12 Feb: Trend table outlook for FX, Commodities, Indices

By | February 12, 2019

The US$ gained for the 8th day in a row and with the DXY looking positive further gains may be expected. Having said that, most US$/pairs have reached important technical levels and it may be that we need some consolidation to allow the short term momentum indicators to unwind. I would still be looking for levels to buy dollars though and any decent rally in the Euro, Gbp, Aud or Nzd would provide an opportunity. US$Jpy and US$Chf also both look headed for further gains.

On the crosses, the stars appear to be aligning for AudCad to head lower although it is not a pair that I trade. Otherwise the crosses are in neutral mode.

Elsewhere, Gold looks increasingly heavy – under pressure from the firmer US$, so selling rallies may be a plan, while WTI is volatile but going nowhere fast right now so is better left alone, with the next major directional move likely to come on the back of “trade headlines” coming from the US/China.

The Euro has done as we thought it might and has tested the support at 1.1265. I am not sure I would want to sell it right here, but a test of 1.1215 is not too far away I suspect.

The Aud$ also looks heavy in the medium term but has come a long way quite quickly and will be hostage to “trade headlines”. As we said before, with Iron Ore prices approaching $100 per tonne, we may see some consolidation and possibly a squeeze higher.

I still prefer to be short Aud$ and short the Euro, given the deteriorating economic outlook for both. The RBNZ meet this week and may well have a dovish tilt, so selling the NZ$ may also be a plan.

In other markets, the ASX still looks OK in the medium/long term and buying dips may be a plan here.

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*Trade of the day: February 12, 2019; 10:53 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 AudUsd @ 0.7100. SL @ 0.7505, TP @ 0.7010

Buy AudUsd @ 0.7020. SL @ 0.69900, TP @ 0.7120

Sell EurUsd @ 1.1315. SL @ 1.1365, TP @ 1.1215

Sell NzdUsd @ 0.6770. SL @ 0.6805, TP @ 0.6650

Buy US$Chf @ 1.0000. SL @ 0.9965, TP @ 1.0100