| EURUSD: 1.2374 |
| EurUsd is finishing on session lows, unable to take any real advantage of Draghi’s upbeat outlook on the EU or the solid ISM data as traders all watched the action in the stock markets. | |||||
| 1 hour/4 hour indicators:Turning lower | Daily Indicators: Possible topping formation | Weekly Indicators: Turning higher | |||
| Preferred Strategy: The momentum indicators are still indecisive, with the short term charts looking neutral but possibly pointing slightly lower. The dailies remain positive but are becoming overbought and show increasing signs of topping out so, overall, I prefer to trade from the short side, looking to sell into rallies.On the downside, below today’s low of 1.2382 will find little support until we reach the 29 Jan low of 1.2335 and the Fibo support at 1.2305. A break of 1.2300 would then allow a move towards 1.2225 although this is a long way off yet.
With the weekly charts still looking positive, and the dailies yet to confirm the turn lower, further dollar strength may be short lived, and buying any dips in the Euro may still be the medium term trade. If so, back above the session high of 1.2475 would then target 1.2520 and 1.2538, beyond which, would open the way to 1.2590. A cautious stance is currently required although I do favour selling into rallies towards 1.2430/50 as I think a look at 1.2300 is not too far away. |
|||||
| Resistance | Support | ||||
| 1.2521/17 | 2 Feb high /2 Feb high | 1.2363 | 2 Feb low | ||
| 1.2500 | Minor | 1.2336/34 | 28 Jan/29 Jan low | ||
| 1.2474 | Session high | 1.2305 | (23.6% of 1.1553/1.2538) | ||
| 1.2430 | 200 HMA | 1.2270 | Minor | ||
| 1.2400 | Minor | 1.2215 | Minor | ||
Economic data highlights will include:
German Factory Orders, US Trade Balance, API Weekly Crude Oil Stock Inventory
…
| USDJPY: 109.10 |
| US$Jpy rallied to 110.28 after the strong ISM data but then collapsed to 109.00 late in the day as stocks continued to capitulate. | |||||
| 1 hour/4 hour indicators:Turning lower | Daily Indicators: Neutral –Turning higher. | Weekly Indicators: Neutral | |||
| Preferred Strategy: All will depend on the direction of stocks, but things do not look healthy for US$Jpy and on the downside, support will be seen at the minor Fibo levels at 109.00 and 108.80, below there, if we head back below the 31 Jan low of 108.59 it may be that we see a return towards the 29 Jan low of 108.40, below which would head to the 26 Jan low of 108.27. A break of this would then find little to hold the dollar up until rising trend support at 107.50 and the 2017 low at 107.32.On the topside, resistance will be seen at 109.50 and at 109.80. It does not seem that we head above 110.00 today so leave stops on shorts above here, or ideally above the day’s high of 110.28. | |||||
| Resistance | Support | ||||
| 110.35 | (38.2% of 111.38/108.27) | 109.09/00 | (61.8% of 108.27/110.47)/Session low | ||
| 110.28 | Session high | 108.80 | (76.4% of 108.27/110.47) | ||
| 110.00 | Minor | 108.40 | Minor | ||
| 109.80 | Minor | 108.28 | 26 Dec low | ||
| 109.80 | Minor | 108.00 | Minor | ||
…
| GBPUSD: 1.3961 |
| Sterling fell hard late in the day, breaking below 1.4000 to trade down to 1.3963, not helped by the weak PMI data, which came 2 days ahead of the BOE meeting. Rates expected to remain on hold. | |||||
| 1 hour/4 hour indicators:Down | Daily Indicators: Turning lower. | Weekly Indicators: Up | |||
| Preferred Strategy: As we said last week, in the bigger picture, Cable remains very choppy and is probably best left alone right now. The short term momentum indicators though look heavy and I suspect a run towards 1.3900 and even to 1.3850 may be on the cards so prefer to be short. Look to sell rallies towards 1.4030/50 with a SL at just above 1.4100. | |||||
| Resistance | Support | ||||
| 1.4110 | Minor | 1.3954 | Session low | ||
| 1.4080 | Minor | 1.3915 | Minor | ||
| 1.4055 | Minor | 1.3900 | Minor | ||
| 1.4035 | Minor | 1.3885 | Minor | ||
| 1.4000 | Minor | 1.3845 | (38.2% of 1.3075/1.4345) | ||
…
| USDCHF: 0.9306 |
| US$Chf climbed to 0.9375 before giving up some of the gains as safe have demand for the Chf set in, to finish at 0.9325. | |||||
| 1 hour/4 hour indicators:Turning higher | Daily Indicators: Down – Possible basing formation | Weekly Indicators: Turning lower | |||
| Preferred Strategy: As before, the dailies may be basing out and could be turning higher so buying dips is now favoured although some caution is warranted incase safe haven demand for the Chf sets in big-time. Overall I prefer $strength as a likely outcome.The 4 hour charts look positive, and on the topside, resistance will be seen at 0.9375 and then at 0.9385/90, a break of which could see the dollar carry on to the 26 Jan high 0.9430. Given the positive momentum of the 4 hour charts, buying dips for the next 24 hours is mildly preferred, with a SL placed tight under 0.9250. Below there would be precarious as there is a black hole until around 0.9150 although I think we are safe for now..
Buy US$Chf @ 0.9290. SL @ 0.9240, TP @ 0.9415 |
|||||
| Resistance | Support | ||||
| 0.9475 | Minor | 0.9320 | Minor | ||
| 0.9448 | 25 Jan high | 0.9300 | Minor | ||
| 0.9420 | (23.6% of 0.9977/0.9250) | 0.9286 | Session low | ||
| 0.9392 | 29 Jan high | 0.9250 | 2 Feb low | ||
| 0.9375 | Session high | 0.9210 | Minor | ||
…
| AUDUSD: 0.7878 |
| After reaching a session high of 0.7953, the AudUsd fell heavily late in the day to close just above the US low of 0.7878. We now wait on the December retail sales (exp 0.3%) and RBA outcome. No change expected. watch the statement. | |||||
| 1 hour/4 hour indicators: Down | Daily Indicators: Down | Weekly Indicators: Neutral – Turning higher | |||
| Preferred Strategy: The Aud found no friends again on Monday and in closing on its lows it looks as though there is more downside to come this week, with much depending on the RBA today. The initial support is at around 0.7880 but under there, there is little to be seen until 0.7845/50 and then again at 0.7815/20. On the topside, resistance will be seen at 0.7950, 0.7975 and 0.8000.Right now selling rallies is preferred.
Sell AudUsd @ 0.7925. SL @ 0.7975, TP @ 0.7815 |
|||||
| Resistance | Support | ||||
| 0.8000 | Psychological | 0.7892/89 | (38.2% of 0.7502/0.8135)/Session low | ||
| 0.7975 | Minor | 0.7875 | Minor | ||
| 0.7950/53 | Daily Kijun /Session high | 0.7847 | 12 Jan low | ||
| 0.7935 | Minor | 0.7817 | (50% of 0.7502/0.8135) | ||
| 0.7925 | Minor | 0.7800 | Minor | ||
Economic data highlights will include:
New Home Sales, Trade Deficit, Trade Balance, Retail Sales, RBA Interest Rate Decision
By February 6, 2018
Source: FXCharts