It has been a busy session and has provided some directional movement which may have some follow-through in the coming session. In particular, Sterling looks very heavy on all fronts, although I am avoiding Cable right now because of Brexit, while in the short term at least, the US$ looks set to remain underpinned against the majors. Stocks look toppish to me and a short position in either the S+P or the DJI with a SL placed above the respective all-time high seems to be a plan. Gold and Oil look a little heavy, while at the same time, Silver has squeezed sharply higher. I prefer the direction of Gold and WTI, preferring to sell rallies although the price action may be choppy.
EurUsd: The Euro has moved lower following the weak EU/strong US data but is technically still holding on above the 1.1200 level, which provided good support in early July. The overall outlook remains fairly neutral although the short term momentum indicators do look a little heavy, allowing for a retest of the important 1.1190/1.1200 level. . If 1.1190/1.1200 is taken out, then we could see a move towards 1.1178 (76.4% of 1.1105/1.1411), which ties in with the 18 June low (1.1181), 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 1.1235 (minor) and at 1.1250 (100 DMA) ahead of 1.1285 (11 July high) and then at 1.1300 ahead of the 200 DMA at 1.1320 (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 as well as the short term momentum indicators now looking a little heavy, I still prefer to look to sell rallies in the Euro, hoping for a break of 1.1190 and a move back towards 1.1100/15.
DXY: (97.37) The DXY had a positive session on Tuesday, ending at 97.37, and back above the 100 DMA (97.10. The 4 hour/daily momentum indicators do look mildly positive, so if we can see a topside break of the session high at 97.45, look for further gains towards 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, support arrives at 97.10 (1 00 DMA) and at 97.00 (minor). A downside break of 96.80/73 (200 DMA/12 July low) 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. With the daily charts still looking mildly supportive I suspect we may see the US$ squeeze higher at some stage, so prefer to trade from the long side for now.
US$Jpy: held on above the 107.80 support that we mentioned yesterday and has rallied back to 108.37 on the back of the solid US data, and currently sits at 108.25. While the daily charts remain in neutral gear, the short term charts look more positive, and if we can make further headway, beyond the session high, further targets would be 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. On the downside, support will be seen at 108.00 and at 107.80, which should be strong, if we see it; doubtful today I suspect. Fibo support is seen at 107.88 (50% of 106.78/108.98), but below 107.80, the next targets will be at 107.62 (61.8%) ahead of 107.53 (04 July low). Under here would want to look at 107.30 (76.4%) and 107.00 but possibly not yet. Neutral
AudUsd: The Aud has topped out, for the time being, at 0.7044 and is now back below the 100DMA (0.7018) and the 18 month descending trend resistance from 0.8135 after having made a bearish outside day, which hints at further losses ahead. Wednesday sees the Aud open at 0.7010, and a break of 0.7000 (0.7005 = 100 HMA) would then allow for a run towards 0.6985 (200 HMA), to 0.6970 (minor) and 0.6958 (Daily cloud base) although this looks unlikely to be bothered today. More distant 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 a long way off and interim bids would be seen at 0.6880 (76.4% of 0.6831/0.7047) and at 0.6850. On the topside, resistance will be seen at 0.7020 and then at 0.7045/50 which has provided the peak of the last two rallies. Beyond there 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. Right now, sellinf rallies with a SL above 0.7050 seems to be the plan.
NzdUsd: As with the Aud$, the Kiwi is a little lower on Wednesday, after having reached a high on session/trend high of 0.6737.While the daily charts still look mildly positive, the short term momentum indicators have turned heavy and some minor downside momentum may now lie in store. Now back below the 200 DMA at 0.6715, this will act as resistance ahead of the session high. Although I don’t think we head back here today, further gains would open the way to 6750 and to 0.6763 (61.8% of 0.6938/0.6481) ahead of the more distant 0.6782, (15 April high). More likely I suspect, we may slowly head towards 0.6675 (100 DMA/ (23.6% of 0.6487/0.6733), beyond which would want to look at 0.6755 and 0.6640 but not today..
*Trade of the day: July 17, 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 @1.1225. SL @ 1.1255, TP @ 1.150
Sell AudUsd @ 0.7020. SL @ 0.7055, TP @ 0.6970
Sell NzdUsd @ 0.6720. SL @ 0.6745, TP @ 0.6670
Sell WTI @ 58.35. SL @ 59.35, TP @ 57.00
Sell Silver@ 15.65. SL @ 15.90, TP @ 15.15
Sell S+P @ 3015. SL @ 3045, TP @ 2980