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

By | April 26, 2019

Ahead of today’s upcoming US GDP figure the US$ remains well underpinned although the strong US durable goods orders was unable to provide any real momentum and the DXY is off the new trend high of 98.32, currently at 98.16. Elsewhere, the markets have been mostly choppy/sideways on Thursday, although WTI reversed from its new trend high, seen on Tuesday, and now looks rather toppish.

A neutral stance is probably wise heading into Friday’s US GDP figure but the overall theme of looking to buy dollars on dips remains in place. In that same vein, in looking for further medium term US dollar strength against tall the other majors, I like to sell the metals on rallies, while WTI is beginning to look increasingly heavy. Stocks are tricky and need to take out the week’s trend highs to gain added momentum, but right now they look rather mixed, so a neutral stance is required.

EurUsd:  EurUsd is lower again today and currently sits at 1.1130, above the session low of 1.1116, and in line with 1.1125 (20 June 2017 low). The short term momentum indicators are mixed although the medium term charts point towards further losses, with downside targets now being at 1.1100 and 1.1060/65, where the base of the descending wedge should see decent bids. A downside break would then open the way to 1.1020 (minor) and to 1.1000. On the topside, resistance will be seen at 1.1162 (Thursday session high), 1.1175 (Minor) and 1.1200.

The DXY (98.16) is accelerating higher, and with the daily chart looking positive, further gains would see a run towards 98.80, where the top of the rising wedge lies and then towards 100.10 (76.4% of 103.82/88.25). On the downside, support will be seen at the previous resistance, 97.85 (61.8% of 103.82/88.25) and then at 97.50 although this seems some way off. Buying dollars on dips is the plan.

US$Chf: US$Chf has spent the last couple of days in choppy consolidation below the 27 month high, seen at 1.0230 on Tuesday.  While the short term momentum indicators are mixed, the medium term charts seem positive, so a break of 1.0230 would open the way to the next target 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 1.0160/70 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 down to 0.6988, from here we have seen a bit of a bounce to 0.7015 and a neutral session now looks likely ahead of the US data although the Australian Q1 PPI may create a couple of waves. The short term momentum indicators actually look mildly positive and with the market now quite short, a topside squeeze would not really surprise as position squaring sets in ahead of the important US data. If so, the points to watch would be at 0.7020/25 and then at 0.7039 (23.6% of 0.7206/0.6988), 0.7050 (Minor) and 0.7070 (38.2% of 7206/0.6988). The medium term charts remain heavy though and eventually I think the current low will give way for a run towards 0.6970, 0.6950 and eventually to 0.6900. I prefer to sell rallies in anticipation of the inevitable rate cut, but we may see better levels to do so.

NzdUsd: The Kiwi has made a new trend low at 0.6580 although a bounce currently sees trade at 0.6630, which previously acted as decent support (61.8% of 0.6423/0.6969). As with AudUsd, the short term momentum indicators look positive and so a run towards 0.6660 would not really surprise (23.6% of 0.6938/0.6580), beyond which would open the way to 0.6690 and possibly to 0.6715 (38.2%). On the downside, support will be seen at 0.6600 and 0.6580, and it would take a strong US GDP number to take out the lows today I suspect. If wrong, look for a run towards 0.6560 (January flash crash low) and eventually to the long term rising trend support, from March 2009, at 0.6500 – as per the chart below.

US$Jpy: had another choppy session but after having made a new 4 month high of 112.39 on Wednesday the overall price action has reversed lower in reaching 111.36 on Thursday ahead of a bounce to currently sit at 111.60. I do not have too much of a view on this pair although if risk-sentiment turns lower, then the downside would come back into play with targets being at 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 topside, resistance will again be seen at 112.00 (200 WMA) and at 112.40. Further targets would then be at 112.50/60 and eventually ay 113.05 (61.8% of 118.61/104.01) although this is a long way off.

I will look at stocks, metals, oil next week but prefer to be square today ahead of the US data.


*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 @1.1170. SL @ 1.1205, TP @ 1.1150

Buy EurUsd @ 1.1080. SL @ 1.1045, TP @ 1.1150

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

Sell AudUsd @ 0.7045. SL @ 0.7075, TP @ 0.6970

Sell Gold @ 1285. SL @ 0.1297, TP @ 1250