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

By | June 26, 2019

It has been a choppy session, care of the various Fed speakers who watered down interest rate cut expectations, resulting in a reversal of the early moves of the day and ending with a late move higher in the US$, and lower for Gold and stocks. Overall, I think we should probably expect further choppy trade until the weekend G20, although any heightening in US/Iran tensions could easily see markets spike, particularly the Jpy which would see safe haven demand come to the fore.

EurUsd:  The Euro chopped around on Tuesday, reaching a high of 1.1411 before reversing lower, to end the day at 1.1370, more or less unchanged from the previous close. The short term momentum indicators now look a little heavy and it may be that we see further downside momentum, but with the dailies still looking positive I don’t think we are going too far today as traders begin to stand aside ahead of the weekend G20 meeting. Intraday support will be seen at the 200 DMA, at 1.1350, and then again nearby, at 1.1340 (23.6% of 1.0306/1.0403) and 1.1295 (38.2% of 1.0306/1.0403) although I doubt we get below here today. On the topside, resistance will be seen at 1.1400 and then at the session high of 1.1411, beyond which the next target is 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. While the short term momentum indicators look heavy, the dailies seem to be building positive momentum so buying dips is preferred but a fairly neutral stance is required and we could well chop around near current levels until the weekend and the G20 meeting.

DXY:  (96.18)  While the DXY still looks heavy on the daily charts after having broken some important support levels, it has made a mild recovery from its lows and the short term momentum indicators suggest that we could see a mild topside squeeze in the next 24 hours.  The DXY is currently sitting at 96.20, above the session low of 95.84 and 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 96.36 (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 daily 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$Jpy: Having fallen to a low of 106.77 on Tuesday, triggering stops below 107.00, US$Jpy has since recovered to chop sideways at similar levels to Monday, currently sitting at 107.15. More choppy trade 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 once again be supportive for the dollar in the short term. Minor support now lies at 107.00, below which buyers would again be seen at 106.75/80 but if this gives way there are only minor support levels at 106.50 and106.20 ahead of the next Fibo level at 105.98 (76.4% of 104.00/112.40). On the topside, resistance will be seen at 107.40/50 (minor) ahead of 107.80, 108.00 and 108.10 (23.6% of 112.40/106.78). Above here would return to the choppy, sideways price action that goes all the way up to 108.80 although that seems pretty safe for now.  While being neutral today, selling rallies may still be the plan given the negative look of the longer term charts, with safe haven demand being the dominant theme ahead of the G20..

US$Chf:  did take out the double bottom at 0.9715 and then briefly triggered stops below 0.9700, ahead of a bounce that sees it currently trade on slightly more solid footing at 0.9750, having reached a high of 0.9777, and with the short term momentum indicators looking a little more positive, we could see some mild upside momentum on Wednesday. If so, targets would be at 0.9775, 0.9785 and 0.9800. Beyond there may want to look at 0.9820 (23.6% of 1.0237/0.9693), the 100 WMA (0.9830) and the 200 WMA (0.9845), although these look a long way off right now. On the downside, support will be seen at 0.9695/0.9700 although if this gives way look for a continuation towards 0.9650 and to 0.9625. I am neutral today, but the longer term charts still tend to lean towards selling rallies for a structural move lower.

 AudUsd:  The Aud reached a session high of 0.6978 on Tuesday, meeting the resistance seen at 0.6977 (76.4% of 0.7020/0.6831) before a sharp move lower, briefly touching 0.6942, but then quickly recovering to sit near current levels. The 4 hour charts look a bit heavy now, and on the downside, with the short term momentum indicators also showing some bearish divergence and looking a little toppish, selling a rally may be the 24 hour plan. If so, support should once again arrive at 0.6940/50 and then at minor Fibo levels of the rally from 0.6831, at 0.6935, 0.6920, 0.6905 and at 0.6888 although this currently looks some way off. On the topside, resistance will again be seen at 0.6975/80 (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. As before, the daily momentum indicators look mildly positive, but without too much upside momentum and I would be surprised to see the Aud$ trade above 0.7000 today, selling rallies with a tight SL above 0.7000 may be a plan.

Gold:  made a 6 year high at 1439 on Tuesday, before reversing sharply on the back of the various Fed speakers watering down hopes of an aggressive rate cut at the next meeting, to end Tuesday at 1420. It would not surprise me if we have now seen a medium term top in Gold. The dailies are at overbought extremes and the 4 hour charts are turning lower. A period of choppy consolidation would not surprise, but the near term momentum points lower, and below 1420 may see a run back to 1400 (23.6% of 1275/1439) and then to 1380 and to 1365 although this is rather distant. While the short term/daily charts look rather overbought, the weekly charts looking increasingly positive and the upside seems to be building momentum for a move higher, and above the new 6 year high of 1439 would then look towards 1450 (12 May ’13 high), and beyond that there is little in the way of 1481 (50% pivot of 1921/1048) and even to 1500.

WTI: continues a strong run higher and currently sits at 58.70, this being strong resistance, which could slow it down somewhat. The 100 DMA and the 200 DMA are crossing lower, right at current levels and may take some of the steam out of further upside momentum, although if wrong, look for an extension towards the descending trend resistance, current at 60.30 but declining rapidly. Ahead of that, the 50% pivot of the whole move down from 76.87/42.23 lies at 59.50. A break of 60.30 would allow for steeper gains, towards 63.00/50 although that remains some way off. On the downside, support will be seen at 57.20/50 and again at 56.85 (23.6% of 50.58/58.80), but with the daily charts pointing strongly higher, buying dips does seem to be the plan, although the weeklies are stuck in neutral and are giving little guidance either way. With WTI likely to be volatile next week, after the outcome of the G20, standing aside may be prudent for now.


*Trade of the day: June 26, 2019; 8:45 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 @1.1400. SL @ 1.1430, TP @ 1.1310

Buy EurUsd @ 1.1300. SL @ 1.1275, TP @ 1.1400

Sell AudUsd @ 0.6985. SL @ 0.7005, TP @ 0.6910

Buy AudUsd @0.6900. SL @ 0.6875, TP @ 0.6975

Sell Gold @ 1433. SL @ 1443, TP @ 1405