5 Sept: Trend table outlook for FX, Commodities, Indices

By | September 5, 2019

There is plenty of green on the map today as the risk outlook seems to turn a little more positive, helped in part by the Government back down on the HK situation, and also by Brexit, where a no-deal divorce now seems to have been ruled out. This has underpinned Cable, which looks a whole lot better on the charts and seems to have further upside against both the US$ and also on the crosses. The US$ also looks to be under some pressure against the Euro, Aud$ and Nzd$, which all seem capable of building on yesterday’s gains. US$Jpy on the other hand looks relatively bid and further upside momentum may develop although I think that if trading the Jpy, doing so on the crosses may be a better bet, with EurJpy, AudJpy and NzdJpy all looking positive.

In other markets, stocks and WTI are both volatile, and while they currently look bid, I think there are easier trades. The metals seem likely to head higher although the short term momentum indicators are now overbought and may be running out of steam so I would be waiting for a dip before entering the market.


*Trade of the day: September 5, 2019; 8:26 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 @ 1.1090. SL @ 1.1115, TP @ 1.1000

Buy EurUsd @ 1.0990. SL @ 1.0950, TP @ 1.1100

Sell AudUsd @ 0.6825. SL @ 0.6855, TP @ 0.6750

Buy AudUsd @ 0.6770. SL @ 0.6740, TP @ 0.6850

Buy NzdUsd @ 0.6330. SL @ 0.6295, TP @ 0.6385

Buy Gold @ 1535. SL @ 1520, TP @ 1575

Sell Gold @ 1570. SL @ 1585, TP @ 1525


 EurUsd:   The Euro has continued to recover from Tuesday’s low of 1.0925, currently at 1.1030, and with the short term momentum indicators looking positive I suspect that further gains could lie ahead. If so, minor Fibo resistance sits right ahead, at 1.1048 (23.6% of 1.1249/1.0925) ahead of 1.1065/70, 1.1087 (50% pivot 1. 1249/1.0925) and 1.1100/10 (38.2% of 1.1411/1.0925). Above here would then target 1.1125(61.8% of 1. 1249/1.0925) and the 26 August high of 1.1163 but which seems unlikely to be visited again for a while. On the downside, support will be seen at 1.1000, 1.0965/70 and then at 1.0940/50 ahead of the 1.0925 low. Below that opens the way to 1.0900 and to 1.0860 (76.4% of 1.0340/1.2555), below which there is a chart gap that would take us to 1.0772. Buying dips, with a SL placed below 1.0990 may be the plan for today.

US$Jpy:  had another choppy day but ended towards the highs, currently at 106.35 after squeezing up from an earlier low of 105.82, with the pair underpinned by  improving risk sentiment. The outcome once again leaves us in neutral as more of the same looks likely today while awaiting tomorrow’s US employment data. Above the session high, offers would arrive at 106.50/55 ahead of 106.67 (28 Aug high) and again at the recent highs at 106.70/76 (23/15 Aug highs), beyond which would then head to the 13 Aug high of 106.97. Above 107.00 would open the way to 107.26 (2 Aug high) and to 107.45 (61.8% of 109.31/104.44) ahead of 108.00 and even 108.15 (76.4) albeit unlikely in the near term.  On the downside, the initial support now sits at 106.00 below which would allow a return to 105.75/85 and the 27 August low of 105.59. Further bids would arrive at 105.50, at 105.15 and at 105.00 (all minor). Beneath 105.00 there would again be little support ahead of the 26 August, 104.44 low and then the January flash-crash low (104.01). A choppy sideways session seems likely, probably again confined to 106.00/50.

AudUsd:  The Aud$ has squeezed higher following the Q2 GDP figures and the charts once again look constructive, suggesting that we could  see a squeeze above 0.6800 towards the 8 August high of 0.6821, beyond which would run into Fibo resistance at 0.6830 (38.2% of 0.7081/0.6675), 0.6878 (50%), 0.6900 and then at 0.6926 (61.8%). On the downside, minor support will be seen today at 0.6775, 0.6750/55 and at 0.6725/30 although we are unlikely to revisit these levels for a while. If wrong, look for a return to 0.6700/05, below which would open the way back to 0.6688, where we have a minor double bottom – 3 Sept/26 August lows – and which comes ahead of 0.6675 (7 Aug low). Further out, below 0.6675, there is minor support at 0.6660, but under there would open the way to 0.6500 and, further out, the next major Fibo level is not seen until 0.6250 (76.4% of 0.4773 (April 2001)/1.1082 (July 2011)). I suspect that we may see another mild squeeze to the upside today, although in the medium term I still think that the Aud$ will suffer because of the trade war/recession concerns, so I still prefer to sell rallies for the medium term move to new lows.

NzdUsd: having made a new multi year low at 0.6269 on Tuesday, the Kiwi has continued to squeeze higher, currently at 0.6360. After forming a bullish key-day reversal o Tuesday, I suspect that here are further gains to come, at least in the near term. If so, the initial resistance will arrive at 0.6390 (23.6% of 0.6789/0.6269) and then at 0.6400, (23 Aug high), beyond which would allow for a run towards 0.6428 (20 Aug high) and to 0.6445(23.6% of 0.6789/0.6340). On the downside, 0.6330 will now see decent bids ahead of 0.6300 and then at the trend low of 0.6270, which looks pretty safe right now. Below this, the next meaningful support is seen at the September 2015 low at 0.6235, while more distant bids would arrive at the August 2015 low at 0.6125.  With the short term momentum indicators currently looking more constructive, I suspect that buying dips is once again the near term plan although, in the longer term, I still think we have plenty of downside potential.