26 May: Forecast: FX: US$/Majors: FXCharts

EURUSD: 1.1210

EurUsd traded a tight 1.1193/1.1250 range on Thursday, leaving the outlook unchanged.

While the dailies still look constructive, the short term momentum indicators are now mixed and it may be that Friday will be another choppy session, with little to drive direction until the US session, when the GDP and Durable Goods Orders may provide some volatility. On the topside, resistance will be seen at 1.1250 and then at the previous 23 May/trend high of 1.1268. Beyond there, there is little to stop it heading back to 1.1300, and above that, 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).

On the downside, good support will once again be seen at 1.1160/65, below which could see a run back towards 1.1100 and then towards 1.1080 and 1.1050.

A range trade day seems to lie ahead although the dailies may be in the early process of forming a top, while the 4 hour charts look a little heavy, so selling into strength with a SL placed above 1.1270 may be a plan.

24 Hour: Possible range trade Medium Term: Neutral
                                          Resistance Support
1.1326 8 Sept high 1.1193 Pivot
1.1300 9 Nov high 1.1167 24 May low
1.1280 Minor 1.1165/60 (23.6% of 1.0838/1.1262)/22 May low
1.1268 22 May high 1.1140 Minor
1.1249 Session high 1.1100 (38.2% of 1.0838/1.1262)

Economic data highlights will include:

US Provisional GDP (Q1), Durable Goods Orders (Apr), Michigan Consumer Sentiment Index (May), Baker Hughes Oil Rig Count, G7

USDJPY: 111.82

US$Jpy has had a rangebound session (111.46/95) leaving the outlook unchanged.

The momentum indicators are mixed/neutral on Friday and another choppy rangebound session within the 111/112 area would not surprise. While the dailies remain rather negative, the 4 hour charts may be hinting at a mild squeeze to the topside, and further short term gains could see another move towards 112.00/10 and then to 112.30, albeit possibly not today, and then to 112.75, which might be a decent sell area if we get there.

On the downside, below 111.45, there is little to prop the dollar up until 111.00, a break of which would lead to 110.85 and 110.60 ahead of last Thursday’s low of 110.23.

24 Hour: Range Trade Medium Term: Prefer to sell rallies
                                         Resistance Support
112.77 (61.8% of 114.36/110.23) 111.47 24/May low/Session low
112.55 Minor 111.00 Minor
112.30 (50% of 114.36/110.23) 110.85 23 May low
112.12 24 May high 110.57 200 WMA
111.95 Session high 110.23 17 May low

Economic data highlights will include:

Japan CPI

GBPUSD: 1.2937

Cable has had a choppy, rangebound session (1.2931/1.3015) leaving the outlook unchanged, but is finishing towards its lows, not helped by the weak Q1 GDP reading of -0.2% (exp +0.3%).

The momentum indicators are mixed/neutral on Friday, possibly with a mildly negative tone, and back below the session low would allow a move back to the good band of support between 1.2890/1.2910, below which could return to the distant 16 May low of 1.2865.

Back above 1.3000, and the session high of 1.3015, would find strong resistance in the 1.3035/45 area, capped by last Thursday’s, 8-month high of 1.3047, but above which could run towards strong offers at 1.3075, and then further out, towards the long descending term trend resistance at around 1.3120. A break of this looks important and could lead to a quick run towards 1.3270 although that remains to be seen.

As with yesterday, a neutral stance is required today although I mildly prefer to trade from the short side, looking to sell rallies towards 1.3000, with a SL placed above 1.3050.

24 Hour: Neutral – Prefer to sell rallies Medium Term:  Neutral
                                         Resistance           Support
1.3120 Descending trend resistance 1.2931 Session low
1.3075 (23.6% of 1.7191/1.1821) 1.2914 19 May low
1.3047 18 May high 1.2900 Minor
1.3033 23 May high 1.2888 18 May low
1.3014 Session high 1.2965 16 May low

USDCHF: 0.9729

US$Chf remains choppy but at this point is holding on above 0.9700, after a tight range of 0.9700/38).

The 4 hour charts now look pretty neutral, possibly pointing slightly higher, and on the topside, back above 0.9740  would open the way to 0.9775/85, above which could see a run back to 0.9800/10. Back above here would then run towards 0.9845, although possibly not today.

The dailies though still point to further medium term weakness, and on the downside, good support should be seen at 0.9700, but below 0.9690 would then open the way back to 0.9675 and to 0.9600/40 although this looks unlikely to be seen today.

Selling rallies towards 0.9775, with a SL placed above 0.0.9800 could be a plan.

24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
                                         Resistance Support
0.9845 (38.2% of 1.0100/0.9691) 0.9700 Session low
0.9825 15 May high 0.9691 22 May low
0.9804 19 May high 0.9675 Minor
0.9786 (23.6% of 1.0100/0.9691) 0.9635 Minor
0.9775 24 May high 0.9600 Minor

AUDUSD: 0.7455

AudUsd fell back below 0.7500 in Europe and headed to a low of 0.7450 in the US session finishing towards its lows.

Technically, the short term charts now point towards further losses although the dailies still look constructive, so a cautious stance is required.

We really need to hold on to 0.7435/40 today or the Aud could head back towards 0.7400/10 and to the recent lows at 0.7384/88. 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.

On the topside, minor resistance will be seen at 0.7480 and at 0.7500 ahead of the 23 May high of 0.7517. Above here would then look for a run towards 0.7540/45 and eventually to 0.7555.

For Friday, a neutral stance is required, although with the positive look of the dailies, buying dips may be the theme.  Below 0.7435 though would suggest a deeper decline.

24 Hour: Neutral Medium Term: Neutral
                                         Resistance                                         Support
0.7545 3 May high 0.7450 Session low
0.7538 (50% of 0.7750/0.7328) 0.7442 24 May low
0.7525 Minor 0.7435 22 May low
0.7515/17 Session high/23 May high 0.7407 19 May low
0.7480 Minor 0.7388/84 17 May low/15 May low

NZDUSD: 0.7020

The Kiwi has had a choppy session (0.7015/54) but at this stage is holding on above 0.7000.

The short term momentum indicators though are starting to look a bit heavy, and on the downside, a break of 0.7000 could take us back to the 24 May low of 0.6988, below which would see a run to 0.6965 and possibly to 0.6940.

A squeeze to the topside could we could see another run towards 0.7150, a break of which would open the way to the March highs at 0.7072 and then 0.7095, above which, the 200 DMA lies at 0.7105.

Although the short term momentum indicators look heavy, the dailies remain positive so a cautious stance is warranted. I prefer to sell into strength though, with a SL placed above the 100 DMA, or ideally above 0.7070.

24 Hour: Prefer to buy dips Medium Term: Neutral -Cautiously bullish.
                                         Resistance Support
0.7160 (61.8% pivot of 0.7375/0.817) 0.7015 Session low
0.7105 200 DMA 0.7000 (23.6% of 0.6817/0.7058)
0.7090/95 21 Mar high/(50% pivot of 0.7375/0.817) 0.6988 24 May low
0.7072 22 Mar high 0.6965 (38.2% of 0.6817/0.7058)
0.7054 Session high/100 DMA 0.6938 (50% pivot of 0.6817/0.7058)

By | May 26, 2017
Source: FXCharts

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