24 Apr: Trend table outlook for FX, Commodities, Indices

By | April 24, 2019

The US$ and stocks are generally higher on Wednesday, along with oil which continues its march towards the 70.00 technical target. In the FX markets, the Chf is the weakest and continues to be a decent sell – and I think is giving us a clue as to the direction of the dollar. The commodity bloc looks weak ahead of today’s Australian CPI – and then later the Bank of Canada Monetary Policy meeting. The metals seem under medium term pressure – which should gain momentum if – as expected – the dollar heads higher. Stocks seem set on taking out the all-time highs.

EurUsd:  EurUsd is a little lower today although it has bounced off the session low of 1.1192, but still seems mildly heavy. If so, on the downside below 1.1200/1.1190, would again find support at 1.1175, a break of which would increase the negative momentum, for a run towards targets likely to be at 1.1125 (20 June 2017 low), and eventually at 1.1100 and 1.1065. On the topside, resistance will be seen at 1.1255/60 ahead of 1.1280 and 1.1300. This seems unlikely to be revisited today, but if wrong, above 1.1300, would then allow a run to 1.1320/25 and maybe to 1.1345 (100 DMA/61.8% of 1.1447/1.1182) and eventually to.1.1385 (76.4%). Although momentum is weak I prefer to be long US$, and would therefore look for areas to sell the Euro. A break of 97.70/87 in the DXY (currently 97.60) would allow the dollar to accelerate higher – possibly quite sharply. Today briefly saw a breach of the triple top resistance by trading at 97.78, but the Fibo resistance at 97.83 is the big deal I suspect (61.8% of 103.82/88.21). Beyond there, look for 98.45 and possibly on towards 100.00 – albeit a long way off right now.

US$Chf: As we said before, US$Chf seems to be telling us something about future US$ strength, in rising strongly while the other pairs have been mostly choppy, and has today reached a 27 month high at 1.0230. The momentum indicators seem positive, with the next target being at 1.0248 (11 Jan 2017 high), beyond which opens the way to 1.0320 (Jan 2017 high). Above that, do not stand in the way of the dollar as there is very little to stop it heading to 1.0720 (200 MMA).  On the downside, support will be seen at 1.0160 and 1.0125 (both minor), ahead of 1.0100 (38.2% of 0.9894/1.0230) and 1.0060(50% of 0.9894/1.0230). Prefer to buy dips.

 AudUsd: Has traded with a heavy bias ahead of today’s Australian CPI data, beyond which Australia will have another bank holiday (ANZAC Day) tomorrow. A poor CPI figure would test support at Tuesday’s low of 0.7081, below which would open the way to 0.7050 and then back toward the early March lows at 0.7002.  On the topside, resistance will still be seen at minor Fibo levels from the recent 0.7206 high, arriving at 0.7110, 0.7128 and 0.7145 ahead of 0.7155 (200 HMA). The market seems to have set itself up for a poor number, so the risk could be to the topside. Even so, I prefer to sell rallies.

NzdUsd: The Kiwi has made a new trend low in meeting support at 0.6630 (61.8% of 0.6423/0.6969) and currently sits at 0.6650. The momentum indicators look heavy and on a break of the Fibo support, the Kiwi may want to take a look at 0.6600 and eventually to 0.6560 (January flash crash low). On the topside, minor resistance will be seen at 0.6670 and at 0.6700 (23.6% of 0.6938/0.6630) , above which could then extend to the 200 DMA at 0.6730, although this is now some way off With the dailies looking increasingly negative, selling rallies seems the best plan.

US$Jpy: had a choppy session but at the end of Tuesday trade it is only 15 points below 112.00/200 WMA, which is acting as a magnate for now. There is little change in the technical outlook, with the 200 WMA sitting at 111.92, with a sustained break of 112.10/15 needed to push on towards 112.50/60 and then to 113.05 (61.8% of 118.61/104.01). If stocks continue their rally, taking yields higher as confidence grows, then expect the upside to come under pressure. On the other hand, if risk sentiment were to deteriorate, then we are likely to see a return to Tuesday’s spike low of 111.65 and possibly towards 111.58 ((23.6% of 109.70/112.16). Beyond there would open the way towards 111.20(38.2% of 109.70/112.16) and to 111.00, and under here would lead to 110.80/75 – 100 WMA.

