27 Aug: Trend table outlook for FX, Commodities, Indices

By | August 27, 2019

After the wild ride seen on Monday the charts seem rather mixed in early Tuesday trade and a cautious stance is warranted. US$Jpy and the Jpy/Xx now look a little  more constructive, and after taking out a lot of stops on the downside, they may see more of a recovery in the coming sessions if the current risk-on attitude continues to hold. The EU majors have been choppy but rangebound, although the US$ does look a little better bid at the start of the session. On the other hand, the commodity currencies also seem a bit more healthy and we could see both the Aud and the Kiwi attempt to squeeze higher today, against both the US$ and the crosses.  Note that UsdCnh made a new high on Monday and the charts suggest there is more to come.

Stock markets look set to remain highly volatile and I would stand aside for now, however I still like to sell on rallies.

Overall a rather cautious stance is required today, and after yesterday’s gyrations I suspect the market will remain largely rangebound while trying to recover from the exaggerated moves.

Gold/Silver seem to be heading in the opposite directions, at least in the short term, but in the medium term I like the idea of buying gold/selling silver. I would not get involved here (Gold/Silver ratio @ $1510) but if it traded at 1450/1475 I would be looking to get long, targeting 1560/70 and eventually 1675. The long term charts look very constructive to me.


*Trade of the day: August 27, 2019; 6:19 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 @ 1.1150. SL @ 1.1185, TP @ 1.1075

Buy EurUsd @ 1.1050. SL @ 1.1025, TP @ 1.1180

Sell AudUsd @ 0.6815. SL @ 0.6845, TP @ 0.6705

Buy AudUsd @ 0.6735. SL @ 0.6695, TP @ 0.6800

Sell NzdUsd @ 0.6420. SL @ 0.6455, TP @ 0.6365

Buy NzdUsd @ 0.6360. SL @ 0.6335, TP @ 0.6420

Sell S+P @ 2900. SL @ 2925, TP @ 2805

Buy Gold @ 1505. SL @ 1490, TP @ 1555

EurUsd:   is back at 1.1100 on Tuesday and after a choppy session, the technical levels remain largely intact. On the topside, the first target is once again seen at around 1.1150/60 (50% of 1.1249/1.1052// Session high; 1.1162), beyond which, look for further offers to arrive at 1.1175(61.8%) ahead of 1.1200 (76.4%). Above here, the 100 DMA and the neckline of the HS formation remains at 1.1210/15, which repeatedly stood in the way of further progress 2 weeks ago and will remain an obstacle if/when we get back there. The resistance at 1.1215/1.1230 is very strong, but above which would open the way to 1.1250 ahead of 1.1264 (61.8% of 1.1411/1.1025), 1.1283 (200DMA) and 1.1320 (61.8%). On the downside the 200HMA/100 HMA/55HMAs are all crossing right here at 1.1100 and will provide a degree of support, but below which we could then see a return to 1.1065 ahead of 1.1050. This seems likely to hold for the time being but I suspect that we could see an eventual return to the trend low of 1.1025 (31 July low), ahead of the 1.1000 H/S target. Further out, if/when we get below 1.1000, there is good trend support at 1.0965 – at which point I would square up any short Euro positions and take a nimble stance. Use 1.1150/1.1050 as a guide today but note that the German Q2 GDP data is due, and which is widely expected to print the second quarter of economic contraction, which officially puts Germany into a technical recession and could well weigh on the downside for the Euro.


US$Jpy:  fell sharply on Monday’s open, to a new 9 month low of 104.44 ahead of a strong bounce, to finish the day above 106.00 and not too far from the highs of 106.36. A cautious stance is now required but with a lot of long positions now stopped out, further gains may be on the cards as the charts align higher. The 100 HMA/200 HMA are crossing at 106.30/40, which will provide the first resistance, with further offers to be seen at 106.70/76 (23/15 Aug highs), and then at the 13 Aug high of 106.97. Above 107.00 would open the way to 107.26 (2 Aug high) and to 107.45 (61.8% of 109.31/104.44) ahead of 108.00 and even 108.15 (76.4) albeit unlikely in the near term.  Support will today be seen at 105.80, 105.50, at 105.15 and at 105.00 (all minor). Beneath 105.00 there would again be little support ahead of Monday’s 104.44 low and then the January flash-crash low (104.01). Cautiously buying dips seems the plan today.


AudUsd:  The Aud$ recovered from its early selloff to 0.6688, and has since spent much of the session in grinding higher to reach 0.6787, closing nearby at 0.6775. With the momentum indicators now looking mildly supportive a run towards 0.6800 would not surprise, and as long as there are no negative trade comments, I suspect this could be the way of it today. I doubt we see it much above 0.6800 today but if wrong, further offers would arrive at 0.6820, the minor trend high (8 Aug) and then at the Fibo resistance at 0.6830 (38.2% of 0.7081/0.6675) ahead of 0.6878 (50%), 0.6900 and then at 0.6926 (61.8%). Bids will now arrive nearby at 0.6750 and then at 0.6735 ( minor -Friday/14 Aug lows), below which would open the way back to 0.6700 and to 0.6688 – the Monday low, which comes ahead of 0.6675 (7 Aug low). Further out, below 0.6675, there is minor support at 0.6660, but under there would open the way to 0.6500 and, further out, the next major Fibo level is not seen until 0.6250 (76.4% of 0.4773 (April 2001)/1.1082 (July 2011)).  We are probably looking at a range bound session, but buying dips currently seems to be the plan. Use 0.6750/0.6815 as a guide today.


NzdUsd: As with the Aud$, the Kiwi has bounced off an early Monday low of 0.6340 to trade up to a high of 0.6402. The momentum indicators are pretty neutral but may have a minor upside bias today, and this being the case, resistance will again arrive at 0.6400/10, (Friday high/200 HMA) and then at 0.6428 (20 Aug high), 0.6445 (23.6% of 0.6789/0.6340), at 0.6460 (minor),  0.6475 (12 Aug high), and again at 0.6498/0.6500 (9 Aug high). Above here would open the way to 0.6512 (38.2% of 0.6789/0.6340) although not today. The longer term charts are heavy though, so I still prefer the downside from a structural perspective and the immediate support should arrive at 0.6375/80 ahead of 0.6340 (Monday low), which briefly took out the January 2016 low at 0.6347, and should therefore be very strong support if/when we see it again. Once below 0.6340, it may be a quick trip to 0.6300, below which the next meaningful support is seen at the September 2015 low at 0.6235, while more distant bids would arrive at the August 2015 low at 0.6125.