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

By | October 30, 2019

There is a lot of blue on the table today as traders stand aside while waiting on the FOMC outcome due late in the session.

The FX markets look pretty much on hold, with the exception of the Aud$, which appears to be building some constructive momentum against both the US$ and also on the crosses. Further directional bias will be provided by the Q3 CPI later this morning where a trimmed-mean reading of 0.4%qq is expected and will provide some guidance of what the RBA may do at the November 2 meeting.

The FOMC will be the real action though, with the focus on the forward guidance of the Fed. For that reason there are no trade ideas today and I would be square going into the meeting.


EurUsd:  Having now made a minor double bottom at 1.1072, the Euro is back at 1.1100 and leaves us with a neutral stance while awaiting the FOMC Meeting, later today.. The short term momentum indicators look mixed today and it could be a rather tight, rangebound session ahead until the FOMC result is known. The dailies look pretty much neutral so a cautious stance is required. Below the minor double bottom would target 1.1063 (38.2% of 1.0878/1.1179), beneath 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 here at 1.1118 and at the Friday high of 1.1122 ahead of 1.1130 (100 DMA). Beyond here, 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 we said yesterday, note that  with just 2 trading days left in October, the monthly chart is hinting at a bullish reversal, and if EurUsd ends the month above 1.1109 (September high), we may see further Euro gains in November, so worth watching. Be square into today’s Fed announcement.


US$Jpy:   having made it up to the major resistance seen at 109.05 (200 DMA), US$Jpy has since consolidated just below 109.00 while waiting on the Fed. This has yet to be overcome and the daily charts are giving little directional hint, 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 108.70/75, below which, look for a further decline towards 108.40/50, and to minor support 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:  The Aud$ appears to be regaining its poise, after looking a little heavy earlier in the week, by squeezing back up to a session high of 0.6871, before easing back to 0.6865 into the end of the session, but now above the 100 DMA (0.6850).  The momentum indicators look positive today although the next directional move is going to depend on the outcome of the Q3 CPI. Resistance will be seen at the session high, above which 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 now be seen at 0.6850, 0.6840/45 and at 0.6810/15 (daily cloud base/ 24,25, 28 Oct lows.), while further downside momentum would see a sterner test of 0.6800 (38.2% of 0.6670/6879). If we get back below 0.6800, we could then see a move back to 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, and in the meantime it looks more likely that the Aud could see a break to the topside. 0.6880/0.6900 is likely to be strong resistance though.


NzdUsd: The Kiwi has traded a range of 0.6338/75 on Tuesday but it was unable to hang on to its early gains and a neutral stance is now required as it sits at similar levels to yesterday, on the base of the daily cloud.  On the downside, support will be seen at 0.6333/38 lows (0.6337 = 50% of 0.6240/0.6435),  a break of which would then head towards 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 another run towards 0.6370/80 (100/200 HMAs), and then towards 0.6400. Above here would then target the 23 Oct high at 0.6425, 0.6435 (22 Oct high) and then the 12th Sept high, at 0.6450. A neutral stance is best today but 0.6320/0.6400 seems likely to cover it into the FOMC.