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

By | October 31, 2019

The FOMC result has done little provide any real directional bias in any of the asset classes and a lot of blue remain on the heat map, suggesting further indecision. Interestingly, the DXY (US$ Index) does look heavy on all time zones and this may see the dollar stay under some downside pressure.  If so, the Euro and the Aud$ would seem to be the main possible beneficiaries of any further US$ weakness.

Note that UsdCnh looks heavy on the longer term charts, with a US/China trade deal likely to underpin the Cnh so selling dollar rallies may be a plan here.

On the crosses, AudJpy seems to have further upside potential but there is little real directional bias elsewhere.

Stocks and commodities are in neutral, and further choppy trade seems likely.


*Trade of the day: October 31, 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 @ 1.1170. SL @ 1.1205, TP @ 1.1085

Buy EurUsd @ 1.1095. SL @ 1.1055, TP @ 1.1190

Sell AudUsd @ 0.6915. SL @ 0.6945, TP @ 0.6850

Buy AudUsd @ 0.6855. SL @ 0.6835, TP @ 0.6925



EurUsd:  The FOMC outcome has seen some choppy price action around the 1.1100 pivot, but the pair has ended the session with a slightly stronger Euro, which is currently testing resistance at 1.1150. With the momentum indicators looking mildly positive, we could see further gains towards targets at the 24 Oct spike high at 1.1162 and then to the 21 October high of 1.1178, beyond which, we could then head towards the 61.8% of 1.1411/1.0878//200 DMA at 1.1198/1.1203, which should see plenty of sellers if/when we get there.  As we said before, note that today is the last trading day in October and the monthly chart is hinting at a bullish reversal. If EurUsd ends the month (today) above 1.1109 (September high), we may see further Euro gains in November, although the base of the monthly cloud and the monthly Tenkan will provide decent resistance at 1.1200, so worth watching. On the downside, support will be seen at 1.1100 ahead of the session low of 1.1080 which comes ahead of a minor double bottom at 1.1072. . Below here 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%). Overall, I think the choppy conditions will continue but for the time being we seem to have a mild upside bias.


US$Jpy:   seems to have made a false break higher, breaking above 109.05 (200 DMA) to reach 109.27 before falling back sharply during the FOMC Press Conference, and US$Jpy currently sits at 108.85. The momentum indicators currently look mixed, so a neutral stance remains intact, but if the US$ can find its feet, further upside progress, above the 109.27 high,  would find further strong resistance at 109.30/35 (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 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). Neutral.


AudUsd:  The Aud$ has now found a base at 0.6850 (100 DMA), which was tested during the FOMC Press Conference, ahead of a run up to the current levels at 0.6895, where the Aud has met the 12 September high at 0.6894.The momentum indicators look positive and if the resistance at current levels can be overcome we can look for a run towards 0.6922 (61.8% of 0.7081/0.6770), 0.6935 (Descending trend resistance) and to the 200 DMA, currently at 0.6955. On the downside, support will now be seen at 0.6878 (Daily cloud top), 0.6860/70 and then at 0.6850, but which seems unlikely to be seen today. If wrong, further bids would arrive at 0.6840/45 and at 0.6810/15 (daily cloud base/ 24, 25, 28 Oct lows, 38.2% of 0.6670/6899), while further downside momentum would see a sterner test of 0.6800. Right now, the bias seems to be to the topside, but we would run into major resistance above 0.6925, and further positive momentum would likely diminish.


NzdUsd: The Kiwi fell to 0.6332 as the FOMC press conference started, but then reversed sharply and it currently sits at 0.6385. The price action is very choppy and a cautious stance is required, but the momentum indicators look positive and a test of 0.6400 looks imminent. If we do break above 0.6400, this would open the way to the 23 Oct high at 0.6425, to 0.6435 (22 Oct high) and then to the 12th Sept high, at 0.6450.  On the downside, support will be seen at 0.6350 (minor) and then again at the 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.