25 June: Trend table outlook for FX, Commodities, Indices

By | June 25, 2019

Apologies for the lack of an update at the start of the week; I had no internet at all for a couple of days.

Anyway, the big moves have continued in the wake of last week’s FOMC Meeting, with the US/Iran tensions and the possibility of increased trade anxiety between the US/China adding to the sharp selloff in the US$. The soft dollar has also helped to underpin Gold, which continues to rally strongly, while elsewhere, stock markets are chopping around near their all-time highs on Tuesday, underpinned by very soft US bond yields. WTI remains firm because of the fears of oil market disruption form the middle east, while eyes are now turning to the G20 meeting at the weekend.

EurUsd: The Euro continues to take advantage of the dollar’s weakness, in reaching 1.403 on Monday, and is closing the session above the important Fibo level of 1.1390 (61.8% of 1.1569/1.1105). The next target is now at 1.1447 (20 March high), which ties in with (23.6% of 1.2555/1.1106) and beyond that would open up 1.1460 (76.4% of 61.8% of 1.1569/1.1105) and 1.1500 although, with the 4 hour momentum indicators becoming overbought we may struggle to get there today, and could well chop around near current levels until the weekend and the G20 meeting. On the downside, intraday support will be seen at 1.1365/70, 1.1350. Below that would then target 1.1330 (23.6% of 1.0306/1.0403) and 1.1300 although a fairly neutral stance is required today, but overall, buying dips with a SL placed below 1.1300 may be the plan on Friday.

DXY:  (96.00) The DXY looks heavy, having now broken some important support levels, and currently is sitting at 96.00 (23.6% of 88.25/98.37), below which, the next target would seem to be the 20 March low of 95.74.  A break of that would look to the 31 Jan low at 95.16 and the 10 Jan low at 95.03. The initial resistance lies at 96.22 (session high) and at 96.55 (200 DMA). Beyond here seems unlikely today although further levels to watch would be at 96.65 (minor) and then at 97.08 (100 DMA). The indicators still look heavy although momentum is not strong but selling rallies in the dollar does still seem favoured, albeit with a tight SL in place.

US$Jpy: Having fallen to a low of 107.05 on Friday, US$Jpy has since chopped sideways, and more of the same looks likely today while waiting on the outcome of the G20, although any safe haven demand could produce another downside push. Note the bullish divergence on the 4 hour charts, which should be supportive for the dollar in the short term. Support at 107.20 may hold the dollar up, but below 107.00/05 would only find minor levels at 106.80, 106.50, 106.20 ahead of the next Fibo level at 105.98 (76.4% of 104.00/112.40). On the topside, resistance will be seen at 107.50/55 (minor) ahead of   107.80, 108.00 and 108.14 and even to 108.32 (23.6% of 112.40/107.05)  While being neutral today, selling rallies may still be the plan given the look of the longer term charts, with safe haven demand being the dominant theme ahead of the G20.Keep an eye on Gold – a continuation of that rally would suggest further downside for the dollar

US$Chf:  is sharply lower again on Tuesday as safe haven demand for the Chf continues and helped to send the pair down to a low of 0.9710 before ending the day at 0.9720, where it is trading in line with the 10 Jan low at 0.9715. The short term charts are now oversold, but there is currently little sign of a bounce, and if 0.9700 gives way look for a continuation towards 0.9650 and to 0.9625. If the dollar can make a double bottom at current levels, we could see a squeeze higher, where targets would be at 0.9750, 0.9785 and 0.9800. Beyond there may want to look at the 100 WMA (0.9830) and the 200 WMA (0.9845), although these look a long way off right now. I am neutral today, but the longer term charts tend to lean towards selling rallies for a structural move lower.

AudUsd:  The Aud has taken advantage of the US$ weakness and reached a session high of 0.6968, falling just short of the resistance seen at 0.6977 (76.4% of 0.7020/0.6831) and 0.6985 (55DMA), a break of which would open the way to 0.7000 and above, where the 100 DMA lies at 0.7040 and the 200 DMA at 0.7105..  The daily momentum indicators look mildly positive, but without too much upside momentum, and I would be surprised to see the Aud$ above 0.7000 today. On the downside, with the short term momentum indicators showing some bearish divergence and looking a little toppish, selling a rally may be the 24 hour plan. If so, support should arrive at 0.6945/50 and then at minor Fibo levels of the rally from 0.6831, at 0.6935, 0.6915, 0.6900 and at 0.6883 although this currently looks some way off. Selling rallies with a tight SL above 0.7000 may be a plan.

Gold:  is now at a 6 year high at 1420, and as we said last week, a break of the March 2014 high of 1392 would open the way to 1433 (28 August 2013 high) and then to 1450 (12 May ’13 high). This now looks a lot closer to reality, and beyond that there is little in the way of 1481 (50% pivot of 1921/1048) and even to 1500. On the downside, support will be seen at 1400, and at 1380 and then at 1365 although this is becoming increasingly distant. The short term charts look rather overbought but with the daily/weekly charts looking increasingly positive, the upside seems to be building momentum for a move higher, with some analysts talking of 1600. That remains a long way off at this stage.


*Trade of the day: June 25, 2019; 8:23 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 @1.1425. SL @ 1.1465, TP @ 1.1325

Buy EurUsd @ 1.1360. SL @ 1.1320, TP @ 1.1460

Sell AudUsd @ 0.6985. SL @ 0.7010, TP @ 0.6900

Buy AudUsd @0.6915. SL @ 0.6890, TP @ 0.7000

Buy Gold @ 1390. SL @ 1360, TP @ 1480