The US$ had a mixed session on Friday, making gains against the Euro, Aud and Kiwi as growth concerns increased following the release of the EU PMIs, while losing out against the Jpy, as safe-haven demand increased. Coming on top of the extremely dovish outlook from the Fed’s economic projections earlier in the week, Friday’s poor EU manufacturing PMIs seems to suggest that the world’ss major economies may well be heading for a recession. This would do risk assets no good at all, so selling the Aud$, stocks etc, and buying Jpy, Chf is preferred.
In the short term, the charts back this up although the hourlies are now a little oversold so we may see a near term squeeze higher for each base currency (Eur, Aud, Kiwi), but looking to sell rallies seems to be the plan. Further out, the momentum indicators are not really showing too much directional bias, so it maybe that the conditions just remain choppy. Sterling seems to be bid in the short term, but is probably best left alone as we head towards the Brexit date, which is due on Friday. If the UK parliament fail to pass the 3rd version of Theresa May’s exit plan, then a “no-deal” split looks highly likely, which would see Sterling dive much lower, taking the Euro with it and sending the US$ sharply higher. The weekend story of
On the other hand, a lower growth outlook, will do US yields no good, so the US$ should only be bought selectively and I suspect that remain mixed against the majors, with the DXY likely to remain choppy between 95.85/97.25 for the coming week.
On the crosses, AudNzd seems to be heading slowly towards parity. Stg looks ok too, against the Aud and the Kiwi, but is best left alone until Brexit becomes a little clearer. The Jpy crosses seem to be under pressure and looking for levels to sell AudJpy or EurJpy may be a plan.
The US stock indices had a tough session and if the growth worries increase, then we are going to head lower. In the meantime the S+P is sitting on uptrend support. Selling a break of 2800 may be a plan but until then I remain neutral although would look to sell a rally towards 2825.
WTI headed lower and took out the SL level just below 59.00. While the weeklies still look positive, it may be that we have now run out of steam on the topside so for now I prefer to stand aside. Again, if the lower growth outlook comes about, then oil will head lower
Keep an eye on Silver as the daily charts hint that a possible head/shoulder formation is forming. The neckline is not seen until 14.90, but if it breaks, the target is at around the November low at 13.90.
*Trade of the day: March 25, 2019; 9:01 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 @1.1330. SL @ 1.1370, TP @ 1.1215
Buy EurUsd @ 1.1180. SL @ 1.1845, TP @ 1.1300
Sell AudUsd @ 0.7110. SL @ 0.7155, TP @ 0.7000
Sell AudJpy @ 78.50. SL @ 79.05, TP @ 77.20
Sell Silver @ 15.75. SL @ 16.05, TP @ 14.75
Sell S+P @ 2825. SL @ 2855, TP @ 2725