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

By | October 1, 2019

The US$ looks firm on the charts today and I think there is probably more to come as the Euro begins to look increasingly heavy on the charts. US$Chf also looks strong and reached levels last seen in June today and appears to have the legs to break above parity now, so buying dips is preferred. The direction of the Aud$ will depend on the RBA and the charts look mixed but I prefer to remain short.

The other action today appears to be in the commodities where Gold, Silver and WTI all seem to have further downside potential although the short term momentum indicators are oversold so looking to sell into near term rallies seems to be the plan.

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*Trade of the day: October 1, 2019; 7:25 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 @ 1.0935. SL @ 1.0980, TP @ 1.0830

Buy EurUsd @ 1.0840. SL @ 1.0810, TP @ 1.0920

Sell AudUsd @ 0.6780. SL @ 0.6815, TP @ 0.6700

Buy AudUsd @ 0.6680. SL @ 0.6650, TP @ 0.6745

Sell Gold @ 1480. SL @ 1500, TP @ 1440

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As we said before, Gold now looks headed for 1430, so selling rallies is preferred, with a SL placed above 1490.

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EurUsd:  The Euro has now taken out the option defense at 1.0900, in trading down to 1.0885 ahead of a mild bounce, to currently sit back at 1.0900. The charts look increasingly heavy though and on a break below 1.0885, the next target will be at 1.0860(76.4% of 1.0340/1.2555), Under here, the 23 April 2015 low is at 1.0820, a break of which will find a weekly chart gap that would take us to 1.0775. On the topside, the Monday high was at 1.0947 and lies just ahead of  last Friday’s/Thursday’s highs at 1.0957/66 which will add up to provide strong resistance ahead of a possible return to 1.1000/08 (23.6% of 1.1411/1.0885). Although unlikely, a steeper topside squeeze would then allow for a run towards 1.1040/50 and then possibly to the September 18/19 highs at 1.1072/75. Selling rallies does seem to be the way to go today, with a SL placed above 1.0975.

 

US$Jpy:  squeezed higher for the 4th  session in a row on Monday, now above 108.00, just, but so far unable to take out 108.20.. The momentum indicators look a little mixed today and another choppy session may be in store, at close to current levels, but above 108.20 would allow for a run back to 108.45/50, which successfully capped the previous rally. Above 108.50 would open the way towards 109.00 and to the 1st August high at 109.31 although this seems some way off. On the downside, support will be seen at the 100 DMA at 107.80, below which could revisit 107.40 (Thursday low) and to 106.95 (Wednesday low). I am neutral on US$Jpy and would suggest something like 107.80-108.40 for today.

 

AudUsd:  The Aud$ is still languishing towards its recent lows, ahead of today’s RBA Meeting, as the prospect for a rate cut gathers pace. If the RBA stay on hold, we are going to see a spike to the topside and this would allow a run towards 0.6780/85 ahead of a possible move to 0.6805/10 (27/26 Sept highs) and to 0.6830 (minor). Further out, 0.6850, 0.6880 and even the 12 Sept high of 0.6891 would be levels to watch, although this seems unlikely. On the downside, the initial support is seen nearby, at 0.6739/35(25 Sept low/76.4% of 0.6688/0.6894), and I still suspect that we may see a return to 0.6700/10. Below this 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). 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). Wait for the RBA, but overall, a short bias is preferred whether we see a cut or not.

                                   

NzdUsd: The Kiwi had another tough session and now sits at the 0.6255, 5 year low. A break of this would then open the way to the next meaningful support, seen at the September 2015 low at 0.6235, which should be strong if we get there. Below here though, there is little to hold the Kiwi up, and more distant bids would arrive at the August 2015 low at 0.6125, which could be where we are headed if/when the RBNZ cut rates again, which seems highly likely. The RBA, today, may give the Kiwi a helping hand to the downside. On the topside, the initial resistance will be seen at 0.6275 (minor) ahead of 0.6300 (23.6% of 0.6450/0.6250) and the Friday high of 0.6308, above which could then see a squeeze towards 0.6330 (38.2% of 0.6450/0.6250) and then possibly 0.6350 (0.6348 = 26 Sept high: 0.6352 = 50% Fibo). Beyond that, unlikely, we could see a squeeze back to 0.6375 (61.8%) and then to 0.6400/10.

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