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

By | July 11, 2019

Jerome Powell’s testimony to congress has weakened the US$, while sending stocks higher, with the S+P reaching a new all-time high, and also producing strong moves in the commodities. WTI in particular seems capable of continuing to run higher although elsewhere things look rather more choppy. Today’s Q+A session of the Fed’s Powell in the US Congress should provide some clarity.

EurUsd:  The Euro has held on above 1.1200 and has bounced to a high of 1.1263 in the US session, and with the short term momentum indicators looking positive, further short term gains seem possible. If so, we need to clear the 100 DMA, right here at 1.1255 above which, sellers will be seen at the session high of 1.1263 (200 HMA) and then at minor levels seen at 1.1280 and 1.1300 ahead of the 200 DMA at 1.1325 (also 61.8% of 1.1411/1.1192) .Above here looks unlikely in the short term, but further gains could then see a run towards 1.1360 (76.4%) 1.1400 and the 25 June high of 1.1411, beyond which the next target is at 1.1447 (20 March high), which ties in with the Fibo level (23.6% of 1.2555/1.1106). On the downside, support will be seen at 1.1225/30 (minor) and then at 1.1200/1.1190 (1.1192; Daily cloud base). If 1.1190/1.1200 is taken out, which looks unlikely today, then we could see a move towards 1.1178 (76.4%), which ties in with the 18 June low, below which would then open the way to 1.1150 and to strong support at 1.1105/15 With the daily charts looking a little heavy I still prefer to look to sell rallies in the Euro although right now a move towards 1.1300 looks the more likely near term outcome.

DXY:  (97.10) The DXY is under some downside pressure on Thursday and the 4 hour indicators are pointing lower, but with the daily momentum indicators still looking positive, we could see further gains in the coming sessions, so cautiously looking to buy dips is preferred. On the downside, support will be seen at the initial support will arrive right here at the 100 DMA (97.09), and below 97.00 would allow for a run back to 96.85 and to the 200 DMA (96.68) ahead of 96.40 (minor) and 96.00 (200 WMA) and then at last week’s low of 95.84. Buying dips currently seems to be the plan, with a SL placed below 96.60 (approx 1.1300 EurUsd). The initial resistance will now be seen at 97.35/40 ahead of 97.59 (9 July high) and then at 97.76 (18 June high). Beyond here would then target 98.00 and the trend high at 98.37 (23 May) although that is a long way off. I still prefer to buy dips, but with a tight SL placed under the 200 DMA (96.68).

US$Jpy: topped out at 108.99, just below 109.00 option strikes, and headed sharply into reverse to currently sit at 108.40. The momentum indicators are mixed, with the short term charts pointing sharply lower but with the dailies still looking constructive. Near term downside pressure therefore seems likely, where support would arrive at 108.25 (minor), at 108.14 (38.2% of 106.78/108.98) , at 108.00, 107.88 (50%) and at 107.77 (Friday low) ahead of 107.53 (04 July low). On the topside, resistance will be seen at 108.60, 108.85 and at 109.00. Beyond here, unlikely today I think, minor resistance is seen at 109.10/15, above which would open 109.50 (50% of 112.40/106.78) and eventually back to 110.00. I remain neutral on US$Jpy at these levels but prefer to look for levels to buy dips given the positive look of the daily charts, but with a SL placed below 107.50.

AudUsd:  The Aud reached 0.6810 on Wednesday and met the support at 0.6913 (61.8% of 0.6831/0.7048) ahead of a decent bounce, to currently sit at 0.6963. With the short term momentum indicators looking positive, further gains now look possible with targets to be found at 0.6979 (50% pivot of 0.7047/0.6910), 0.6995 (61.8%), 0.7015 (76.4%) and at 0.7022 (100DMA) ahead of the 4 July high of 0.7047. The daily charts still look a bit heavy though, so a return to the downside may eventuate, where targets would be at 0.6953 (Daily cloud base), 0.6930/35 and at 0.6910. Below 0.6900 could open the way for a return to the 18 June low of 0.6830 although that remains some way off and bids will be seen at 0.6880 (76.4%) and at 0.6850. Buying dips currently seems to be the plan, but above 0.7000 would run into increasing headwinds and I would again look to sell rallies.

NzdUsd: As with the Aud$, the Kiwi has bounced from its lows to currently sit at 0.6648. The charts look a little mixed today, with the short term momentum indicators suggesting the chance of some near term gains, where targets would be 0.6660 (200 HMA), 0.6682 (100 DMA)/0.6707 (200 DMA) and then at 0.6720. On the downside, minor support will be seen at 0.6630 and at 0.6610 ahead of 0.6590/0.6600. The dailies still look a little heavy, so selling rallies at/above 0.6700 remains the medium term plan.

WTI: shot higher on Wednesday up by 1.5% following the Fed testimony to Congress.  WTI currently sits right on the major resistance, which it has previously been unable to overcome, at 60.60, this being the 100 WMA The weeklies are neutral and this may continue to cap further upside momentum, but the 4hour/daily momentum indicators look positive, and a break of 60.60 would allow for steeper gains, towards 62.20 descending trend resistance, above which would then open the way to 63.93 (20 May high) although that remains some way off. On the downside, support will be seen at 59.15 (100 DMA) and again at 58.00 (200 DMA) below which would open the way back to 56.00. Given the look of the charts, buying dips does seem to be the plan although there are many conflicting reasons to pull the price around, so tight stops re required, right now placed just below the 100 DMA I think.

 

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*Trade of the day: July 11, 2019; 8:32 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 @1.1300. SL @ 1.1340, TP @ 1.1210

Buy EurUsd @ 1.1200. SL @ 1.1175, TP @ 1.1290

Sell AudUsd @ 0.7000. SL @ 0.7030, TP @ 0.6915

Buy AudUsd @ 0.6930. SL @ 0.6895, TP @ 0.7020

Sell NzdUsd @ 0.6700. SL @ 0.6740, TP @ 0.6600

 

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