17 Apr: Trend table outlook for FX, Commodities, Indices

By | April 17, 2019

It has been a choppy session, with the main action being in the Chf and in Gold, while the Kiwi has just seen a sharp selloff following the Q1 NZ inflation data. Elswehere it has been fairly rangebound as liquidity dries up ahead of Easter.

EurUsd:  Having reached the H/S target on Friday at 1.1320/25, as well as the daily Ichimoku cloud and Kijun at 1.1315, the pair is consolidating close to 1.1300, with the pair ending another tight session on Tuesday towards the range lows of 1.1280/1.1313. While the daily momentum indicators still look mildly supportive, a break of the 1.1315/20 resistance is needed to see a run towards 1.1345 (100 DMA/61.8% of 1.1447/1.1182) and 1.1385 (76.4%). On the downside, below 1.1280 would find support at 1.1268 (100 HMA), below which could see a return to 1.1250/45, and the 1.1230 spike low seen last Wednesday after the ECB meeting. Below there, decent support would again be seen at 1.1200/10. Only a break of 1.1175 would renew the downside pressure, for a run towards targets likely to be at 1.1125 (20 June 2017 low), and eventually at 1.1100 and 1.1065. Right now, a neutral stance is required as liquidity thins out towards Easter.

AudUsd:  fell to 0.7140, where it consolidated for much of the day, before a local press report suggested that there will be no imminent RBA rate cut, which sent the Aud back to where it began the day, at 0.7170. All up, the choppy consolidation continues and the technical points remain unchanged. On the topside, resistance will still be seen at Friday’s high of 0.7192, which comes ahead of the 200 DMA, 0.7195. Beyond 0.7195, a break of 0.7206 (21 Feb high) is required to make further progress, and further positive news from today’s Chinese (GDP, Industrial Production, Retail Sales) could be the catalyst. If so, look for a run, above 0.7200/05, towards 0.7225 (76.4% of 0.7295/0.7002) and eventually to 07265 (5 Feb high) and even to 0.7295(31 Jan high). Downside support will again arrive at 0.7140 (200 HMA), ahead of 0.7100/0.7090, below which would open the way to the rising trend support at 0.7075. A neutral stance seems wise, with the China data to dictate direction.

NzdUsd: Having made a new 3 month low at 0.6713 last Friday, before squeezing sharply higher, to 0.6780, the Kiwi has since consolidated in a narrow range around 0.6760.  As before, the momentum indicators look rather neutral on Wednesday and a cautious stance is required ahead of the Q1 CPI figure but, on the topside,  0.6780/0.680 provides decent resistance (0.6798 = 38.2% of 0.6938/0.6713;  and then 0.6826 = 50%), while support is seen at 0.6735 (200DMA) and at last week’s 0.6713 low. A break of 0.6700 would open the way towards 0.6670 and possibly towards 0.6630 although this is a long way off.

US$Jpy: had another neutral session on Tuesday, using 112.00 as a pivot, where it is currently trading in early Wednesday Asian trade. The 200 WMA is at 112.05 and a sustained break of this is needed to push on towards 112.50/60 and then to 113.05 (61.8% of 118.61/104.01). If risk sentiment were to deteriorate, then we are likely to see a return back below the Monday low of 111.88, towards 111.50 (200 HMA) and to 111.00. Below this would open 110.80/75 – 100 WMA/ (50% pivot of 109.70/111.82) and possibly 110.50 (61.8%). The daily charts suggest a topside break may be iminent.

On the crosses, AudJpy made a 4 month high on Friday, coming to rest on the 200 DMA, last seen in mid December and where it still currently sits. This will continue to provide decent resistance, but the daily/weekly charts are looking more positive, and  a break would open the way to 81.00 and possibly to 81.90 (50% pivot of 90.30/68.50 (flash-crash low)). Keep SL below 79.15 (100 DMA)

EurJpy is still consolidating its gains below last Friday’s high of high 126.76. This level is strong and will not be easily overcome, being the 200 WMA. However, a break would target 127.50 ahead of 127.90/128.00.  Both crosses look positive on the charts and buying dips seems to be the idea. SL; below 126.00

In other crosses, the Australian Dollar also looks firm against the Euro, Gbp and Nzd. I prefer AudNzd, looking for a move form the current 1.0600, towards 1.0700 and eventually towards 1.0780/1.0800. Also keep an eye on EurChf, which has broken above downtrend resistance and is currently at a Fibo level (1.1360: 23.6% of 1.2005/1.1161), a break of which could see a run towards 1.1444 (5 Feb high) and then towards 1.1485 (38.2%).

The most interesting charts are in Gold and Silver, as we said before, where the possibility of a head/shoulder top remains in place with good potential downside momentum for both.  The neckline for Gold has now broken and the target is seen at 1218.  A daily close back above 1290 would now negate the idea.  If the neckline for Silver were to break, the downside potential is at around 13.85oz.

Stocks: had a neutral session and the short term momentum indicators look indecisive for both the S+P and the DJI, while the weeklies remain positive. The all-time-high targets are now in sight, in the S+P at 2940, while the initial DJI target is at 26750, above which could target its all-time high at 26950. Some caution is required though. The dailies are showing a degree of bearish divergence and we need to hold above rising trend support in order to maintain the upside momentum, these now being close by, at 2900 and at 26325.

WTI: headed higher after the release of the API figures and currently sits at 64.30. The dailies may be showing signs of a top, although the weeklies remain positive. A cautious stance is required but the uptrend will remain intact as long as the uptrend support at 61.25 holds – and this roughly ties in with the 200 DMA. Resistance is seen immediately ahead, at 64.40/80, but above 65.00 would then allow for an acceleration higher and a run towards the next major target, seen at 66.80 (50% pivot of 107.65/26.03) and then at 68.00. This is unlikely any time soon although as we said previously, the S/H/S target is at 70.00.  The short term/daily momentum indicators are looking positive at the start of Wednesday trade, but if a negative risk sentiment sets in, then the upside for WTI is limited.  A possible headwind could be further follow-up from the weekend statement from the Russian Finance Minister, who said that Russia and OPEC could decide to increase oil production to fight for market share with the United States. This still as the potential to ensure some nervousness on the topside, but as long as 61.00/50 holds, the uptrend is intact. Below there would allow for a return to 60.00 and possibly to 58.00 although at this stage this seems unlikely.  The next OPEC meeting is on June 25/26


*Trade of the day: April 17, 2019; 8:05 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 @1.1325. SL @ 1.1350, TP @ 1.1225

Buy EurUsd @ 1.1245. SL @ 1.1215, TP @ 1.1325

Sell AudUsd @ 0.7205. SL @ 0.7235, TP @ 0.7150

Buy AudUsd @ 0.7140. SL @ 0.7120, TP @ 0.7220

Sell Gold @ 1285. SL @ 0.1297, TP @ 1260