exp 4.7%, Claimant Count: +7.5K).

On the downside, 1.2900 will continue to act as a pivot ahead of the session low of 1.2865. Back below here could then see a move back to the 12 May low of 1.2844, to 1.2830 (4 May low) and possibly to 1.2800/10.

On the topside, back above the session high 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, although if the dollar does stay under pressure, Cable may decide that it wants to play catch-up with the Euro, which might mean a stronger test of 1.3000.

24 Hour: Neutral Medium Term:  Neutral
                                         Resistance           Support
1.3035 (38.2% of 1.5017/1.1821) 1.2864 Session low
1.3000 Weekly cloud base 1.2844 12 May low
1.2985/88 55 WMA /8 May high/10 May high 1.2830 4 May low
1.2956 Session high 1.2805 26 Apr low
1.2930 Minor 1.2780 (23.6% of 1.2108/1.2987)

Economic data highlights will include:

UK Unemployment

USDCHF: 0.9850

US$Chf has now given up all of the strong gains seen last week and is closing Tuesday at almost the session lows of 0.9846.

Although the daily momentum indicators are showing little hint either way, the short term momentum indicators are pointing sharply lower and if we do head lower, then the March lows of 0.9830/13 are not so far away. Under here though there is then little support to be seen until we reach 0.9735 and 0.9705.

On the topside, if we can regain 0.9900/05, which looks unlikely right now, minor resistance will be seen at 0.9930, ahead of 0.9945 and eventually parity although that looks increasingly distant..

With the short term momentum indicators now becoming oversold we may see a topside squeeze, but looking to sell into any rally towards 0.9900 seems to be the plan. SL @ 0.9945, TP @ 0.9750.

24 Hour: Prefer to sell rallies Medium Term: Neutral
                                         Resistance Support
0.9943 (38.2% of 1.0100/0.9846) 0.9830 28 Mar low
0.9930 Minor 0.9813 27 Mar low
0.9905 (23.6% of 1.0100/0.9846) 0.9785 Minor
0.9885 Minor 0.9735 (76.4% of 0.9549/1.0343)
0.9865 Minor 0.9705 Rising trend support

AUDUSD: 0.7430

AudUsd had a choppy session on Tuesday but generally held above 0.7400 and finished towards the higher end of the range (0.7437).  While the short term momentum indicators look mixed, the dailies a starting to look a little more constructive, so further upside tests may be in store, with direction today to be dictated by the WBC Consumer Confidence, Q1 Wage Price Index.

Technically, the 1 and 4 hour charts look pretty much neutral, but if we do head higher we could see another test of 0.7445, beyond which could head on to  0.7470 and then to the minor descending trend resistance at around 0.7490 and the next Fibo level at close to 0.7500.

On the downside, minor support is seen at 0.7395/0.7400 and at the 15 May low of 0.7384. Below this would open the way to the 12 May low of 0.7366 and 0.7350 (minor), 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 for a while.

With the dailies appearing to be turning a little higher, buying dips seems to be the plan right now, but I would keep stops fairly tight, at around 0.7380.

24 Hour: Prefer to buy dips Medium Term: Neutral
                                         Resistance                                         Support
0.7502 (76.4% of 0.7555/0.7328) 0.7395 Session low
0.7490 Descending trend resistance 0.7384 15 May low
0.7468 (61.8% of 0.7555/0.7328) 0.7366 12 May low
0.7445 15 May high 0.7330/28 (50% pivot of 0..6826/0.7835)/ 9 May low
0.7437 Session high 0.7298 (76.4% of 0.7160/0.7750)

Economic data highlights will include:

WBC Consumer Confidence, Leading Index, Q1 Wage Price Index

NZDUSD: 0.6888

A choppy session either side of 0.6900 has left all the momentum indicators looking pretty neutral, meaning that the outlook is unchanged.

Below the session low of 0.6862 and the 15 May low of 0.6851,  the initial support will arrive at 12 May’s low of 0.6826, although that looks fairly safe right now. If wrong, below the 11 May low of 0.6817 would find Fibo support at around 0.6805. A break of 0.6800 would then allow a move to 0.6780 and eventually lower.

On the topside, minor resistance will be seen at 0.6900/05 and then again at 0.6915/20. Neutral.

24 Hour: Prefer to sell rallies Medium Term: Neutral
Resistance Support
0.6960 (61.8% of 0.7052/0.6817) 0.6886 Session low
0.6950 10 May high 0.6851 15 May low
0.6934 (50% pivot of 0.7052/0.6817) 0.6826 12 May low
0.6917 15 May high 0.6817 11 May low
0.6905 Session high 0.6803 (50% pivot of 0.6125/0.7485)

Economic data highlights will include:


By | May 17, 2017
Source: FXCharts

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