Risk aversion is once again the name of the game on Tuesday as trade concerns, slowing economic growth and political tensions continue to dominate the price action ahead of the all-important Fed meeting on Wednesday.
Stocks are down by 2% at the end of Monday, still look very heavy and are still a sell on rally, while both AudJpy and NzdJpy appear to be heading lower in the medium term as the Jpy benefits from safe-haven demand. Both US$Jpy and AudUsd look heavy as well and I prefer to be short.
The EU majors are slightly higher but as with yesterday, I do suspect that ahead of Wednesday’s FOMC decision conditions are likely to remain generally choppy and without too much directional movement, so range trading conditions may well prevail. Developments in the US/China tensions – one way or the other – may change all that.
I am more neutral on the metals today, so would stand aside, but WTI is down by around 3.5%, below 50.00 and looks to be heading towards support levels at 47.75 and possibly to 45.50 (61.8% of 26.03/76.87).
*Trade of the day: December 18, 2018; 7:50 AM(AET)
*This is a personal opinion only, based on the look of the table below, and carries no guarantee of success.
All trades are good till 5.00pm NY time. All “in the money trades” should have the SL raised to break-even, or managed manually. All “out of the money trades” should keep original SL in place.
Sell AudUsd @ 0.7200. SL @ 0.7250, TP @ 0.7100
Sell EurUsd @ 1.1410. SL @ 1.14650, TP @ 1.1310
Sell US$Jpy @ 113.10. SL @ 113.80, TP @ 111.80
Sell WTI @ 50.00. SL @ 51.05, TP @ 47.75
Sell S+P @ 2560. SL @ 2590, TP @ 2500