8 Nov: Forecast: FX: US$/Majors + trade ideas: FXCharts

EURUSD: 1.1588
Preferred Strategy:  EurUsd has had another heavy session as it resumed the slow drift lower which commenced after the last ECB meeting.In the short term, the Euro has recovered from a low of 1.1553, and with the 1 and 4 hour momentum indicators looking mildly positive a squeeze back towards 1.1600+ would not really surprise, possibly heading towards 1.1630 although I doubt that we see it up here today unless US yields take a tumble.

On the downside, support will be seen at 1.1550 and then again at 1.1500/10 below which there is little support until 1.1475/80.

As before, as long as the Euro should hold below 1.1675 on a daily-close basis, with the eventual target being at around 1.1250, pretty much in line with the 200 DMA and if we do see a daily close below 1.1570 at any stage we may begin to see an acceleration to the downside, to where 1.1510 will be the next support.

A topside break of 1.1675 would trigger stops and could see a run back to 1.1700 where the 100 DMA will provide stern resistance, but above there could see a bigger squeeze towards 1.18000. At this stage this looks doubtful. As long as we don’t see a daily close above 1.1700, I prefer to trade from the short side.

Sell EurUsd @ 1.1670 & @ 1.1700. SL @ 1.1730, TP @ 1.1500.

24 Hour: Prefer to sell rallies Medium Term: Mildly Bearish
FX Charts Position: Short  – Looking  to add to the position into strength
Resistance Support
1.1686/90 3 Nov high /(38.2% of 1.1879/1.1574) 1.1570 Rising trend support
1.1675 H.S. Neckline 1.1553 Session low
1.1623/30 6 Nov high (23.6% of 1.1879/1.1653) 1.1525 Minor
1.1615 Session high 1.1510 Rising trend support/(38.2% of 1.0570/1.2091)
1.1600 Minor 1.1478 20 July low

Economic data highlights will include:

EU Non –MP Meeting Minutes, EIA Crude Oil Stocks Weekly Change

USDJPY: 113.88
Preferred Strategy:  US$Jpy had another choppy day either side of 114.00 and much the same looks to be in store today although the downside may come into focus if the US 10 yield breaks below its 200 DMA at 2.300 which it is currently sitting on. The technical outlook remains unchanged, and the short-term momentum indicators still look mixed/flat so a fairly nimble stance is required, with further choppy trade either side of 114.00 looking possible over the next couple of days.On the downside, support will be seen at the rising trend support/session low at 113.70 and at 113.50, below which could then head back to the 31 Oct low (112.95) although this seems unlikely today. If wrong, a sustained break of 113.00 would see us back in the previous 112/113 range, where 112.75 would be the first level of support ahead of 112.30.

On the topside, minor resistance now lies at 114.35/45 and above, towards the 114.73 6th Nov high, but above which could see a test of the descending trend resistance, currently at around 114.90. A break of 115.00 would then see little resistance until 115.20 and then 115.50.

I remain fairly neutral, although I still like the dollar in the medium term and prefer to buy dips.

24 Hour: Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
114.95 Descending trend resistance 113.70 Session low/Rising trend support
114.73 6 Nov high 113.53 2 Nov low
114.45 Minor 113.30 Minor
114.33 Session high 113.15 Minor
114.00 Pivot 112.95 31 Oct low/(23.6% of 107.31/114.73)

Economic data highlights will include:                                                                 

Trade Balance, Current Account, Machinery Orders, Foreign Bond/Stocks Investment

GBPUSD: 1.3166
Preferred Strategy: After a dip to 1.3108, Cable has recovered well and finished the day just below the highs of 1.3277.The short-term momentum indicators look mildly positive although the dailies remain in neutral, so a cautious stance is required although a break of nearby resistance at 1.3175/80 would then allow for a run towards 1.3225/50.

On the downside, minor support will be seen at 1.3150 and then at 1.3135, below which could see a run back to 1.3100/10 and the 6 Nov low of 1.3057 although this looks unlikely.

Stay neutral for the time being although the mild preference is to look for levels to buy dips. A rally in the dollar though would probably negate this outlook, so caution is required.

