3 May: Trend table outlook for FX, Commodities, Indices

By | May 3, 2019

The US$ is firm, while stocks, the metals and oil are all heavy ahead of today’s US jobs data. Until then the market will be pretty dead, and I would not be too involved although I still like to buy the dollar on dips and sell stocks and the metals on any rally.

EurUsd:  remains heavy heading into the US jobs data, closing at the low end of the day’s range of 1.1218/1.1171. The momentum indicators generally point lower still and if so, the initial support arrives at 1.1145/50 ahead of the recent low at 1.1110. Below 1.1100 would target 1.1060/65, where the base of the descending wedge should see decent bids. A downside break would then open the way to 1.1020 (minor) and to 1.1000. On the topside sellers will be seen at 1.1200 and at 1.1215/20. Above here looks unlikely, unless we see a big miss in the NFP, but further levels would be at 1.1230/40 ahead of Wednesday’s 1.1265 high, and beyond that would then target 1.1300 and 1.1318/25(61.8% of 1.1447/1.1110/17 April high). I suspect we are likely to see 1.1000 before we see 1.1300 but we shall have to wait and see.

DXY: (97.85) is a bit higher at the start of Friday after a fairly tight range on Thursday. As before, the daily momentum indicators look indecisive although the weeklies do show some very mild positive momentum. On the downside support will again arrive at 97.50 (minor) and then at 97.25/15, below which there is not too much to hold it up until the /12 April low at 96.75 and the 100 DMA/ Rising trend support, seen at 96.67. On the other hand, a topside squeeze could see a move to 98.00, ahead of a return to the 98.33 trend high. Further gains would see a run towards 98.80, where the top of the rising wedge lies, and then towards 100.10 (76.4% of 103.82/88.25).A cautious stance is required ahead of the NFP although I still prefer to buy dips.

US$Jpy: remains pretty much rangebound due to Japanese Golden week although today’s risk mood following the release of the US data may provide something more directional. Wednesday saw the pair reach the week’s low at 111.06 and this remains the initial support. Below here would open the way through 111.00, towards 110.80/75 – 100 WMA/rising trend support, which should be strong. On the topside, minor resistance will again be seen at 111.80/85 and at 112.00 (200 WMA) and then at 112.40. Further targets would then be at 112.50/60 and eventually ay 113.05 (61.8% of 118.61/104.01) although this is a long way off. There are easier things to trade right now – sidelined.

GbpUsd: Stand aside. Too hard.

AudUsd: The Aud remains heavy and is currently grinding its way below 0.7000 but is still holding above the week’s low of 0.6988. Below here would open the way for a run towards 0.6970, 0.6950 and eventually to 0.6900, which I think is where we are heading. On the topside, sellers will arrive at 0.7015/20, at 0.7030/40 and again at 0.7055/60. I doubt we see it up here anytime soon, but if wrong 0.7070 (38.2% of 7206/0.6988), 0.7100, and then 0.7120 (100 DMA) will be levels to watch. I prefer to sell rallies in anticipation of the inevitable rate cut, possibly on Tuesday at next week’s RBA Meeting.

NzdUsd: As with Aud$, the Kiwi remains heavy and currently sits at the familiar 0.6620 level after a tight 0.6607/39 daily range on Thursday.  Near term resistance will now be seen at 0.6640/45 (200 HMA) ahead of 0.6685 and 0.6700. Further out, above here would open 0.6715 (38.2%) and the 200 DMA at 0.6728, although not today I suspect. On the downside, support will be seen at 0.6600/05 and 0.6580. In the medium term, look for the chance of a decline towards 0.6560 (January flash crash low) and eventually to the long-term rising trend support at 0.6500 – from March 2009.

On the crosses, as with yesterday, the Jpy and Gbp both look generally firm, while the Aud and Nzd both seem under pressure. Selling EurJpy, AudJpy, NzdJpy, EurGbp may be a plan although I prefer to remain focused on the US$ moves right now as I suspect we are on the verge of a decent move higher.

Gold: had a tight range on Thursday and remains near 1270 but continues to respect the neckline of the SHS formation (1285), and while it does so I still prefer the downside as I suspect the US$ strength will return to place downside pressure on commodities. As before, should the SHS formation work as planned, the downside target is seen at 1218 so I prefer to stay short. Ahead of that, the immediate downside target is at 1267, ahead of 1253 (200 DMA). On the topside, resistance will be seen at 1285 again, so leave stops above here, ideally above the 100 DMA, currently at 1292

Silver: remains at the current trend low at 14.60, unchanged on the day after having broken the HS neckline in the process. Further downside potential now looks possible, where support would be seen at 14.45 (76.4% of 13.89/16.21), 14.20 (minor) and at 14.00 but with the HS target being at 13.85. On the topside, resistance will be seen at 14.80/90 and at 15.00/05 (50% pivot of 13.89/16.21), but above which could then see a run toward the 100 DMA at 15.32. I prefer to stay short as I think 14.00 – and lower – is eventually on the cards.

Stocks: The S+P, having made a key day reversal from its new all-time high (2960) had another negative session and looks a little vulnerable heading into the NFP result. The US jobs data will provide the directional move but from a technical perspective, the downside does look like the point of weakness right now. I prefer to be short with a tight SL placed above the recent trend/all-time highs.

WTI: had a tough session in falling 4% where it reached our major support level at the 200 DMA/Fibo support @ 23.6% of 42.23/66.57 (low: 60.92), ahead of the bounce to end the day at 61.54. The momentum indicators look increasingly heavy and a break of the200 DMA would then allow for a run towards 60.30/40, 59.25 (both minor) ahead of 58.25 (28 March low). On the topside sellers will be seen at 62.20, which now looks a decent sell level, but above which would open the way to 63.00 and 63.75. Above here could again see 65.00but looks increasingly doubtful.


*Trade of the day: May 3, 2019; 7:54 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 @1.1215. SL @ 1.1270, TP @ 1.1145

Sell AudUsd @ 0.7025. SL @ 0.7065, TP @ 0.6960

Sell WTI @ 64.75. SL @ 65.30, TP @ 63.00

Sell Silver @ 14.80. SL @ 15.08, TP @ 14.25

Sell Gold @ 1285. SL @ 1295, TP @ 1255