It was a risk-off Monday, with the same theme looking set to continue in coming sessions, meaning that Gold, the Jpy and the Chf should be in demand, while stocks, the Aud$ and the NZ$ seem set set to remain under downside pressure.
*Trade of the day: August 13, 2019; 7:22 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.
Buy EurUsd @ 1.1150. SL @ 1.1115, TP @ 1.1250
Sell EurUsd @ 1.1250. SL @ 1.1285, TP @ 1.1150
Sell AudUsd @ 0.6775. SL @ 0.6805, TP @ 0.6705
Buy AudUsd @ 0.6690. SL @ 0.6665, TP @ 0.6785
Sell NzdUsd @ 0.6475. SL @ 0.6505, TP @ 0.6385
Sell S+P @ 2900. SL @ 2925, TP @ 2820
Other strategies seem to be: – much the same as before –
Ongoing Yen and Chf strength on all fronts – another near term bounce in US$Jpy or US$Chf and in X/Jpy, X/Chf is possible but selling rallies is preferred. AudJpy and NzdJpy both look heavy in the medium/long term.
Sterling looks to be in increasing trouble and selling GbpJpy or GbpChf may be the plan. EurGbp also looks increasingly bid while EurChf remains very heavy
Look to sell rallies in the S+P and the ASX
Gold to remain highly volatile but the charts have an increasingly positive bias so buying dips is preferred
UsdCnh has settled into a wide range of 7.0400/7.1000 and this looks likely to contain it today although the topside is under some pressure. The longer term charts are pointing up though, and as long as the pair remains above 7.0000, I suspect that the dollar will eventually head higher so buying dips is preferred.
EurUsd: The Euro dipped sharply at the London open to trade down to 1.1162, ahead of an equally sharp bounce back to 1.1200, reaching briefly up to 1.1230, but the start of Tuesday trade it sits at 1.1215 and leaves the technical outlook pretty much unchanged. As with several sessions last week, the neckline of the HS formation remains a magnate, at 1.1215, while the 100 DMA (1.1225) again stood in the way of further progress, and leaves us with a rather neutral stance on Tuesday. On the topside, resistance will again be seen at 1.1215/1.1250, so any upside progress may be slow, but above 1.1250 would open the way to 1.1264 (61.8% of 1.1411/1.1025), ahead of 1.1300 (200DMA) and 1.1320 (61.8%). On the downside, the initial, minor support will arrive at 1.1180 and again at 1.1162/65 (Session low/38.2% of 1.1025/1.1248/200 HMA) ahead of 1.1138 (50%) and 1.1112 (61.8%). Below 1.1100 would allow for an eventual return to the trend low of 1.1025 ahead of the 1.1000 H/S target. If/when we get below 1.1000, there is good trend support at 1.0965 – at which point I would square up any short Euro positions and take a nimble stance. Right now, given the empty calendar for Monday, it looks set to be another choppy/sideways session and 1.1150/1.1250 may well cover it, but I still prefer to sell Euro rallies as I think that 1.1000 and lower will be seen at some stage down the track.
US$Jpy: traded down to a low of 105.04 on Monday as the risk-off mood increasingly took hold ahead of a dead cat bounce, which sees the pair currently sit at 105.25. Further safe haven demand will see a return to 105.05/00, but beneath which there is little support ahead of the January flash-crash low (104.01). The short term momentum indicators are now mixed but the longer term momentum indicators are heavy, so selling rallies is again preferred. Minor resistance will now be seen at 105.50, 105.70, 105.85 and then at 106.00/05 (23.6% of 109.30/105.04). Above here would open the way to 106.67 (38.2%) and to 107.00/10, beyond which could then head back to 107.20 (50% pivot of 109.30/105.26) and to 107.70 (61.8%) albeit unlikely in the near term. Volatile conditions are likely to continue but with the daily/weekly charts pointing lower I think a move to 105.00/104.00 is on the cards. Sell rallies.
AudUsd: The Aud$ continued to head lower on Monday, in trading down to a low of 0.6744 after having backed off from last week’s rally to 0.6821. The 4 hour momentum indicators are currently a bit mixed although a short term bear flag may be forming, which if it plays out would have a target of around 0.6700. The RBA’s Kent and the NAB Business Conditions/Confidence are due today, neither of which are likely to be that supportive of the currency so I would rather trade from the short side. On the downside, support will be seen at 0.6740 and at 0.6715/20, ahead of 0.6700 and then at 0.6675 although we are unlikely to be back there today. Further out, below 0.0.6675, 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)). A rally would now find resistance at 0.6770 (100 HMA), 0.6785 (200 HMA) and then at 0.6800 (minor) ahead of 0.6821 (08 August high), and then at 0.6830 (38.2% of 0.7081/0.6675). Further resistance would be seen at 0.6877 (50% of 0.7081/0.6675) but that won’t be bothered for a while. Staying short seems to be the plan, possibly looking for 0.6700 – today/tomorrow.
NzdUsd: having spiked down to 0.6375 following last week’s RBNZ rate cut, the short squeeze since then has seen the Kiwi top out at 0.6495, since when it appears to be putting in a rounding top formation which has some support at 0.6430/05, but below which could allow a return to 0.6400 and eventually to the 0.6375 low. While the short term momentum indicators look rather neutral, the longer term charts still point lower so trading from the short side is still preferred. and if/when we break below 0.6375, the next meaningful support is seen at the January 2016 low at 0.6347 and then at the September 2015 low at 0.6235, below which opens the way to the August 2015 low at 0.6125. On the topside, resistance will be seen at 0.6475 (Session high), and again at 0.6480/85 and at 0.6495/0.6500 (9 Aug high/200 HMA). Above here would open the way to 0.6520 and to 0.6532 (38.2% of 0.6789/0.6375) although not today. In the meantime, selling rallies remains the plan.