16 Apr: Forecast: FX: US$/Majors + trade ideas: FXCharts

On the downside, support will arrive at 1.2300/05 and then at 1.2260/50, where the rising trend support should remain strong support.  Having tried and failed to break below this trend support trend support last week in trading down to 1.2215, this area will also remain strong support. This looks likely to hold for a while although a break could then head towards Fibo/100 DMA support at 1.2170/75. Below there would target 1.2085 and possibly 1.2025 although this remains over the horizon for now.

As before, I remain fairly neutral while this choppy trade persists, but given the speculative long Euro positioning, I still mildly prefer the downside in the medium term and would look to sell rallies towards the top end of the current range. Right now it seems that we are likely to just chop around within the existing range- Something like 1.21/1.25 – but going nowhere fast. US Retail Sales  in focus today

On the downside, buyer will be seen at 107.20 (Friday low/Daily cloud base) and at 107.00 ahead of good support at 106.55/65, below which could see a reverse towards 106.20, 106.00, and possibly towards the 3 April low of 105.68 although this seems unlikely right now.

As before, if stocks turn sharply lower again, probably taking US$Jpy along for the ride despite the currently positive medium term indicators, a move back below the 200 MMA (105.60) would open the way to 105.30, a break of which would allow a return to 104.60. Below that, there is little to support the dollar until 103.50 – This currently looks well beyond the horizon, and overall, while the dailies remain positive, I prefer to be trading from the long side and looking to buy dips.

Buy US$Jpy @ 106.80. SL @ 106.45, TP @ 107.80

Overall, while I mildly prefer the topside in the days ahead – given the outlook on the daily charts – I suspect some choppy trade today may see a dip to the downside, and would look to buy Sterling sub 1.4200 for an eventual test of 1.4300, and above.

An interesting point from Bank of Tokyo-Mitsubishi UFJ who say that Cable has risen every April for the past 13 years by an average 2.3%. It is currently up 1.7%.

The longer term momentum indicators still look pretty much neutral, but if we do see a turn higher, then above 0.9635/40 we will then run into the strong resistance at the 200 DMA (0.96550 and then at the 200 WMA (0.9680) and I doubt that we see this tested today, but think it will happen eventually.

If we head back below 0.7750/45 today, further support would arrive at 0.7735 and 0.7720 below which could revisit 0.7705/95 (10 April low – 0.7693) although this currently seems unlikely. Further out, the Aud has found a medium term base in the 0.7645/50 range (9 April low – 0.7651), and this needs to be taken out in order to allow further downside progress towards the next major level, at 100 WMA (0.7625). Below this would then move towards the major rising trend support from January 2016, at 0.7590, although that may take a while.

Sell AudUsd @ 0.7810. SL @ 0.7845, TP @ 0.7700

Now near the top end of the recent range I prefer to sell into strength, but with a stop placed on new short positions above 0.7440.

If the Kiwi does continue its run higher, the initial, minor resistance will arrive at around 0.7375 ahead of Fridays high of 0.7395. I don’t thing=k we head back up here today, but if wrong look for a run above 0.7400, where we could eventually see a run towards the 16 Feb high at 0.7436, albeit not today.

Sell NzdUsd @ 0.7415. SL @ 0.7445, TP @ 0.7315