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

By | June 27, 2019

Markets have generally been choppy on Wednesday as traders square up ahead of the G20. The most notable move has been seen in the weakness of the Jpy, both against the US$ and on the crosses. Unwinding of safe haven Jpy positions has been as Donald Trump retains an upbeat mood ahead of his meeting with Chinese President Xi, which has resulted in a more positive mood through the financial markets and a cutting of worse-case- scenario risk, including holding long Jpy positions. The other notable move was in Oil, which rallied by around 1%, but the FX markets are mostly unchanged, as are stocks.

EurUsd:  The Euro chopped around on Wednesday (1.1347-90), and the short term momentum indicators now look a little mixed so it may be that we see further consolidation and I don’t think we are going too far today – unless the German CPI/US GDP spring a surprise – as traders begin to stand aside ahead of the weekend G20 meeting. Intraday support will once again 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 Tuesday 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.

DXY:  (96.18)  The DXY is unchanged today and while the index still looks heavy on the daily charts, the short term momentum indicators look mildly positive and suggest that we could see a mild topside squeeze in the next 24 hours.  The DXY is currently sitting at 96.18, above 200 WMA at 95.97, the trend low of 95.84, seen on Tuesday, 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 96.35/40 (minor) 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 currently sit near session highs of 107.85 as traders continue to unwind long Jpy positions ahead of the weekend G20 meeting. The 4 hour charts still look positive, which should once again be supportive for the dollar in the short term and, on the topside, resistance will again be seen at 107.85 (200 HMA) ahead of 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, with the next Fibo levels seen at 108.90 (38.2% of 112.40/106.78) although that seems pretty safe for now. Minor support now lies at  1075., 107.35 (100 HMA) and at 107.00, below which buyers would 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).  Given the positive look of the 4 hour charts and the possible basing formation in the dailies, trading the US$ from the long side seems favourable although I suspect that we remain choppy today between 107.20/108.00

US$Chf:  having taken out the double bottom at 0.9715 on Tuesday, triggering stops below 0.9700, the US$ has since recovered well, to currently sit at 0.9775. With the 4 hour momentum indicators still looking positive, we could see some mild upside momentum on Thursday, where targets would be at 0.9785 (session high) 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 0.9740/50 and then 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, although the short term indicators hint at some mild upside momentum, while the longer term charts still tend to lean towards selling rallies for a structural move lower. Selling rallies may still be the plan.

AudUsd:  The Aud reached a session high of 0.6994 on Wednesday, after a relatively tight range although with a notably bid tone throughout the day. The 4 hour charts look a little toppish now, and on the downside, with the 1 hour charts also showing some bearish divergence and looking a little toppish, selling a rally may be the 24 hour plan although I don’t think we are going anywhere too far on Thursday. If we do drift lower, support should once again arrive at 0.6955/60, ahead of 0.6940/50 and then at minor Fibo levels of the rally from 0.6831, at 0.6930, 0.6920, and 0.6912 and at 0.6895 although this currently looks some way off. On the topside, resistance will again be seen at 0.6995 and then at 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 another drifting session may be in store.

Gold:  having made a 6 year high at 1439 on Tuesday, it has since reversed sharply, to trade down to 1402 and currently sits right on the 100 HMA at 1408. As I said yesterday, it would not surprise me if we have now seen a medium term top in Gold and with the dailies now at overbought extremes and the 4 hour charts are turning lower; selling rallies is favoured with a SL placed above the trend high. A period of choppy consolidation may be the outcome, but the near term momentum points lower, and we may see a run back to 1400 (23.6% of 1275/1439) below which would open the way to 1380/75 (200 HMA/38.2% of 1275/1439) and to 1365 although this is rather distant. While the short term/daily charts look rather overbought and turning lower, the weekly charts looking positive and in the longer term, they seem to be building momentum for a move higher. 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. In the meantime I prefer to sell rallies, hoping for a push below 1400.


*Trade of the day: June 27, 2019; 8:13 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 @1.1410. SL @ 1.1440, TP @ 1.1310

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

Sell AudUsd @ 0.7015. SL @ 0.7045, TP @ 0.6940

Buy AudUsd @0.6945. SL @ 0.6155, TP @ 0.6995

Sell Gold @ 1420. SL @ 1433, TP @ 1400