21 Feb: Trend table outlook for FX, Commodities, Indices

By | February 21, 2019

FX Markets have had a choppy session  with the FOMC Minutes providing very little clarity as the price action remains choppy and directionless, albeit that the US$ does remain under some downside pressure.

Right now this theme looks set to continue, with the US$ looking set to remain under some downside pressure, although the short term momentum indicators do hint that the dollar may stage a mild recovery. A poor set of EU PMIs, later today, would place the Euro under pressure and could help the dollar on its way – we shall see.. The medium term outlook for the dollar remains clouded though and further volatile but rather directionless trade seems to be on the agenda.

As before, the Jpy is also under pressure although it had a narrow range on Wednesday, but the crosses look relatively underpinned and trading from the long side is therefore preferred. EURJPY, GBPJPY both look as though they still have some positive momentum although this will be dependent on further positive trade headlines (and some decent EU PMIs). Any negativity will seem them turn lower.

There is therefore little transparency in the FX sector and the real action appears to be in US stocks and in oil, where WTI still seems to be a “buy-on -dips” scenario. As we said previously, WTI is now well above the neckline of the Head/Shoulders, currently trading at 57.25. The target here is at around $68.00 and the SL should be just below 54.00. In the near term though, note that decent resistance lies ahead at the 100 DMA (56.85).

US stocks have been trading within a narrow range but remain unchanged at the end of the day and relatively underpinned. Once again, buying dips is favoured although any negative “trade-talk” headlines could see stocks reverse lower. Right now, investors do not seem to anticipate this happening.

Gold and Silver remain firm but may be showing signs of topping out, so cautiously selling rallies may be a plan. Having said that, the 100 MMA is at 1350 and we may need to test that level, so selling it there is preferred with a tight SL above.

———————————————————————————————————————

*Trade of the day: February 21, 2019; 10.45 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 @ 0.7210. SL @ 0.7245, TP @ 0.7120

Buy AudUsd @ 0.7115. SL @ 0.7085, TP @ 0.7200

Range Trade: EurUsd: 1.1290/1.1390 (SL 50 pips either side)

Buy US$Chf @ 0.9970. SL @ 0.9940, TP @ 1.0100

Buy WTI @ 55.80. SL @ 54.50, TP @ 58.00

Sell Gold @ 1350. SL @ 1360, TP @ 1335