24 Hour: Prefer to buy dips Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
1.3300 Minor 1.3135 100 HMA
1.3250 (76.4% of 1.3320/1.3042) 1.3125 Minor
1.3235 Minor 1.3108 Session low
1.3215 (61.8% of 1.3320/1.3042) 1.3080 100 DMA
1.3177/80 Session high /(50% of 1.3320/1.3042) 1.3060 Rising trend support

USDCHF: 1.0000
Preferred Strategy: US$Chf had another choppy session, closing in the middle of the range, at right on parity, with more of the same likely for Wednesday.The short-term momentum indicators are neutral, while the dailies are looking slightly heavy and may signal a minor decline towards support at 0. 9940/50 and then again at 0.9890/9900 over the coming days although I don’t think we head back here today.

With the weekly momentum indicators generally looking positive though, further dollar strength could be in store down the track and if we can take out the session highs, we could then head on to take another look at 1.0040. Above this there is little to hold the dollar up ahead of 1.0100, and beyond that to 1.1025 and 1.0170.

For now, look for the dollar to chop around current levels and possibly to head a little lower, but with the view of buying dips for an eventual move towards 1.1000+.

Buy US$Chf @ 0.9960. SL @ 0.9885, TP @ 1.0085.

24 Hour: Mildly Bearish – Prefer to buy dips Medium Term: Prefer to buy dips
FX Charts Position: Long – Looking to add on dips.
Resistance Support
1.0123 (76.4% of 1.0343/0.9420) 0.9968 Session low
1.0099 11 May high 0.9946 3 Nov low
1.0036/37 27 Oct high /1 Nov high 0.9941 31 Oct low
1.0028 6 Nov high 0.9920 Minor
1.0018 Session high 0.9890 (23.6% of 0.9420/1.0037)

AUDUSD: 0.7640
Preferred Strategy: The Aud has had a choppy session, under pressure ever since the port-RBA spike to 0.7700, currently sitting above the lows of 0.7627, at 0.7640.While the short term momentum indicators look mildly supportive for a possible squeeze up towards 0.7665/75, the longer term charts look heavy and a break of 0.7625 would bring fresh selling, which could then see a run towards 0.7600 and eventually to 0.7570. Direction today will come from the China Trade Balance although there is little out apart from that and it may be a day of consolidation within the 0.7625/80 area.
24 Hour: Neutral  – Prefer to sell rallies Medium Term: Neutral –Mildly Bearish
FX Charts Position:    Short   SL @ 0.7705
Resistance Support
0.7729 2 Nov high 0.7626/30 Session low (61.8% of 0.7328/0.8124)
0.7700 200 DMA/Session high 0.7624 27 Oct low
0.7685 Minor 0.7600 Minor
0.7675 200 HMA 0.7585 Minor
0.7650 Minor 0.7570 7 July low

Economic data highlights will include:

China Trade Balance

NZDUSD: 0.6904
Preferred Strategy: The Kiwi traded a choppy session within the recent parameters, on Tuesday seeing 0.6890/0.6953, and with the downside not helped by the Milk Auction (GDT PI -3.5%, WMP -5.5%).With the daily charts still looking mildly positive, further positive momentum could take the Kiwi towards the session highs, above which would allow for a run to 0.6960/70 and then back to 0.7000 although this seems unlikely today.

On the downside, a move back below 0.6890 could see a retest of 0.6875, below which could then see a return to 0.6850. Under there would find strong support at 0.6830 and again at 0.6817, where we have the double bottom with the May low. Below that though would then find that there is little support ahead of 0.6670 although I don’t think we head anywhere close for the time being.  Don not forget the RBNZ tomorrow.

24 Hour: Neutral Medium Term: Neutral
FX Charts Position: Flat
Resistance Support
0.7000 Psychological 0.6890 Session low
0.6970 (38.2% of 0.7210/0.6817) 0.6873 6 Nov low
0.6960 (23.6% of 0.7434/0.6817) 0.6850 Minor
0.6953 Session high 0.6832/30 30 Oct low /31 Oct low
0.6930 Minor 0.6817 11 May low/27 Oct low

By | November 8, 2017
Source: FXCharts

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