1 July: Trend table outlook for FX, Commodities, Indices

By | July 1, 2019

Monday morning sees a gap higher in US$Jpy and in AudUsd, and all the related crosses, on the back of the mildly upbeat tone coming from the G20 meeting. Elsewhere, stocks are yet to open  on Monday although they may blip higher once they do, as may WTI, underpinned by comments from President Putin, who has said that Russia has agreed with Saudi Arabia to extend the deal with OPEC on reducing oil output, but note that an OPEC Meeting takes place later today, with any headlines likely to dictate the next direction for oil. Oil is opening as I write – and WTI is currently at 59.50 Gold is also just opening up – and has fallen heavily in very early trade, from the Friday close of 1409 to currently sit at 1391m creating a $20 chart gap. Silver has followed Gold’s lead and is currently sitting at 15.18, down from the Friday close of 15.30.

EurUsd:  The Euro was untouched by the G20 meeting and is static, at 1.1360 in early Monday trade. The short term momentum indicators look mixed, and while the 4 hour charts look a little heavy the dailies remain supportive, so it may be that we see further consolidation. Technically, intraday support will once again be seen at the 200 DMA at 1.1350, and then again nearby, at 1.1340 (23.6% of 1.0306/1.0411) and 1.1295 (38.2% of 1.0306/1.0411). On the topside, resistance will be seen at 1.1400 and then at the Tuesday high of 1.1411, beyond which the next target is at 1.1447 (20 March high), which ties in with (23.6% of 1.2555/1.1106) and beyond that would open up 1.1460 (76.4% of 61.8% of 1.1569/1.1105) and 1.1500. I remain neutral on EurUsd and further choppy trade looks likely, with the Euro hindered on the topside by ongoing EU economic weakness but at the same time, with a Fed rate cut looming, the US$ will find it equally difficult to make any positive progress.

US$Jpy: US$Jpy has gapped up to 108.30 in early Monday trade, creating a short term chart gap with the Friday close of 107.90. Although this gap will require filling, the 4 hour charts still look mildly positive and we are now above the initial Fibo resistance of 108.10 (23.6% of 112.40/106.78) and the 27 June high  of 108.16. Further gains may be slow as the pair is now trading back within the month-long, choppy, sideways price action that goes all the way up to 108.80. The next Fibo level is seen at 108.90 (38.2% of 112.40/106.78) although that seems pretty safe for now, but above which would open the way to 109.00 and higher, with minor resistance seen at 109.15. Minor support now lies at  107.90/108.00 and then at 107.65/55(200/100 HMA) , 107.35 and at 107.00, below which buyers would be seen at 106.75/80 but if this ever gives way there are only minor support levels at 106.50 and106.20 ahead of the next Fibo level at 105.98 (76.4% of 104.00/112.40).  Given the positive look of the 4 hour charts and the possible basing formation in the dailies, trading the US$ from the long side seems favourable although I suspect that the upside from here will be slow. Buy dips.

AudUsd:  The Aud closed on its highs on Friday and has gapped even higher at the Monday opening, currently trading at 0.7030 following the G20, with the likelihood of a day of consolidation ahead of tomorrow’s RBA Meeting at which a rate cut is being largely priced in. All very confusing right now but the charts still look positive and further positive progress may be in store, despite the RBA outlook. If so, the initial resistance will be seen right ahead, at the 100 DMA at 0.7035 and then at 0.7065 (61.8% of .07205/0.6831)and the 200 DMA at 0.7105. On the other hand, the short term momentum indicators look a little toppish and are becoming overbought. On the downside, with the 1 hour charts also showing some bearish divergence, support should now arrive at 0.7020 (chart gap), 0.7000 and at 0.6985/90 (23.6% of 0.6831/0.7034/rising trend support) ahead of more distant Fibo levels at  0.6955 and 0.6930. I am neutral at present and not looking for too much either way today but, in looking for an RBA rate cut tomorrow, I prefer to look for levels to sell the Aud.

NzdUsd: The Kiwi is opening the week above both the 100 DMA and the 200 DMA, and with the daily charts pointing strongly higher, further gains may lie ahead. There is not too much resistance ahead of 0.6760 (61.8% of 0.6938/0.6481) and then 0.6810 (38.2% of 0.7438/0.6481) although the Kiwi has come a long way quite quickly, and with the 4 hour charts seemingly on the point of turning lower we could see a dip that may provide a buying opportunity. Support should arrive at 0.6700, 0.6780 and at 0.6665 (23.6% of 0.6486/0.6724).

Gold:  having made a 6 year high at 1439 last Tuesday, it closed the week at 1408 and has opened Monday sharply lower, at 1392. The daily charts look very toppish and further downside momentum would not now surprise, with targets being at 1376 (38.2% of 1275/1439) and to 1365 below which there is not a whole lot to stop it heading towards 1355/50. While the daily charts look rather overbought and turning lower, the weekly charts looking positive and in the longer term, they seem to be building momentum for a move higher. Right now, the chart gap between 1395/1408 needs to be filled although this looks unlikely today. If 1410 can be regained at any stage, then further resistance would arrive at 1424 ahead of the new 6 year high of 1439. A break of that, currently a long way off, would then look towards 1450 (12 May ’13 high), and beyond that there is little in the way of 1481 (50% pivot of 1921/1048) and even to 1500.

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*Trade of the day: July 1, 2019; 8:27 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 @1.1400. SL @ 1.1440, TP @ 1.1310

Buy EurUsd @ 1.1300. SL @ 1.1275, TP @ 1.1400

Sell AudUsd @ 0.7040. SL @ 0.7060, TP @ 0.6980

Buy AudUsd @0.6975. SL @ 0.7040, TP @ 0.6945

Sell Gold @ 1410. SL @ 1425, TP @ 1375