16 July: Trend table outlook for FX, Commodities, Indices

By | July 16, 2019

It has been a fairly steady session to start the week but with a busy calendar today we could see some decent volatility later on. Starting with the Nzd and the Aud, both look relatively underpinned ahead of the NZ CPI and the RBA Minutes, which are both due this morning, while later in the day, the US Retail Sales and Industrial Production will be in focus. The FX charts for the majors are rather mixed although on the crosses, the theme seems to be one of Aud and Nzd strength, along with Sterling weakness. The ASX looks a little heavy in the short term, as does WTI, which does appear to be running out of steam on the topside.

EurUsd:  The Euro has had a tight 30 point range on Monday and is currently pretty much unchanged from the Friday close. The outlook remains neutral, and with little directional bias a mostly choppy session would not surprise, leaving the technical levels pretty much unchanged, but with direction late in the day to be decided by the US data. The Euro is currently sitting right above the 100 DMA/200/100 HMAs which will all provide ongoing support. Below 1.1250, further support will be seen at the 12 July low of 1.1237, at 1.1225/30 (minor) and then at 1.1200/1.1190 (1.1192; Daily cloud base). If 1.1190/1.1200 is taken out, which looks unlikely today, then we could see a move towards 1.1178 (76.4%), which ties in with the 18 June low, below which would then open the way to 1.1150 and to strong support at 1.1105/15. On the topside, resistance will be seen at the session high of 1.1282 and then at 1.1300 ahead of the 200 DMA at 1.1322 (also 61.8% of 1.1411/1.1192) .Above here looks unlikely in the short term, but further gains could then see a run towards 1.1360 (76.4%) 1.1400 and the 25 June high of 1.1411, beyond which the next target is at 1.1447 (20 March high), which ties in with the Fibo level (23.6% of 1.2555/1.1106). With the daily charts looking a little heavy I still prefer to look to sell rallies in the Euro although right now a rangebound session looks likely.

DXY:  (96.93) The DXY had a sideways session on Monday, ending just below 97.00 and confined to support/resistance provided by the 100 DMA (97.10) and the 200 DMA (96.71). The momentum indicators are inconclusive, but the dailies do still look mildly positive, so if we can see a topside break of 97.10, look for further gains towards at 97.35/40 and then to 97.59 (9 July high) and 97.76 (18 June high). Beyond here would then target 98.00 and the trend high at 98.37 (23 May) although that is a long way off. On the other hand, a downside break of 96.70 would open the way to 96.40 (minor) and 96.00 (200 WMA), below which could see a decline to the 25 June/20 March lows of 95.84/74. This area should be quite strong, but a break would see a move towards the 10 Jan low at 95.03. A neutral stance is wise today ahead of the US data, but with the daily charts looking mildly supportive I suspect we may see the US$ squeeze higher at some stage.

US$Jpy:  has started the week with a tight 30 point range either side of 108.00 on Monday, but finished the day towards the lows. While the daily charts have now turned neutral, the short term charts look heavy, and if we accelerate lower, below the Fibo support at 107.88 (50% of 106.78/108.98), the next targets will be at 107.62 (61.8%) ahead of 107.53 (04 July low). Below here would want to look at 107.30 (76.4%) and 107.00 but possibly not yet. On the topside, resistance will be seen at 108.10 (Monday high), 108.25 (200/100 HMAs) and at 108.50 (minor) ahead of 108.60 (12 July high), 108.85 and at 109.00. Beyond here, unlikely for a while I think, minor resistance is seen at 109.10/15, above which would open 109.50 (50% of 112.40/106.78) and eventually back to 110.00. I remain neutral structurally on US$Jpy but a break of 107.80 would seem likely to see further downside momentum.

AudUsd:  The Aud continued its rally on Monday, closing at 0.7040, underpinned by Monday’s Chinese data and took out some decent resistance in the process (100DMA and the 18 month descending trend resistance from 0.8135). Tuesday sees the Aud also open just above the daily cloud top at 0.7035, which may signal further upside momentum ahead. If we do see a move higher, as the daily charts are beginning to suggest, look for a return to the 4 July high of 0.7047, beyond which would allow for a move to 0.7060 (61.8% of 0.7207/0.6831), the weekly cloud base at 0.7077 and the 200 DMA at 0.7092. On the downside, support will be seen at the 100 DMA, at 0.7020 and then at 0.7000, 0.6970 (minor) and 0.6955 (Daily cloud base) although these look unlikely to be bothered today. More distant levels downside levels lie at 0.6930/35 and at 0.6910. Below 0.6900 could open the way for a return to the 18 June low of 0.6830 although that remains some way off and bids will be seen at 0.6880 (76.4%) and at 0.6850. Buying dips currently seems to be the plan, but the longer term does not seem positive for the Aud$. I am looking to sell towards 0.7050/70 with a SL placed above 0.7100. The RBA Minutes will tell us more, later this  morning.

 NzdUsd: As with the Aud$, the Kiwi has continued to bounce from last week’s lows, to currently sit at 0.6720 after having reached a high on Monday of 0.6733.The short term momentum indicators are now mixed, but the dailies look mildly positive, in which case the upside targets are at 0.6733 (Session high) and at 0.6750, beyond which opens the way to 0.6763 (61.8% of 0.6938/0.6481) and 0.6782 (15 April high). However, note that the 4 hour charts are showing a mild degree of bearish divergence, and if we have seen a short term top on Monday, then on the downside, nearby support will be seen 0.6712 (200 DMA) at 0.6700 and then at 0.6675 (100 DMA/(23.6% of 0.6487/0.6733). Further out, 0.6755 and 0.6640 are more distant targets.

On the crosses, note that AudJpy and NzdJpy may be building a base to move higher if the longer term charts turn out to be building a reverse head shoulder formation. This may not come about, but the momentum indicators do have some mild positive momentum. If so, AudJpy could target the 100 DMA (77.20) and then the Fibo resistance seen at around 78.10 (61.8% of 80.70/73.92). Likewise, NzdJpy would look towards its own 100 DMA (73.45 and then the 200 DMA at 74.30.


*Trade of the day: July 13, 2019; 8:06 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 @1.1300. SL @ 1.1330, TP @ 1.1210

Buy EurUsd @ 1.1215. SL @ 1.1190, TP @ 1.1290

Sell AudUsd @ 0.7065. SL @ 0.7090, TP @ 0.6985

Buy AudUsd @ 0.7015. SL @ 0.7070, TP @ 0.6985

Sell NzdUsd @ 0.6760. SL @ 0.6790, TP @ 0.6680