10 Apr: Trend table outlook for FX, Commodities, Indices

By | April 10, 2019

The FX Markets remain mostly rangebound ahead of the heavy duty calendar coming up today, but the dovish IMF report predicting lower growth output for 2019 seems to have put a dent into risk sentiment, sending stocks and oil a little lower.

EurUsd reached 1.1283 on Tuesday, and the Head/Shoulder base has a target of 1.1325 but needs to hold on above the neckline at 1.1245 for this to remain valid. Interim resistance remains intact at 1.1285 (38.2% of 1.1447/1.1182) and then at 1.1315 (50% pivot of 1.1447/1.1182). Beyond 1.1325 would look towards 1.1345 (61.8% of 1.1447/1.1182) and 1.1385 (76.4%). A dovish ECB today may stymie further gains though, and on the downside, back below 1.1245, decent support will again be seen at 1.1200/10. Only a break of 1.1175 would renew the downside pressure, for a run towards targets likely to be at 1.1125 (20 June 2017 low), 1.1100 and 1.1065. This seems unlikely today but the ECB will decide – the ECB will be followed by the US CPI and FOMC Minutes, so it could be a busy session.

Elsewhere the FX pairs look rather neutral. AudUsd initially ran higher, reaching the 100 DMA at 0.7150 but then backed off, not liking the IMF report, and is back at 0.7125. A move above the 100 DMA would open the way to 0.7170 and possibly on to the 200 DMA at 0.7205, although the short term momentum indicators suggest the downside may come back into play today. If so, support will arrive at 0.7105 (200HMA), below which would open the way to 0.7080. Under here would see good support at 0.7050/60 and again at 0.7000, although again, this is unlikely to be seen today.

The Kiwi still looks a little heavy but is still holding above the support at 0.6735 (200 DMA) having briefly dipped to 0.6720 on Monday. A decisive downside break would allow for a run down towards 0.6695 (50% pivot of 0.6424/0.6969) and possibly towards 0.6627 (61.8%) although that seems a long way off given the limited volatility in the markets at present. The upside currently looks limited to 0.6755 (100 HMA) and then 0.6780 (200 HMA).

US$Jpy is a little lower on Wednesday, following stocks and yields down after the IMF report. It briefly looked at 111.00, testing the 100 DMA, but in the bigger picture the pair remains trapped between the 200 DMA (111.45) and the 100 DMA. The picture remains neutral, but if sentiment does deteriorate, then we may see further losses, towards 110.75 (50% pivot of 109.70/111.82) and possibly towards 110.50 (61.8%). If the pair manages to make further gains, then above 111.45/50, the 200 WMA lies at 112.05.

Note that on the crosses, AudNzd still looks as though it may be forming a base and could continue to squeeze higher. The short term momentum indicators are hinting at buying dips, where support arrives at 1.0495 (100 DMA), so keep SL in place below here, while resistance is seen at 1.0625/50.

US stocks did not like the IMF report or Donald Trump’s Tweet and may have topped out of their recent uptrend. The bearish divergence seen in the daily charts may be a warning of a change in direction and the indices now seem likely to test the rising trend support seen at 2860 (S+P) and at 26000 (DJI). If wrong, then look for a return to the trend highs. Above 2900 in the S+P may see a run towards 2940, the all-time high although this looks unlikely today and selling rallies currently seems to be the plan, with a tight SL placed above 2900.

WTI was a little lower on Tuesday and now sits at 64.20. The dailies though remain positive, and above 65.00, would then allow for a run towards the major target, seen at 66.80 (50% pivot of 107.65/26.03) and then at 68.00. As we said previously, the S/H/S target is at 70.00.  The short term momentum indicators are suggesting caution on the topside today, and if the negative risk sentiment does grow, then the upside for WTI is limited. I still prefer to be long but keep stops tight. Buy dips, with SL below 63.00.


*Trade of the day: April 10, 2019; 8:40 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 @1.1325. SL @ 1.1390, TP @ 1.1200

Buy EurUsd @ 1.1175. SL @ 1.11400, TP @ 1.1290

Sell AudUsd @ 0.7150. SL @ 0.7180, TP @ 0.7080

Buy AudUsd @ 0.7090. SL @ 0.7040, TP @ 0.7145

Sell S+P @ 2895. SL @ 2910, TP @ 2850

Buy WTI @ 63.25. SL @ 62.50, TP @ 65.00