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

By | September 3, 2019

Given the US holiday it has been a fairly rangebound session although Sterling headed lower and looks heavy heading into Tuesday trade. Otherwise there is little to go on today and it may be that we see mostly sideways trade although RBA Meeting may produce some action for the Aud$. Elsewhere in the FX markets, UsdCnh looks bid on all fronts, despite some bearish divergence warnings in the charts while, in other markets, stocks still look a little heavy in the short term.

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*Trade of the day: September 3, 2019; 8:51 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 @ 1.1010. SL @ 1.1050, TP @ 1.0915

Buy EurUsd @ 1.0940. SL @ 1.0925, TP @ 1.1050

Sell AudUsd @ 0.6765. SL @ 0.6785, TP @ 0.6685

Buy AudUsd @ 0.6680. SL @ 0.6660, TP @ 0.6750

Sell NzdUsd @ 0.6330. SL @ 0.6370, TP @ 0.6280

Sell S+P @ 2920. SL @ 2955, TP @ 2845

Buy Gold @ 1500. SL @ 1485, TP @ 1555

Sell Gold @ 1545. SL @ 1565, TP @ 1485

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EurUsd:   had another tough session to start the week in falling to a new 2 year low of 1.0957. The charts look increasingly heavy and the Euro looks as though it has yet more downside ahead of it and could head towards strong support at 1.0940, and a week EU PPI/strong US Mfg ISM, due later today, could be the catalyst to push it there.. I don’t think this will give way at the first attempt, but if wrong, look for further losses towards 1.0900 and to 1.0860 (76.4% of 1.0340/1.2555), below which there is a chart gap that would take us to 1.0772. On the topside, resistance will be seen at 1.1000 (minor), 1.1025 (23.6% of 1.1411/1.0957) and 1.1050 ahead of 1.1067 (38.2% of 1.1411/1.0957), 1.1085 and then again at 1.1100 (50% of 1.1411/1.0957),, which seems unlikely to be visited again for a while.  Selling rallies remains the preferred strategy.

 

US$Jpy:  ended Monday at 106.20, after a 105.90/106.40 range and once again leaves us in neutral. Above 106.50/55 would find further offers at 106.67 (28 Aug high) and again at the recent highs at 106.70/76 (23/15 Aug highs), beyond which would then head to 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, minor support now sits at 106.00, but back below the 105.90 session low, support would be seen at the session low of 105.82 and the Wednesday low of 105.65. Further bids would arrive at 105.50, at 105.15 and at 105.00 (all minor). Beneath 105.00 there would again be little support ahead of the 26 August, 104.44 low and then the January flash-crash low (104.01). A choppy sideways session seems likely, probably again confined to 106.00/50.

 

AudUsd:  The Aud$ traded sideways on Monday sitting just above 0.6700 and will  now  hang near current levels while waiting on the RBA Meeting, at which the statement is likely to be the focus, as rates are expected to remain on hold. On the downside, support will again be seen at 0.6700/05, below which would open the way back to 0.6688 – the 26 August 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 0.6750/55 and then 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 in the near future, 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 again today and the dailies do still look mildly constructive as they recover from having previously become oversold, so a rally is still possible but I think that levels sub 0.6700 are still more likely in the medium term. A dovish RBA could bring that about sooner rather than later.

 

NzdUsd: having made a new multi year low at 0.6283 on Friday, last seen in September 2015, the Kiwi has spent Monday chopping around just above 0.6300, and is currently sitting at 0.6310. With the longer term charts aligning lower, it seems that the Kiwi is due for further downside pressure, and once below 0.6280/85, 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. The short term momentum indicators may be trying to turn a little higher, and if so, resistance will arrive at 0.6320 (100 HMA), 0.6335 and then at 0.6350/55 (200 HMA) ahead of 0.6365 and 0.6400, (23 Aug high). Beyond there, unlikely today, would allow for a run towards 0.6428 (20 Aug high) and to 0.6445(23.6% of 0.6789/0.6340). The hourlies are hinting at some minor bullish divergence so we may see a bit of a bounce but the 4 hour charts don’t suggest it will be anything significant and overall, I still prefer to sell rallies.

 

DXY:  (99.05) The DXY continued its run higher on Monday, ending the day at 99.05, and the index looks underpinned heading into Tuesday trade, with the daily MACDs again turning higher, albeit without too much momentum behind them and some bearish divergence showing in the daily chart (below). The weeklies are also making an attempt to squeeze higher and while I think we may have further mild upside momentum ahead of us, a cautious stance is required as we approach the longer term target at 99.25, this being the reverse H/S objective at around 99.25 (EurUsd: 1..0940 – ish).On the downside, support will now be seen at 98.81 (Session low), at 98.50/40 (Friday low; 99.41), at 98.16 (Thursday low), at 98.00 and then at 97.86 (Wednesday low) and then at 97.50 (100 DMA).

 

 

 

 

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