29 Oct: Trend table outlook for FX, Commodities, Indices

By | October 29, 2019

The positive outlook towards some type of trade agreement between the US/China has put safe-haven assets on the back foot, with the Jpy, Chf  and the metals under some downside pressure, while stocks look increasingly positive. Otherwise, everything looks to be on hold while awaiting the outcome of Wednesday’s FOMC Meeting. The action there is not really so much about a move in rates at this meeting, with a 25bp cut now pretty much fully priced in, but on whether the forward outlook and communication of future rate settings justifies additional cuts or whether this month’s cut is the end of the easing cycle. We shall see, but on balance it would seem that the Fed will continue with its view they will do everything to keep the expansion going, but further cuts are likely to be data dependant.

For now, the FX markets look pretty much on hold, although US$Jpy looks mildly positve, as does AudUsd, so buying AudJpy may be a short term plan and may make a bit of upside progress as long as the positive trade headlines underpin the price action.

Otherwise, the charts are mixed and give very little directional hint, and given another thin calendar today, look for a rangebound session in most assets, so pick a range and go with it.

AudJpy – Daily


*Trade of the day: October 29, 2019; 9.00am  (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 @ 1.1125. SL @ 1.1145, TP @ 1.1065

Buy EurUsd @ 1.1065. SL @ 1.1035, TP @ 1.1120

Sell AudUsd @ 0.6855. SL @ 0.6875, TP @ 0.6780

Buy AudUsd @ 0.6810. SL @ 0.6785, TP @ 0.6860


EurUsd:  The Euro is back at 1.1100 and leaves us with a neutral stance while awaiting the FOMC Meeting, Wednesday.. The short term momentum indicators look mixed today and it could be a rather tight, rangebound session ahead. Below the Monday low of 1.1075 would target 1.1063 (38.2% of 1.0878/1.1179), below which would allow for a run to 1.1028 (50%) and to 1.1000/1.0992 (61.8%). On the topside, minor resistance will be seen right where at 1.1100/05 ahead of the Friday high of 1.1122 and 1.1130 (100 DMA). Beyond here may be unlikely today but further offers would arrive at 1.1150 and then at the 24 Oct spike high at 1.1162. Further out, back above 1.1180, could then head towards the 61.8% of 1.1411/1.0878//200 DMA at 1.1203, which should see plenty of sellers if/when we get there but currently looks unlikely.  As with yesterday, in the absence of any major data today a rangebound session would not really surprise, but note that  with just 3 trading days left in October, the monthly chart is eyeing a bullish reversal, and if EurUsd ends the month above 1.1109 (September high), we may see further Euro gains. Worth watching.


US$Jpy:   finally made it to a new trend high by taking out the previous top at 108.93 and then heading on to the major resistance seen at 109.05 (200 DMA). This has yet to be overcome, but as long as risk sentiment remains positive, further upside progress would then open the way to 109.30/35, which will also be strong resistance if/when we get there (1 August high, 61.8% of 112.40/104.45). Further out, we may look towards 109.92 (30 May high) and, above 110.00, to 110.50 (76.4%). On the downside, the initial support now lies nearby at 108.90 and then at 108.70/75. I doubt we go back under here today but if wrong, look for a further decline towards 108.40/50, below which minor support would be seen at 108.25 (21 Oct low), at 108.15 (15 Oct low) and to 108.05 (38.2% of 106.48/109.03) and then to 107.95 (23.6% of 104.45/109.03).


AudUsd:  Having traded with a heavy bias in early Monday trade, the Aud$ has regained its poise by squeezing back up to a session high of 0.6845, before easing back a little into the end of the session.  The momentum indicators do look slightly more positive today and resistance will again be seen at 0.6845 and then again at 0.6855 (100 DMA).  If we break above here, doubtful today, we could then see another test of the 22 October high at 0.6882, which is likely to remain strong (0.6876/78 (50% of 0.7081/0.6770/Daily cloud top), but above which could then stretch to the 12 September high at 0.6894 and eventually to 0.6925 (61.8% of 0.7081/0.6770).  On the downside, support will be again seen at 0.6810/15, and although unlikely today, further downside momentum would see a sterner test of 0.6800 (38.2% of 0.6670/6879), below which would then look towards 0.6785 (minor), 0.6775 (50%) and then to 0.6750 (61.8%) and to 0.6720 (76.4%). We really need to see a daily close below 0.6810, where the daily cloud base lies to add confidence t further downside momentum but that remains some way off at this stage. Use 0.6815/70 as a range today.


NzdUsd: The Kiwi looks heavy again on Tuesday, although after falling to a low of 0.6333 it has managed a small bounce and currently sits at 0.6350, but still below the base of the daily cloud (0.6352). Further weakness could now allow a run towards the 0.6333 low (0.6337 = 50% of 0.6240/0.6435), to 0.6315 (61.8%) and to 0.6285 (76.4%) although this seems unlikely for today. On the topside, back above the daily cloud base would then allow a run towards 0.6375/80 (200/100 HMAs), and then towards 0.6400. Above here, unlikely today, would then target the 23 Oct high at 0.6425, 0.6435 (22 Oct high) and then the 12th Sept high, at 0.6450. Look for 0.6370/0.6320 to cover it today, with a preference to sell rallies.