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

By | April 12, 2019

The US$ is generally firmer today although the ranges are limited and there is no real change in the outlook for most pairs. The most interesting moves have been in Gold and Silver, where the possibility of a head/shoulder top remains in place with good potential downside momentum for both.  If the neckline for each of these were to break, Gold would have a downside potential towards $1200oz and for Silver to around 13.85oz.

In the FX markets, EurUsd remains stuck within its familiar range, where 1.1200-85 act as the parameters. The Head/Shoulder base still appears to be valid, despite the brief spike back below the neckline after the ECB announcement. The target of 1.1325 therefore remains a target although the Euro needs to hold above the neckline at 1.1245 for this to remain a legitimate formation.

As before, interim resistance remains at 1.1285 (38.2% of 1.1447/1.1182), which has capped the last two sessions, 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%). On the downside, back below 1.1245, and the 1.1230 spike low on Wednesday – 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), and eventually at 1.1100 and 1.1065.

AudUsd ran out of steam at the 0.7170-75 resistance and is now back at 0.7120 (20HMA) and therefore within the well established range. Further downside would be seen at 0.7100/0.7090, below which would open the way to the rising trend support at 0.7075. Under here would see good support at 0.7050/60 and again at 0.7000/20, although again, this is unlikely to be seen today. On the topside, further progress above the Thursday high, which the charts suggest is unlikely, would then allow a move towards the 200 DMA at 0.7205.

The Kiwi is closing the US session below the support at 0.6735 (200 DMA) having squeezed up to 0.6770 on Thursday.  The dailies look negative and the break of the 200 DMA could allow for a run down towards 0.6695 (50% pivot of 0.6424/0.6969).  Below here, the next major target would be at 0.6627 (61.8%) although that seems a long way off given the limited volatility in the markets at present. The upside could see a squeeze back above 0.6735 and perhaps to 0.6750 but further gains would be  capped at the 23.6% of 06938/0.6718 at 0.6770. Beyond there, unlikely, would allow room for a move back towards 0.6800 (38.2%).

US$Jpy is a little higher on Friday, following yields up although the picture remains mixed. The pair is closing the day above the 200 DMA (11.50) but running into descending trend resistance 111.75. In the bigger picture, the pair remains trapped between the 100 WMA (110.80) and the 200 WMA (112.00) and a neutral stance is currently required. , If risk sentiment were to deteriorate, then we may see further losses back towards 110.80/75 – 100 WMA/ (50% pivot of 109.70/111.82) and possibly towards 110.50 (61.8%). Beyond this the rising trend support at 110.25 comes into view, and with the daily charts pointing slightly lower, I suspect that this may eventually come into view. On the topside, above 111.75, resistance will be seen at the 200 WMA lies at 112.05.

On the crosses, EurJpy is showing signs of life but needs to break above the 100 DMA at 125.80 to gain momentum towards the previous high at 126.80.

Stocks had another steady session, and may be taking a break before heading higher although the bearish divergence seen in the daily charts may be a warning of a change in direction. The US corporate reporting season swings into action later today, with JP Morgan and Wells Fargo due, and given the rather pessimistic outlook I would be careful of being long up here. The charts are turning neutral but as long as we stay above the rising trend support at 2860 (S+P) and at 26000 (DJI) the uptrend remains intact. Above 2900 in the S+P may see a run towards 2940, the all-time high while the DJI target would be at 26750, above which could target 26950. A downside break of the support lines would allow for a run back to 2820/25600

WTI is lower, currently at 63.70, but the dailies/weeklies remain positive, so for the time being I prefer to remain long but with a fairly tight SL in place. the resistance is seen at 64.40/80 but  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, 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 12, 2019; 8:19 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 @1.1285. SL @ 1.1325, TP @ 1.1200

Buy EurUsd @ 1.1185. SL @ 1.1145, TP @ 1.1285

Sell AudUsd @ 0.7170. SL @ 0.7210, TP @ 0.7080

Buy AudUsd @ 0.7085. SL @ 0.7045, TP @ 0.7150

Buy WTI @ 63.00. SL @ 62.50, TP @ 65.00

Sell NzdUsd @ 0.6755. SL @ 0.6785, TP @ 0.6680