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

By | October 22, 2018

It looks as though we could see some strength in the Euro on Monday, as least according to the short term momentum indicators, against both the US$ and also on the crosses, although further lout the picture looks a little cloudy and overall I suspect we are still locked in the broad 1.1400/1.1700 range of recent weeks. Today though, I prefer to buy the Euro on dips but without looking for too much directionally, which may be the case for much of the week given the fairly empty calendar ahead of Thursday’s ECB Interest Rate Decision, although Italy is due to report its 2019 budget proposal on Tuesday. This is expected to be rejected and is likely to add further headwinds to a more sustained recovery in the Euro and for the medium term outlook I still like to sell rallies .

Elsewhere the dollar looks set to remain choppy, with a sideways bias early in the week, although the Kiwi may seem some upside, particularly against the Aud$ which may not like the look of a hung parliament following the weekend by-election. It is a NZ holiday today though so liquidity/interest will be thin.

US Stocks still look heavy in the medium term and I suspect are a sell-on-rally scenario.

Gold looks underpinned in the medium term, but a stronger dollar would create headwinds and Silver does not appear to be following it higher. WTI once again looks heavy on th dailies but we may see better levels to sell into.

On the crosses, as previously mentioned, the Euro looks firm in the short term, while AudNzd appears to be breaking lower and AudCad looks as though it may see some strength. In that case, long NzdCad may be a plan?

Economic Calendar:

Mon: NZ Labor Day Holiday, BuBa Monthly Report, Chicago Fed National Activity Index

Tue: German PPI, Richmond Fed Mfg Index, EU Preliminary Consumer Confidence, Fed’s Kashkari Speech

Wed: Japan/EU/US Preliminary PMIs,

Thur: NZ Trade Balance, German Consumer Confidence Survey, German IFO Business Climate/Expectations, ECB Interest Rate Decision, US Pending Home Sales, Durable Goods Orders, Goods Trade Balance, Kansas Fed Mfg Activity

Fri: Japan – Tokyo CPI, US GDP/US Personal Consumption/Expenditure, Michigan Consumer Sentiment Index, ECB Speeches – Draghi/Coeure

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*Trade of the day: October 22, 2018 6:53 AM(AET)                          

*This is a personal opinion only, based on the look of the table below, and carries no guarantee of success.

Range Trade: EurUsd: 1.1475/1.1575 (SL 30 pips either side)

Range Trade: US$Jpy: 112.00 /112.85 (SL 30 pips either side)

Range Trade: AudUsd: 0.7050/0.7135 (SL 30 pips either side)

Sell EurUsd @ 1.1570. SL @ 1.1610, TP @ 1.14600

Sell AudUsd @ 0.7140. SL @ 0.7170, TP @ 0.7050

Sell AudNzd @ 1.1850. SL @ 1.1880, TP @ 1.1775