14 Aug: Trend table outlook for FX, Commodities, Indices

By | August 14, 2019

Things look rather different on Tuesday following the announcement of the delay in tariffs on Chinese goods and all of a sudden we have a positive risk outlook with US stocks moving up sharply and the Jpy back under pressure, and US$Jpy and the Jpy/Xs now looking as though they  wants to head. All very confusing, and difficult to trade. I don’t think I would be getting too carried away with the current moves as the first negative headline/POTUS Tweet will see the Jpy come back sharply into favour.

The Aud$ looks to be back in favour as well, at least in the short term although the daily charts seems to be turning higher as well.

Note that UsdCnh seems to be turning lower and that 7.1000 seems to be an increasingly important top .


*Trade of the day: August 14, 2019; 7:41 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 @ 1.1140. SL @ 1.1115, TP @ 1.1250

Sell EurUsd @ 1.1225. SL @ 1.1255, TP @ 1.1150

Buy US$Chf @ 0.9700. SL @ 0.9648, TP @ 0.9800

Sell AudUsd @ 0.6825. SL @ 0.6855, TP @ 0.6750

Buy AudUsd @ 0.6740. SL @ 0.6715, TP @ 0.6815

Sell NzdUsd @ 0.6480. SL @ 0.6505, TP @ 0.6385

Other strategies seem to be: –

Wednesday sees Yen and Chf weakness on all fronts – and the Jpy/Xs do appear to be turning higher from an oversold base, so further upside for both US$Jpy and the related crosses maybe on the cards. Likewise, EurChf had a bullish outside day and appears to have further upside potential after having become oversold. Buying dips with a SL placed below the trend low (1.0840) could be the plan.

As with EurChf, US$Chf had a bullish outside day, so buying dips with a SL placed under the trend low of 0.9658 may be an idea.

Sterling is consolidating at current levels but it looks to be in increasing trouble in the medium term against both US$ and also against EurGbp

The S+P and the DJI also both recorded a bullish outside day although upside momentum is not strong, but I would not be fighting against this today though as further upside progress is possible. Overall it looks set to remain choppy in the stock markets, and given that the weeklies point lower I suspect we may be in for further broad range trading in the days ahead, while the overall gut feel is that stocks have greater downside potential than upside.

Gold remains highly volatile and today saw a 0.75% retreat. However, the longer term charts still have positive bias so buying dips is preferred


EurUsd:   The Euro remains very choppy within its recent 1.1160/1.1230 range although the downside seems set to come under some pressure today, but overall, the technical picture is unchanged.  Right now, on the downside, the initial, minor support will arrive at 1.1170 (right here) and again at 1.1162/65 (12 August low/38.2% of 1.1025/1.1248) 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. On the topside, resistance will be seen at 1.1200 and then, once again at the neckline of the HS formation which remains a magnate, at 1.1215, while the 100 DMA (1.1225) again stood in the way of further progress on Tuesday where the pair topped out at 1.1227. The resistance at 1.1215/1.1230 is very strong now, but above which would open the way to 1.1250 ahead of 1.1264 (61.8% of 1.1411/1.1025), 1.1300 (200DMA) and 1.1320 (61.8%). Right now the Euro looks rather heavy but depending on the data due today (EU GDP/IP), 1.1150/1.1230 may well cover it again. 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:  held on precariously above 105.00 for most of the session before soaring up to 106.95 on the tariff announcement, and then settling right on the Fibo level at 106.70 (38.2% of 109.30/105.04) heading into the US session close. With the short term momentum indicators now pointing sharply higher, further progress looks likely and above 107.00 would open the way to 107.20 (50% pivot of 109.30/105.26) and to 107.70 (61.8%) ahead of 108.00 and even 108.20 (76.4) albeit unlikely in the near term. On the downside, a return to safe haven demand would see a sharp turn lower, where support would now arrive at 106.25/30, at 106.00 and at 105.50/60 (all minor levels) ahead of the 105.04 trend low. As we said before, beneath 105.00 there is little support ahead of the January flash-crash low (104.01) although that all looks pretty safe today, and buying dips seems to be the near term plan.

US$Chf:  having fallen to 0.9658, US$Chf has revered sharply higher on Tuesday, and having made a bullish outside day reversal it could be signalling that the dollar wants to head higher again – which would put added pressure on EurUsd.  If correct, the topside levels to watch for in US$Chf would be at 0.9780 (38.2% of 0.9975/0.9658), 0.9795 (23.6% of 1.0237/0.9658) and then at 0.9815 and 0.9855 (50/61.8% of 0.9975/0.9658 respectively). Beyond there would look at more distant Fibos at 0.9880 and then at 0.9900 albeit not yet. On the downside, support will be seen at 0.9730 (100 HMA) and again at 0.9700, ahead of 0.9775 and the 0.9658 low. For now, buying dips with a SL below the trend low is favoured.

AudUsd:  The Aud$ briefly soared from 0.6745, up to 0.6817 on the tariff announcement, but then settled into the US close at just below 0.6800. The hourly charts are pointing up but look a little toppish while the 4 hourlies remain mildly positive, so a return to the 0.6815/20 level should not be ruled out and if further positive trade headlines appear then the Aud$ will jump higher again. Above 0.6820, the initial resistance would arrive at 0.6830 (38.2% of 0.7081/0.6675), ahead of 0.6878 (50% of 0.7081/0.6675), 0.6900 and then at 0.6926 (61.8% of 0.7081/0.6675)  but that won’t be bothered for a while. On the downside, support will now be seen at 0.6765/70, at 0.6740, 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)). For now, buying dips seems to be the plan but structurally I prefer to look for levels to build a short position, albeit not at these levels as I think we may be in for a test of 0.6850/70.

NzdUsd: is chopping around near 0.6450 and currently going nowhere fast, which looks set to continue today, so a neutral stance is required. The daily/weekly charts remain heavy though so I prefer the downside in the medium term, where support levels will arrive at 0.6425/30 and again at 0.6400 ahead of the 0.6375 trend low. 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 0.6470/75 (Session high/23.6% of 0.6789/0.6375), and again at 0.6498/0.6500 (9 Aug high). 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.