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

By | October 21, 2019

The US$ headed lower into the weekend and it seems set to remain under pressure in the coming session although it is slightly firmer than the Friday close after yet another delay to the Brexit vote, which seems to diminish the chance of the UK leaving the EU with a “no-deal divorce”, on October 31st. I suspect that in the absence of any major data until Thursday’s ECB meeting we could well chop around near current levels although any major Brexit news or any new headlines coming from the US China trade negotiations could change that outlook very quickly. Right now it looks as though the Brexit situation is going to see a further delay, possibly taking us into 2020, which I think might keep Cable underpinned because a “no-deal divorce” will have been avoided although it is a little lower in early Asian trade on Monday.

Elsewhere, Stocks and Commodities all look fairly mixed on the charts and a neutral stance is probably best.

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*Trade of the day: October 21, 2019; 9:22 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 @ 1.1185. SL @ 1.1205, TP @ 1.1000

Buy EurUsd @ 1.1105. SL @ 1.1085, TP @ 1.1195

Sell AudUsd @ 0.6880. SL @ 0.6905, TP @ 0.6780

Buy AudUsd @ 0.6810. SL @ 0.6780, TP @ 0.6880

Sell Gold @ 1500. SL @1515, TP @ 1875

Buy NzdUsd @ 0.6325. SL @0.6290, TP @ 0.6390

 

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EurUsd:  The Euro made a 2 month high on Friday in taking out the 100 DMA (1.1140) and took out the 26th August peak of 1.1163, by closing the week at the high of 1.1170. The momentum indicators suggest that further gains are now possible, with the next targets being at the 61.8% Fibo level at 1.1205 and the 200 DMA at 1.1215. Above here would run into minor downtrend resistance at 1.1235 and the next Fibo level, seen at 1.1280 (76.4%). On the downside, support will now be seen at 1.1138 (100 DMA), ahead of 1.1115(Friday low) and 1.1100 (23.6% of 1.0878/1.1170). Under here seems unlikely today but further losses would open the way to 1.1080 (minor) and to 1.1058/45 (38.2% of 1.0878/1.1170// 55 DMA). Looking at the charts suggests buying dips may be the way to go although with the ongoing issues over EU growth I would not be getting too carried away on the upside ahead of Thursday’s ECB Meeting and we may just chop around in a 1.1100/1.1200 range until then.

 

US$Jpy:   has currently topped out at 108.93 on Thursday, and eased back a little without doing a great deal on Friday, to close the week at 108.40 and keeping the uptrend still intact. The short term momentum indicators are looking a little heavy on Monday but the longer term charts look positive, and the daily charts still suggest that we may be building a reverse head shoulder base, with a possible target of around 112.50 although that remains a long way off. In the meantime we need to break above 108.60 (100 HMA), ahead of 109.00/05 (100 DMA), which would then open the way to 109.30/35, which will be strong resistance if/when we get there (1 August high, 61.8% of 112.40/104.45). Further out, we may look towards 109.92 (30 May high) and, above 110.00, to 110.50 (76.4%). On the downside, minor support will now be seen right here at 108.40 (Friday low/23.6% of 106.48/108.93). Below this would allow for a return to 108.15 (200 HMA) and then to 108.00 (38.2% of 106.48/108.93) and then to 107.87 (23.6% of 104.45/108.93), although this looks unlikely to be seen today. More distant Fibo levels are seen at 107.70 and 107.40 and for Monday I am relatively neutral and suspect that 108.00/70 could well cover it. Further out, buying dips still seems to be the plan.

 

AudUsd:  The Aud$ rose to a high of 0.6856 on Friday where it ran into the 100 DMA, but with momentum looking positive that could well be taken out in the sessions ahead. If so, look for progress towards 0.6876/78 (50% of 0.7081/0.6770/Daily cloud top), above which could then stretch to the 12 September high at 0.6894 and eventually to 0.6925 (61.8% of 0.7081/0.6770). On the downside, back below 0.6830 could then allow a move back towards 0.6815 (23.6% of 0.6670/6856) and to 0.6800.  Below 0.6800 would look towards 0.6785 (38.2% of 0.6670/6856) and then to 0.6765 (50%) although this seems unlikely today.  

 

NzdUsd: The Kiwi traded higher on Friday in reaching 0.6390, where it finished the week, and carved out a bullish weekly reversal in the process, suggesting that further gains may lie ahead. If so, 0.6390 (76.4% of 0.6449/0.6203) will continue to provide the initial resistance, beyond which, the next target would be at the 12 Sept high at 0.6450. On the downside, support will be seen at minor Fibo levels of the rise from the 0.6240 16 October low, at 0.6355, 0.6330 at 0.6315 and at 0.6297 although this seems unlikely to be seen today.

 

 

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