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

By | September 16, 2019

Sterling was the centre of attention on Friday and the charts suggest that it has further to run to the topside in the days ahead so looking to buy dips either against the US$ or on the crosses currently seems to be the plan. The Euro also looks slightly better bid in the medium term, while US$Jpy and AudUsd also seem relatively underpinned although it is difficult to see too much directional bias ahead of the Wednesday’s FOMC Meeting.

On the crosses, AudNzd is building to head higher, but needs to break above 1.0800 to add upside momentum.  AudCad may also be looking at some upside progress ahead. Buying dips in either/both crosses seems to be the play.

Stocks still look as though they have further to run on the topside in the medium term, but again, ahead of the FOMC I would not be too involved, especially in light of the weekend drone attack on the Saudi oil refinery. This has caused an early gap lower, and may see further downside if the position escalates.

The metals look heavy in the medium term and seem to have further downside potential although the price action does remain volatile and the weekend drone attack on the Saudi oil refinery has seen an early gap higher. I would still sell into strength but keep a tight SL incase the whole scenario escalates.

WTI is going to open higher this morning following on from the terrorist action in Saudi over the weekend. I can’t help feeling it will eventually drift back lower but in the meantime I would stay away.

Note the UsdCnh seems to have further downside, which will come about if progress is made between the US/China in the trade negotiations.

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*Trade of the day: September 16, 2019; 8:45 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 @ 1.1105. SL @ 1.1135, TP @ 1.1000

Buy EurUsd @ 1.1040. SL @ 1.1010, TP @ 1.1100

Sell AudUsd @ 0.6905. SL @ 0.6925, TP @ 0.6800

Buy AudUsd @ 0.6835. SL @ 0.6795, TP @ 0.6885

Sell NzdUsd @ 0.6400. SL @ 0.6425, TP @ 0.6340

Sell Gold @ 1510. SL @ 1525, TP @ 1475

Buy AudNzd @ 1.0740. SL @ 1.0695, TP @ 1.0840

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 EurUsd:   The Euro squeezed up to the strong resistance at 1.1110 on Friday (38.2% of 1.1411/1.0925/descending trend resistance) but was unable to break higher and ended the session pretty much unchanged, at 1.1070. A neutral stance is required on Monday, and some sideway action ahead of Wednesday’s FOMC would not surprise. Resistance remains intact at 1.1100/10, above which 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 yet. If wrong, further resistance lies at 1.1175(76.4% of 1. 1249/1.0925), at 1.1185 (100 DMA) and then at 1.1260 (200 DMA) although that remains some way off yet. On the downside, minor support will be seen at 1.1050, at 1.1040 (100 HMA) and again 1.1030 (200 HMA) ahead of 1.1000. Below here looks unlikely today but further bids would arrive at 1.0965/70 and then at 1.0940/50 ahead of the 1.0925/27 double bottom. Below that opens the way to 1.0900 and to 1.0860 (76.4% of 1.0340/1.2555), and further out there is a weekly chart gap that would take us to 1.0772. Trading the range (1.1040-1.1110), with a SL placed 30 pips on either side, may be the plan for Monday.

 

US$Jpy:  is squeezed up to 108.25 on Friday and remains bid, above 108.00 just below the 6 week high, while the risk-on mood underpins the pair. Stiff resistance remains intact right here (100 DMA/(76.4 of 109.31/104.44) but with the daily momentum indicators pointing higher, we could see a run towards 108.45/50 (minor), beyond which would open the way to 108.80/109.00 and then to the 1 August high at 109.31. On the downside, the initial support now sits at 107.90 (Friday low) and then at 107.75 (100 HMA). Below here could then see a return to 107.40/35 (rising trend support/23.6% of 104.43/108.15) and to 107.15(200 HMA), which seems unlikely to be seen for a while, but if wrong, look for a move towards 106.75 (38.2%). Looking to buy dips with a SL under 107.50 may be the plan today.

 

AudUsd:  The Aud$ had sideways session on Friday, confined to a 30 point range, with the next directional move dependent on trade-talk headlines and then on the FOMC, Wednesday. The Aud has opened a few points lower on Monday, currently at 0.6865 and  the charts are mixed, with the short term momentum indicators looking heavy but the longer term charts still look constructive for further gains in the days ahead. A break to the topside could see a move back to the immediate resistance seen at 0.6895/ 0.6900 and then to 0.6926 (61.8% of 0.7082/0.6676), above which would open the way towards0.6950 (minor) and then to 0.6985 (76.4%).On the downside, the short term momentum indicators do seem to be turning heavy, and the initial support will be seen at 0.6859 (Friday low), at 6845/50 (0.6845 = 23.6% of 0.6687/0.6894) and again at 0.6815 (38.2%). This seems unlikely to be visited today, but if wrong, below there could see a decline towards 0.6790 (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 0.6765 (61.8%) and at 0.6735(76.4%).  In the absence of any data today, 0.6850/0.6900 may well cover it.

 

NzdUsd: The Kiwi broke below the 0.6400 support in early Friday trade and never really looked back, closing the week at session lows at 0.6372. Purchases of AudNzd did not help on Friday and the cross looks poised to head higher still, which will add to the downside pressure on the Kiwi in the days ahead if that comes about.  With the short term momentum indicators still looking heavy, the initial support will arrive at the 5 Sept/4 Sept lows at 0.6363/0.6353 while further declines though would then target 0.6330, below which could head back to 0.6300 and then to the trend low of 0.6269.  The weekly/monthly indicators also look heavy and on any move 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. That is a long way off, and in the meantime, we could still see a bit of a bounce, so a return to 0.6400/10 should not be ruled out. Above here would allow a move towards the trend high of 0.6450 and then to 0.6466(38.2% of 0.6789/0.6269) and onto 0.6498 (9 August high) and possibly towards 0.6530 (50% pivot of 6789/0.6269). Right now, looking to sell any rally to 0.6400/10 seems to be the plan, with a SL placed above 0.6425. For those not wanting any US$ exposure ahead of Wednesday’s FOMC, buying dips in AudNzd at around 1.0750 (SL @ 1.0695) and looking for a run towards 1.0900 may be a plan.