2 May: Trend table outlook for FX, Commodities, Indices

By | May 2, 2019

The Statement from the FOMC Meeting and Powell’s Press Conference dampened any chance of a future rate cut and seems to have put a risk-off mood right across the board, with plenty of red on the heat map. The short term momentum indicators suggest that there could be more to come in the session ahead, although more likely, we are going to remain fairly rangebound while awaiting tomorrow’s NFP outcome. The EU PMIs will be in focus and could push the Euro around a bit today, altohugh I doubt we see anything too directional.

EurUsd: having reached a session high of 1.1265, the Euro is now back at 1.1200 and looking heavy heading into Thursday trade. Minor resistance is now seen 1.1225/30 ahead of the 1.1265 high, and beyond that would then target 1.1300 and 1.1318/25(61.8% of 1.1447/1.1110/17 April high) although this seems unlikely ahead of the NFP. Near term support sits at 1.1180/85 and then again at 1.1145/50 ahead of the recent low at 1.1110. Below 1.1100 would target 1.1060/65, where the base of the descending wedge should see decent bids. A downside break would then open the way to 1.1020 (minor) and to 1.1000. I still prefer to be long US$, short Euro.

DXY:  (97.65) is a bit higher at the start of Thursday trade after having recovered from an earlier selloff that saw it trade down to a low of 97.15. The daily momentum indicators look indecisive although the weeklies do show some very mild positive momentum. I doubt that we do too much today, and on the downside support will again arrive at 97.25/15, but  below which there is not too much to hold it up until the /12 April low at 96.75 and the 100 DMA/ Rising trend support, seen at 96.67. On the other hand, a topside squeeze could see a return to 98.00, ahead of a return to the 98.33 trend high. Further gains would see a run towards 98.80, where the top of the rising wedge lies, and then towards 100.10 (76.4% of 103.82/88.25).A cautious stance is required although I still prefer to buy dips.

AudUsd: The Aud did not much like the FOMC outcome and has traded down to 0.7007, where it has found some support above 0.7000.  The short term momentum indicators look pretty heavy though and below 0.7000 will find initial support at the recent 0.6988 low, below which would open the way for a run towards 0.6970, 0.6950 and eventually to 0.6900. On the topside, resistance will arrive at 0.7030/40 and again at 0.7055/60. I doubt we see it up here anytime soon, but if wrong 0.7070 (38.2% of 7206/0.6988), 0.7100, and then 0.7120 (100 DMA) will be levels to watch. I prefer to sell rallies in anticipation of the inevitable rate cut, but we may see better levels to do so.

NzdUsd: As with AudUsd, the Kiwi did not like the FOMC outcome and currently sits at the familiar 0.6620 pivot after having been unable to overcome the 0.6880/85 resistance earlier in the day.  Near term resistance will now be seen at 0.6630 and at 0.6650 (200 HMA) ahead of 0.6685 and 0.6700. Further out, above here would open 0.6715 (38.2%) and the 200 DMA at 0.6728, although not today I suspect. On the downside, support will be seen at 0.6600 and 0.6580. In the medium term, look for the chance of a decline towards 0.6560 (January flash crash low) and eventually to the long term rising trend support at 0.6500 – from March 2009.

US$Jpy: continues to look heavy although being Japanese Golden week the action may be limited . Wednesday saw the pair reach 111.06 but has recovered to currently sit just above the Fibo level at 111.38(38.2% of 109.70/112.39). Below the session low would open the way through 111.00, and under here would lead to 110.80/75 – 100 WMA/rising trend support, which should be strong. On the topside, minor resistance will again be seen at 111.80/85 and at 112.00 (200 WMA) and then at 112.40. Further targets would then be at 112.50/60 and eventually ay 113.05 (61.8% of 118.61/104.01) although this is a long way off. The 4 hour and daily charts look a little heavy and a build in negative risk sentiment (ie lower stock markets) would see the downside come under more sustained pressure.

On the crosses, The Jpy and Gbp both look generally firm, while the Aud and Nzd both seem under pressure. Selling AudJpy, NzdJpy ,EurGbp or buying EurAud, GbpAud or GbpNzd may be a plan although I prefer to remain focused on the US$ moves right now as I suspect we are on the verge of a decent move higher.

Gold: did the right thing on Wednesday in holding below the 1285 area and fell $10 oz, to currently sit at 1276 and looking heavy. As before, should the SHS formation work as planned, the downside target is seen at 1218 so I prefer to stay short. Ahead of that, the immediate downside target is at 1267, ahead of 1253 (200 DMA).On the topside, resistance will be seen at 1285 again, so leave stops above here.. Tight stops should be in place above the 100 DMA, currently at 1292.

Silver: led the way on Wednesday, down by 1.9% to 14.60, and finally breaking the HS neckline in the process. Further downside potential now looks possible, where support would be seen at 14.45 (76.4% of 13.89/16.21), 14.20 (minor) and at 14.00 but with the HS target being at 13.85. On the topside, resistance will be seen at 14.85/90 and at 15.00/05 (50% pivot of 13.89/16.21), but above which could then see a run toward the 100 DMA at 15.32. prefer to stay short.

Stocks:, The S+P made a key day reversal from its new all-time high (2960) and looks a little vulnerable heading into Thursday and ahead of tomorrow’s NFP result. If long, I would keep stops quite tight on both the DJI and the S+P. Today may be rangebound while waiting on tomorrow’s US data but the downside does look like the point of weakness right now.

WTI: remains pretty much unchanged (63.45) after the FOMC outcome, but remains near the 4 month rising trend support, leaving the medium term uptrend intact. The dailies though are pointing lower, and a downside break  below the session low of 72.75 would open the way to 62.20 and then to 61.70 (both minor) ahead of the 200 DMA/Fibo support @ 23.6% of 42.23/66.57, currently at 60.85. On the topside, resistance will be seen at 64.70 (200 HMA) above which opens 65.00+. Right now, this now looks a good sell opportunity.


*Trade of the day: May 2, 2019; 8:12 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 @1.1240. SL @ 1.1270, TP @ 1.1145

Buy EurUsd @ 1.1145. SL @ 1.1105, TP @ 1.1235

Sell AudUsd @ 0.7045. SL @ 0.7070, TP @ 0.6960

Sell WTI @ 64.75. SL @ 65.30, TP @ 63.00

Sell Silver @ 14.85. SL @ 15.08, TP @ 14.25

Sell Gold @ 1280. SL @ 12952, TP @ 1255