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

By | August 29, 2019

The FX markets have been mostly steady on Wednesday, with the exception of Sterling which gyrated on the latest Brexit news, but ended the day in mid-range.

The heat map is not showing a great deal of directional bias today although the Australian CAPEX figures may provide some interest in the Aud$, which still looks heavy, and then later on it will be the German CPI and the USQ2 GDP figures that provide the focus for the day.

Stocks were slightly higher and seem set to stay volatile. I still prefer to sell rallies, on the basis that the longer term charts continue to look heavy.

The metals seem to have further upside potential but it may be a choppy session, to allow the charts to unwind their short term overbought conditions.

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*Trade of the day: August 29, 2019; 8:25 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 @ 1.1110. SL @ 1.1155, TP @ 1.1030

Buy EurUsd @ 1.1025. SL @ 1.0995, TP @ 1.1125

Sell AudUsd @ 0.6765. SL @ 0.6795, TP @ 0.6705

Buy AudUsd @ 0.6690. SL @ 0.6670, TP @ 0.6780

Sell NzdUsd @ 0.6350. SL @ 0.6385, TP @ 0.6290

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

Buy Gold @ 1515. SL @ 1490, TP @ 1555

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EurUsd:   had another tight session (1.1097/1.1075) and the technical levels remain largely intact. On the topside, back above 1.1100/15, 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 we are currently sitting on minor support at 1.1080, below which, minor bids will arrive at 1.1065 ahead of 1.1050. This could well be tested today if the German CPI is downbeat and/or the US GDP beats expectations. As I said before, I suspect that we could see an eventual return to the trend low of 1.1025 (31 July low), which comes 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 1.1115/1.1015 as a guide today.

US$Jpy:  is back at 106.00 on Thursday in what was a choppy Wednesday session in trading between 105.65/106.22. The momentum indicators are mixed so a continuation of the choppy conditions seems likely, although in the short term it seems that we may see further minor upside potential. If so, the initial resistance will be seen at the session high/200 HMA, at 106.22/25, and then the Monday high at 106.41. Further offers will 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.  On the downside, back below 106.00, support will today be seen at the session low of 105.65 and then at 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). A choppy session with a very mild upside bias seems to be the plan, with a SL placed below 105.65.

AudUsd:  The Aud$ has traded sideways/lower again on Wednesday and after a tight range (0.6731/61) it has finished on its lows looks heavy heading into Thursday, where the Australian CAPEX figures will provide the direction. On the downside, support will be seen right here at 0.6735 (23/14 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)).  On the topside, resistance will be seen at 0.6760/65 ahead of 0.6775/80 and the outside chance of a run back towards 0.6800. I doubt we see it back at 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%). 0.6700/0.6750 may well cover it today and the dailies do still look mildly constructive as they recover from having previously become oversold, so a rally is still possible but it is a worry that the Aud$ still looks heavy and overall I think that levels sub 0.6700 are still more likely in the medium term. Keep an eye on the USDCNY Fix. If the PBOC allow the CNY to weaken, then the Aud will remain under pressure.

NzdUsd: The Kiwi made a new multi year low at 0.6325 in late Asian trade on Wednesday, last seen in September 2015, ahead of a dead-cat bounce to 0.6355, although that has since petered out and the pair currently sit a t0.6335. With the charts aligning lower, it seems that the Kiwi is due for further downside pressure, and once below 0.6325 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. Resistance will now arrive at 0.6355 ahead of 0.6375/80 and at 0.6390/00, (200 HMA/23 Aug high). Beyond there, unlikely, would allow for a run towards 0.6428 (20 Aug high) and to 0.6445(23.6% of 0.6789/0.6340), but with the charts all looking heavy heavy I still prefer the downside.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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