23 Apr: Trend table outlook for FX, Commodities, Indices

By | April 23, 2019

When the clearest trend in the FX markets appears to be in EurChf, you know there is not an awful lot going on and for the time being most pairs start the post-Easter trade not too far removed from the levels seen at the end of last week. The main interest has been in the oil price, propelled higher by about 3% Monday after the Trump administration announced it was ending sanction waivers to importers of Iranian oil.

EurUsd:  EurUsd had a tight, rangebound session- 1.1235/61 in quiet Monday trade. Overall, the recent range of 1.1230 (10 April low) and 1.1320 (17 Apr high) seems likely to continue to contain the pair for now given the overall neutral stance of the charts. While the 4 hour momentum indicators look mildly supportive, we need to regain 1.1300 as an initial move, beyond which a break of the 1.1320/25 resistance is needed to see a run towards 1.1345 (100 DMA/61.8% of 1.1447/1.1182) and 1.1385 (76.4%). On the downside, below 1.1225/30 would again find support at 1.1200/10. Only a break of 1.1175 would renew the downside pressure, for a run towards targets likely to be at 1.1125 (20 June 2017 low), and eventually at 1.1100 and 1.1065. Right now, a neutral stance is required as we await a new catalyst to provide direction. There is little from Europe this week and not much from the US although the Q! Preliminary GDP is due Friday.

US$Chf: May be telling us something about future US$ strength. It has come a long way, while the other pairs have been mostly choppy, and the momentum indicators do seem positive, possibly looking for a run towards 1.0170 (7 March 2017high), beyond which opens the way to 1.0200 and even to 1.0248 (11 Jan 2017 high). On the downside, support will be seen at 1.0125 (minor) ahead of 1.0100 and 1.0055(38.2% of 0.9894/1.0160). Prefer to buy dips.

 AudUsd: Has traded with a heavy bias in thin Monday conditions, although the pair remains pretty much within its previous parameters, and a neutral stance is required ahead of tomorrow’s Australian CPI data, beyond which Australia will have another bank holiday (ANZAC Day) on Thursday, so interest this week will be limited. Downside support will arrive at 0.7125 ahead of 0.7100/0.7090 (rising trend support), below which would open the way to the rising trend support at 0.7075.  On the topside, resistance will still be seen at 0.7155 (200 HMA) ahead of 0.7170 and 0.7187, the 200 DMA. Back above 0.7200 would find strong offers at last week’s high of 0.7206, above which could then see a run towards 0.7225 (76.4% of 0.7295/0.7002) and eventually to 07265 (5 Feb high) and even to 0.7295(31 Jan high). A neutral stance seems wise for now.

NzdUsd: The Kiwi is back near its recent trend lows, currently at 0.6680 and looking heavy in early Tuesday trade. The downside may want to take another look at the post-CPI low, at 0.6665, below which opens the way to 0.6630, 0.6600 and eventually to 0.6560. On the topside, resistance will be seen at 0.6700, above which could then extend to the 200 DMA at 0.6730, although this is now some way off. A neutral stance is probably best today and a rangebound day within 0.6650/0.6700 seems likely.

US$Jpy: had another neutral session to start the week, hanging close to 112.00. The is little change in the technical outlook, with the 200 WMA now at 111.92, with a sustained break of 112.10/15 needed to push on towards 112.50/60 and then to 113.05 (61.8% of 118.61/104.01). If risk sentiment were to deteriorate, then we are likely to see a return to the 18 Feb low of 111.76 and possibly towards 111.58 ((23.6% of 109.70/112.16). Beyond there would open the way towards 111.20(38.2% of 109.70/112.16) and to 111.00, and under here would lead to 110.80/75 – 100 WMA.

On the crosses, a neutral stance is mostly required although EurChf looks as though it could be heading towards 1.1485(38.2% of 1.2000/1.1160) and then possibly on towards 1.1580 (50%) and to 1.1680 (61.8%). Buying dips is favoured, with support likely to be seen at 1.1360 (minor) and at the previous downtrend resistance seen at 1.1300.

AudNzd still looks firm in the medium term, targeting last week’s high of 1.0732 and eventually towards 1.0780/1.0800 although the 100 WMA/200 WMA have converged at 1.0750 and will provide very strong resistance. The short term momentum indicators look a bit heavy, in which case, support should arrive at 1.0625 (23.6% of 1.0275/1.0732) ahead of 1.0600 and 1.0555(38.2%)

The most interesting charts are still in Gold and Silver where, as we said before, where the possibility of a head/shoulder top remains in place with good potential downside momentum for both.  The neckline for Gold has now broken and the target is seen at 1218 although a daily close back above 1290 would negate the idea.  If the neckline for Silver were to break, the downside potential is at around 13.85oz.

Stocks: had a sideways session and the short term medium term momentum indicators currently look rather neutral for both the S+P and the DJI. As before the dailies are showing a topping tendency but the weeklies remain positive. While the all-time-high targets are in sight, in the S+P at 2940 and in the DJI at 26950, the dailies are showing a degree of bearish divergence and we need to hold above rising trend support in order to maintain the upside momentum. We are currently sitting right on the trend support and it looks as though it will be the heavy corporate reports due this week that will provide any directional move. About 1/3rd of the S+P will report this week, with big hitters to include Boeing, Coca-Cola, Microsoft, Facebook, Amazon, Ford, Exxon, and Chevron. Be nimble!

WTI: is up 3% on the back of the latest US/Iran stouche and the weekly charts remain positive. A cautious stance is required at these levels as the move happened in thin conditions – and there is a degree of bearish divergence in the 4 hour charts, hinting at the possibility of a pulback – but the major uptrend will remain intact as long as 61.80 holds, roughly in line with the 200 DMA. Ahead of that, minor trend support now lies at around 64.20.  Resistance is seen nearby, at 66.00, above which would then allow for an acceleration towards the next major target, seen at 66.80 (50% pivot of 107.65/26.03) and then at 68.00. This is unlikely to be seen immediately although as we said previously, the S/H/S target is at 70.00.  I prefer to buy dips below 65.00, but with a tight SL in place below 64.00.


*Trade of the day: April 23, 2019; 8:30 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 @1.1290. SL @ 1.1330, TP @ 1.1225

Buy EurUsd @ 1.1210. SL @ 1.1170, TP @ 1.1300

Sell AudUsd @ 0.7175. SL @ 0.7210, TP @ 0.7100

Buy AudUsd @ 0.7095. SL @ 0.7065, TP @ 0.7150

Sell Gold @ 1285. SL @ 0.1297, TP @ 1260

Buy WTI @ 64.40. SL @ 63.70, TP @ 66.50