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

By | October 22, 2019

After a fairly rangebound session the US$ currently looks a little firmer on the short term charts against the Eur, Gbp and Aud but still looks somewhat heavy further out, suggesting that selling US$ rallies may still be the way to go. The DXY is backing this up, turning higher on the short term momentum indicators although, having said that, with very little on the calendar today another tight and rangebound session would not really surprise.

On the crosses, the Jpy appears to be under mild downside pressure, which should remain the case as long as risk sentiment remains positive, which will largely depend on the headlines coming from the trade negotiations between the US/China. The never-ending Brexit saga is producing some wide swings in Sterling and this looks set to continue, and on the crosses Sterling does look underpinned on the longer term charts.

Gold looks a little heavy but elsewhere, with a fair bit of blue on the trend table, it appears set to remain rather choppy over the next couple of days, possibly until the ECB Meeting on Thursday.


*Trade of the day: October 22, 2019; 8:03 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 @ 1.1225, TP @ 1.1000

Buy EurUsd @ 1.1105. SL @ 1.1085, TP @ 1.1200

Sell AudUsd @ 0.6885. SL @ 0.6905, TP @ 0.6780

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

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


EurUsd:  The Euro is a little lower on Tuesday but remains above the 100 DMA (1.1136) after a relatively quiet session that saw it top put at a new 2 month high, early in the session, at 1.1179.The longer term momentum indicators still suggest that further gains are possible, with the next targets, above 1.1180, being at the 61.8% Fibo level/200 DMA at 1.1205 which should see plenty of sellers, if/when we get there. Above here would run into minor downtrend resistance at 1.1235 and the next Fibo level, seen at 1.1280 (76.4%). On the other hand the short term charts look a little heavy today, and on the downside, support will now be seen at 1.1135 (100 DMA), ahead of 1.1115(Friday low) and 1.1107 (23.6% of 1.0878/1.1179). Under here would open the way to 1.1080 (minor) and to 1.1063 (38.2% of 1.0878/1.1179). Overall, 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, and  ahead of Thursday’s ECB Meeting and we may just continue to chop around in a 1.1100/1.1200 range until then.


US$Jpy:   having topped out at 108.93 last Thursday, US$Jpy has eased back a little without doing a great deal since then, and currently sits 30bp below the trend high. The short term momentum indicators are now in neutral 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 at 108.25 (Session low). Below this would allow for a return to 108.15 (15 Oct low) and 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 108.15/90 could well cover it. Further out, buying dips still seems to be the plan.


AudUsd:  The Aud$ rose to a high of 0.6879 on Monday taking out the 100 DMA (0.6858), which is currently providing support. With the longer term charts looking positive we could see another test of the highs, which is likely to remain strong resistance (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 0.6850 could then allow a move back towards 0.6830 (23.6% of 0.6670/6879) and to 0.6800 (38.2%).  Below 0.6800, unlikely today, would then look towards 0.6775 (50%) and then to 0.6750 (61.8%). There is no data today, so another tight session may lie ahead. Use 0.6830/80 as a guide.    


NzdUsd: The Kiwi traded up to 0.6415 on Monday ahead of some consolidation near 0.6400. As we said yesterday, NzdUsd carved out a bullish weekly reversal last week, suggesting that further gains may lie ahead. If that is the case, once above 0.6415, the next targets would be at 0.6426 (38.2% of 0.6790/0.6203) and then at the 12 Sept high, at 0.6450. Above this would then open the way to the 100 DMA at 0.6485 but this seems some way off. On the downside, support will be seen at the Fibo levels of the rise from the 0.6240 16 October low to 0.6415, at 0.6375, 0.6348 at 0.6328 and at 0.6307 although this seems unlikely to be seen today. Look for 0.6420/0.6375 to cover it.





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