The FX markets have been rather choppy on Tuesday, as expected, although US stocks have had a strong day, +2% and the longer-term charts are beginning to suggest that we have seen the worst of the downside correction. That remains to be seen and I expect conditions to remain highly volatile.
The dollar is giving us little hint in either direction although US$Jpy looks a bit more positive in the short term. Cable still looks bid too although with the EU Leaders Brexit Summit beginning today I think Cable is better left alone.
On the crosses, the clearest near-term view is the chance of both AudJpy and NzdJpy heading a little higher, with NzdJpy having an objective of around 74.40, as we mentioned yesterday.
The metals look a bit heavy today and I would not be surprised to see Gold head back towards 1220/1215 over the next couple of sessions.
All up, another choppy session foremost asset classes would not surprise, at least ahead of the FOMC Minutes, which should offer few surprises, in that we should see the Fed looking to continue their policy of steadily raising rates into 2019, with another hike on the cards for December. Elsewhere, aside from the Fed and Brexit headlines, the main chance of some volatility in the currency markets today willcome via the inflation data due from both the UK and the EU.
Economic Calendar today:
Wed: EU Brexit Summit, UK/EU CPI, FOMC Minutes, US Housing Starts/Building Permits
*Trade of the day: October 17, 2018 7:38 AM(AET)
*This is a personal opinion only, based on the look of the table below, and carries no guarantee of success.
Range Trade: EurUsd: 1.1525/1.1625
Range Trade: US$Jpy: 111.75/112.75
Sell EurUsd @ 1.1640. SL @ 1.1680, TP @ 1.1500
Range Trade: AudUsd: 0.7070/0.7170
Buy NzdJpy @ 73.50. SL @ 73.25, TP @ 74.35
Buy Gold @ 1230. SL @ 1237, TP @ 1217