It has been a rather nondescript session on Tuesday, and in the absence of anything on the calendar for Wednesday it could be a similar outcome today while traders wait on tomorrow’s ECB Meeting. The Jpy seems set to remain under pressure while a positive risk sentiment dominates negates the need for safe-haven demand, and both US$Jpy and the Jpy/Xs seem to have further upside potential. The other currency to keep an eye on is Sterling, which, although it seems set to remain choppy in the short term, it does appear to be building for further gains down the track. All will depend on the Brexit outcome though and if the end-game results in a no-deal divorce, Sterling will head sharply lower.
In other markets, stocks seem set to remain choppy, and I think 3000 will continue to be a major hurdle for the S+P, if/when we get back there.
The metals look heavy, with Gold in particular seeming as though it has further downside potential in the short term
WTI is highly volatile but the short term momentum indicators may be hinting at slightly lower levels ahead.
*Trade of the day: September 11, 2019; 8:25 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 @ 1.1080. SL @ 1.1115, TP @ 1.1000
Buy EurUsd @ 1.1000. SL @ 1.0975, TP @ 1.1100
Sell AudUsd @ 0.6890. SL @ 0.6915, TP @ 0.6800
Buy AudUsd @ 0.6835. SL @ 0.6805, TP @ 0.6885
Buy NzdUsd @ 0.6390. SL @ 0.6355, TP @ 0.6450
Sell Gold @ 1500. SL @ 1515, TP @ 1490
EurUsd: The Euro has been choppy, without any real direction and will probably remain so until the ECB Meeting, tomorrow. Currently at 1.1040, the short term momentum indicators are in neutral but the dailies do point mildly higher so we could head back towards resistance at 1.1067 (9 Sept high), ahead of the 1.1085 (5 Sept high), and then at 1.1100 and 1.1110 (38.2% of 1.1411/1.0925). Above here would then target 1.1125(61.8% of 1. 1249/1.0925) and the 26 August high of 1.1163 but which seems unlikely to be visited again for a while, although a return to the top side of the descending wedge (1.1300) cannot be ruled out at some stage. On the downside, support will be seen at 1.1000, 1.0965/70 and then at 1.0940/50 ahead of the 1.0925 low. Below that opens the way to 1.0900 and to 1.0860 (76.4% of 1.0340/1.2555), below which there is a chart gap that would take us to 1.0772. Buying dips, with a SL placed below 1.0980 may again be the plan for today in what I suspect may be another tight, rangebound session.
US$Jpy: is squeezing slowly higher while the risk-on mood underpins the pair, and it currently sits at a 6 week high above 107.50. With the momentum indicators aligning higher, there is little technical resistance now ahead until we reach 108.00 and even 108.15 (76.4 of 109.31/104.44) albeit unlikely in the near term. On the downside, the initial support now sits at 107.15 and at 107.00 (100 HMA) below which would allow a return to 106.80/85 (rising trend support/23.6% of 104.43/107.58). This seems unlikely to be seen for a while, but if wrong look for a move towards 106.60 (200 HMA) and back towards 106.38 (38.2%). Looking to buy dips with a SL under 107.00 may be the plan today.
AudUsd: The Aud$ has had a tight session and remain unchanged at 0.6860. The momentum indicators are mixed on Tuesday, but after having made a bullish outside week, last week, the longer term charts still look constructive for further gains and a break to the topside could see a move towards 0.6875/80 (0.6878=50% pivot of 0.7082/0.6676) , to 0.6900 and then to 0.6926 (61.8%). On the downside, the short term momentum indicators do seem to be running out of upside momentum, and with the 4 hour charts pointing lower, minor support will be seen today 0.6845/50 ahead of 0.6830 (23.6% of 0.6687/0.6875) and again at 0.6803 (38.2%). This seems unlikely to be visited today, but if wrong, below there could see a decline towards 0.6780 (50% of 0.6687/0.6829). I don’t really see it under there for a while but if wrong, further bids would arrive at 0.6750/52 (61.8%) and at 0.6727(76.4%). Although the dailies do point quite sharply higher, the short term momentum indicators are a little heavy, so buying dips is favoured with a SL placed sub 0.6785, or alternatively waiting to sell into a run towards/above 0.6900.
NzdUsd: The Kiwi remains firm following the recent recovery from new 5 year lows, and currently sits at 0.6425 just below the immediate resistance seen at 0.6445/50. As with the Aud$, the Kiwi also had a bullish outside week, last week and further medium term gains could now lie in store. If the positive risk outlook remains intact, a move above the 0.6443 trend high would allow a move towards 0.6466(38.2% of 0.6789/0.6269) and then onto 0.6498 (9 August high) and possibly towards 0.6530 (50% pivot of 6789/0.6269). On the downside, 0.6400 should provide support today, below which could see a return to last Friday’s low of 0.6363 and Thursday’s low of 0.6353 although this seems over the horizon for now. Further declines though would then target 0.6330, below which could head back to 0.6300 and then to the trend low of 0.62690. The long term momentum indicators still look heavy though and below 0.6270 the next meaningful support is not seen until the September 2015 low at 0.6235, while more distant bids would arrive at the August 2015 low at 0.6125. In the meantime, I suspect that buying dips is once again the near term plan, with a SL placed under 0.0.6360 today. In the longer term, I still think we have plenty of downside potential.