18 June: Trend table outlook for FX, Commodities, Indices

By | June 18, 2019

There is a fair bit of blue on the heat-map today, signalling that consolidation that we can expect leading into Wednesday’s FOMC Meeting. The main interest seems to lie in the commodity currencies (Aud and Nzd), and in Sterling, which all look pretty heavy, so trading these from the short side remains the preferred theme. Elsewhere I would stand aside for now and wait for the Fed. I am leaving Sterling alone altogether as it is entirely headline driven by Brexit. Right now though, things look pretty bleak for Sterling both against the US$ and on the crosses.

EurUsd: The Euro is pretty much unchanged on Tuesday, currently at 1.1220, underpinned by the Fibo support at 1.1205 (61.8% of 1.1115/1.1346). The short term momentum indicators are fairly neutral and not suggesting a great deal although Mario Draghi will be speaking today and, if dovish on the outlook for the EU,  we could see a run below the 6 June low of 1.1200, towards 1.1170 (76.4% of 1.1115/1.1346). A break of this would then open the way to 1.1150 and lower, where 1.1135 is minor support, ahead of the 30 May low of 1.1115 and the 23 May spike low of 1.1106. Selling rallies is still my preferred position, with short term resistance to be seen at the session high of 1.1246 and then at minor Fibo levels at 1.1255 and 1.1275 and 1.1290. While selling rallies is the plan, it may be that we end up not doing too much directionally ahead of Wednesday’s Fed meeting, and profit-taking on short positions may limit the downside as we head towards the event. Watch out for Draghi today.

AudUsd:  The Aud once again traded in a heavy fashion throughout Monday, finishing at session lows, at 0.6850, and looking very heavy heading into today’s RBA Minutes. The daily momentum indicators are turning lower and, on the downside, a break of 0.6850 would open the way to January 2016 low at 0.6826. Further out, a move towards 0.6600/0.6700 seems to be on the cards although much will depend on the Fed and the RBA and what monetary policy looks like further down the track. A rally will find offers at 0.6870, 0.6885/90 (0.6888= 23.6% of 0.7020/0.6848), at 0.6900 and then at 0.6915 (38.2% of 0.7020/0.6848) although this looks unlikely to be seen again for a while, and I prefer to remain structurally short Aud$.

NzdUsd: The Kiwi consolidated on Monday, squeezing up to 0.6515 before reversing to finish near the current trend low, at 0.6487, and just above the 23 May low of 0.6482. It still looks heavy though and below 0.6480 would target 0.6464 (26 Oct 2018 low) and then 0.6426 (9 Oct ‘18 low). On the topside, resistance will be seen at.6515 (Session high), ahead of 0.6525 (minor) and 0.6533 (23.6% of 0.6681/0.6487). Selling rallies with a SL placed above 0.6535 currently seems to be the plan.

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*Trade of the day: June 18, 2019; 8:01 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 @1.1245. SL @ 1.1275, TP @ 1.1185

Buy EurUsd @ 1.1170. SL @ 1.1140, TP @ 1.1225

Sell AudUsd @ 0.6880. SL @ 0.6920, TP @ 0.6800

Buy US$Jpy @108.20. SL @ 107.90, TP @ 109.00

Sell NzdUsd @ 0.6515. SL @ 0.6545, TP @ 0.6425