On the crosses, a neutral stance is mostly required although EurChf almost reached the 1.1485 (38.2% of 1.2000/1.1160) target, in making it to 1.1475. Beyond 1.1485 would open the way to 1.1500 and then to 1.1580 (50%), and eventually to 1.1680 (61.8%). Buying dips is favoured, with support likely to be seen at 1.1400, 1.1360 (minor) and at the previous downtrend resistance seen at 1.1300.

AudNzd still looks firm in the medium term, targeting last week’s high of 1.0732 and eventually towards 1.0780/1.0800 although the 100 WMA/200 WMA have converged at 1.0750 and will provide very strong resistance. The short term momentum indicators look a bit heavy, in which case, support should arrive at 1.0625 (23.6% of 1.0275/1.0732) ahead of 1.0600 and 1.0555(38.2%). in the short term, the cross looks a little heavy, which may provide a dip to buy into. Today’s Australian CPI may provide the appropriate catalyst.

Elsewhere, the AudJpy and NzdJpy both look heavy, and may be a sell on a rally if we see one.

The most interesting charts are still in Gold and Silver where, as we said before, where the possibility of a head/shoulder top remains in place with good potential downside momentum for both.  Both had a tough session, with Silver down by around 1%. The neckline for Gold is at 1285 and I would not want to see it back above there, while the downside target is seen at 1218.  Above 1285/90 could see a sharp squeeze back to 1300/10. In the meantime stay short. Silver has tested its own neckline on Tuesday, although it has so far held.  On a break of 14.80, the downside potential is at around 13.85oz. Keep SL above the 200 DMA, currently at 15.00

Stocks: had a strong session, up around 0.5%-0.8%, with the SP/Nasdaq reaching an all-time high. With further big hitting reports due today (AT&T, Boeing, Caterpillar, Microsoft, Facebook) further gains may be expected and we are into blue sky territory. As before, the dailies are showing a degree of bearish divergence but the weeklies remain positive and the near term targets are, in the S+P at 2940 and in the DJI at 26950. We need to hold above rising trend support in order to maintain the upside momentum, but right now that seems to not too much of an issue, although the Boeing results are likely to prove risky, given the recent plane crashes that will have an impact on the results. Trading from the long side is the plan given the strong upside momentum in the weekly charts.

WTI: is up another 1% on the back of the latest US/Iran stouche and the weekly charts remain positive. The daily charts are hinting at  a degree of bearish divergence so a cautious stance is required, but the major uptrend will remain intact as long as 61.80 holds, roughly in line with the 200 DMA. Ahead of that, minor trend support now lies at around 64.65.  Resistance at 66.00 has now been overcome, which now allows for a move towards 66.77 (50% pivot of 107.65/26.03) and then to 68.00 and more importantly to 68.65 (76.4% of 76.8742.23). This is unlikely to be seen immediately although as we said previously, the S/H/S target is at 70.00.  I would not be chasing it up here, but I prefer to buy dips near 65.00, but with a tight SL in place below 64.00.


*Trade of the day: April 24, 2019; 8:29 AM(AET)                               

*This is a personal opinion only, based on the look of the table below, and carries no guarantee of success.

All trades are good till 5.00pm NY time. All “in the money trades” should have the SL raised to break-even, or managed manually. All “out of the money trades” should keep original SL in place.

Sell EurUsd @1.1250. SL @ 1.1280, TP @ 1.1150

Buy EurUsd @ 1.1140. SL @ 1.1115, TP @ 1.1200

Buy US$Chf @ 1.0160. SL @ 1.0260, TP @ 1.0090

Sell AudUsd @ 0.7145. SL @ 0.7175, TP @ 0.7070

Sell Gold @ 1280. SL @ 1297, TP @ 1250

Sell Silver @ 14.95. SL @ 15.15, TP @ 14.15

Buy WTI @ 65.00. SL @ 63.70, TP @ 66.50