4 July: Forecast: FX: US$/Majors: FXCharts

Economics/ Politics/Central Banks:
EU PMI manufacturing finalised at 57.4 in June, revised up from 57.3. UK PMI manufacturing dropped to 54.3 in June, down from 56.3 below expectation of 56.3.
US ISM June manufacturing index: 8 vs 55.2 expected.
US ISM Manufacturing Employment Index: Jun 57.2 vs 53.3 expectation, 53.5 prev
May Construction Spending 0.0% v expectations of +0.3%
Currencies:
The US$ recovered against all its counterparts after the solid US manufacturing data, in particular making good headway against the Yen, reaching a new 6 week high.
The DXY turns higher for first day in five and has the market re-thinking last week’s policy convergence theme after the UK PMI missed expectations while the US data was generally solid.

EURUSD: 1.1365

24 Hour Outlook: Neutral		Medium Term: Mildly Bullish
Preferred 24-hour Strategy: The Euro was unable to overcome the major descending trend resistance seen at 1.1450, and has headed lower, to finish Monday at 1.1365, ahead of the US holiday. Expect a quiet session ahead. Back below 1.1350 could see a slide to 1.1300, possibly to 1.1280, but buying dips still seems to be the plan given the positive look of the longer term momentum indicators.On the topside, a break of 1.1445/50 would target the May 2016 high of 1.1616 although this seems rather unlikely today. Look for 1.13/1.14 to contain it today.
Resistance		Support
1.1500	Minor	1.1354	Session low
1.1480	Minor	1.1320	(38.2% of 1.1117/1.1445)
1.1445	Descending trend resistance/29 June high/29 June high	1.1300	Minor
1.1426	Session high	1.1285	(50% of 1.1117/1.1445)
1.1395	100 HMA	1.1242	(61.8% of 1.1117/1.1445)

Economic data highlights will include:

US Independence Day Holiday, ECB Praet Speech, EU PPI, API Weekly Crude Oil Stock Inventory

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USDJPY: 113.37

24 Hour Outlook: Prefer to buy dips		Medium Term: Mildly Bullish
Preferred 24-hour Strategy: US$Jpy was a one way street on Monday underpinned by the combination of higher US rates/stocks and a weakened Abe following the weekend Japanese election results. Further upside progress looks likely and a sustained break of 113.45/50 would open the way to 113.85 and possibly to 114.35. Bids look likely to emerge ahead of 113.00 and buying dips is favoured although it may be a quiet session given the NY holiday.
Resistance		Support
114.35	10 May high	113.10	Minor
114.00	Minor	112.90	Minor
113.85	15 May high	112.60	Minor
113.70	Minor	112.35	(23.6% of 108.80/113.45)
113.45	Session high	112.05	Minor

Economic data highlights will include:

Markit Services PMI

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GBPUSD: 1.2942

24 Hour Outlook: Neutral		Medium Term: Neutral
Preferred 24-hour Strategy: Cable was unable to hold on above 1.3000, not helped by the soft UK data in trading down to 1.2930. The momentum indicators are mixed but possible short term weakness looks possible, which would find support at 1.2910 (Daily cloud top) but below which could run to 1.2860. On the topside, resistance will be seen at 1.2880, 1.3000 and again at 1.3022, the session high, although this seems unlikely to be seen on Tuesday. The Inflation Report Hearing will be in focus today.
Resistance		Support
1.3047	18 May high	1.2931	Session low
1.3022	Session high	1.2925	(23.6% of 1.2588/1.3029)
1.3000	Pivot	1.2910	Daily cloud top
1.2975	Minor	1.2860	(38.2% of 1.2588/1.3029)
1.2950	Minor	1.2810	(50% of 1.2588/1.3029)

Economic data highlights will include:

UK Construction PMI, Inflation Report Hearing

…

USDCHF: 0.9636

24 Hour Outlook: Neutral		Medium Term: Neutral
Preferred 24-hour Strategy: US$Chf is a little higher, at 0.9630, with the short term momentum indicators hinting at a run towards 0.9680, possibly 0.9700. On the downside, support will be seen at 0.9600 and again at 0.9550/55. A range trade session of 0.9600/0.9680 seems most likely today.
Resistance		Support
0.9750	Descending trend resistance	0.9600	Minor
0.9730	Minor	0.9585	Minor
0.9700	Minor	0.9555/52	Session low/29 June low
0.9680	(23.6% of 1.0099/0.9555)	0.9548	9 Nov low
0.9642/47	Session high/28 June high	0.9521	23 June ’16 low

…

AUDUSD: 0.7659

24 Hour Outlook: Prefer to sell rallies		Medium Term: Neutral
Preferred 24-hour Strategy: The Aud was heavy through the Monday session, finishing the day at 0.7660, close to session lows, ahead of today’s Retail Sales (exp +0.2% m/m, prior +1%) and RBA Meeting. No change to policy is expected so the statement will drive any directional move.On the topside, resistance will be seen at 0.7680/85 and again at 0.7700/10. A break of 0.7710 suggests a run to 0.7730 and then on to 0.7750 although this now seems unlikely for a while. The short term momentum indicators are pointing a little lower, to where support should arrive at 0.7645/50 and 0.7630 and then at 0.7600/10. Until the RBA a neutral stance is required. The daily momentum indicators may be building a topping formation so selling rallies is mildly preferred although I remain cautious.
Resistance		Support
0.7749	21 Mar high	0.7643	Session low
0.7725	Descending trend resistance	0.7630	(23.6% of 0.7373/0.7710)
0.7711	29 June high	0.7610	200 HMA
0.7700	Pivot	0.7600	Minor
0.7685	Minor	0.7580	(38.2% of 0.7373/0.7710)

Economic data highlights will include:

Retail Sales, RBA Interest Rate Decision/Statement

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NZDUSD: 0.7293

24 Hour Outlook: Prefer to sell rallies		Medium Term: Neutral
Preferred 24-hour Strategy: The Kiwi seems to be building a topping formation although the price action is very choppy and difficult to get a handle on. I prefer to sell rallies with a SL placed above 0.7350. The NZIER and then, later, the Global Dairy Trade Index will drive any directional move today.
Resistance		Support
0.7402	8 Nov high	0.7272	Session low
0.7380	Minor	0.7265	200 HMA
0.7360	Minor	0.7253	28 June low
0.7344/45	Session high/29 June high	0.7220	(23.6% of 0.6816/0.7343)
0.7325	Minor	0.7193	22 June low

Economic data highlights will include:

NZIER Business Confidence (Q2), Global Dairy Trade Index

By Jim Langlands | July 4, 2017