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

By | August 30, 2019

Both the US$ and stocks are firm today as trade tensions ease and this looks as though it could continue into the weekend although any headline suggesting otherwise would see a quick reversal in risk sentiment. The EU CPI will be the main event of the day and if it fails to match expectations- as with the German figure in the previous session – the Euro is likely to remain under pressure.

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*Trade of the day: August 30, 2019; 7:00 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 @ 1.1185. SL @ 1.1105, TP @ 1.1000

Buy EurUsd @ 1.1000. SL @ 1.0955, TP @ 1.1100

Sell AudUsd @ 0.6755. SL @ 0.6785, TP @ 0.6685

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

Sell NzdUsd @ 0.6340. SL @ 0.6370, TP @ 0.6280

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

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

Other strategies seem to be: –

With the improved risk sentiment on Friday, safe haven demand has diminished and means that the Jpy and the Chf are under some downside pressure, which is generally reflected in the charts for the associated crosses.

The commodity currencies are unable to show any sign of recovery despite the improved risk mood. Sell rallies still seems to be the theme, especially in the Kiwi which looks very heavy.

Stocks look healthy today although I am reluctant to buy the indices here and I expect the volatile conditions to continue.

WTI currently looks healthy while Gold appears to have further downside potential.

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EurUsd:   had another tight session (1.1092/1.1041) albeit that the Euro remains heavy and the technical levels remain largely intact. On the topside, back above 1.1090 would find stronger resistance at 1.1100/20 (38.2% of 1.1249/1.1041), 1.1145 (50%), and 1.1170(61.8%) ahead of 1.1200 (76.4%). On the downside 1.104050 will continue to see bids but this could well be tested later if the EU CPI is downbeat and, as I said before, I suspect that we could see a 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 firmer on Friday, currently at 106.50 after reaching a high of 106.67, and looking to test 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 106.25/30 but back below 106.00, 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 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 Thursday and after a tight range (0.6715/52) it has finished mid-range, currently at 0.6730. On the downside, support will again be seen at 0.6715, 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 0.6750/55 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.

NzdUsd: The Kiwi made a new multi year low at 0.6305 on Thursday, last seen in September 2015, and it looks heavy heading into Friday trade, currently sitting at 0.6310. With the charts aligning lower, it seems that the Kiwi is due for further downside pressure, and once below 0.6300 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 0.6335 and then at 0.6350/55 ahead of 0.6375 (200 HMA) and at 0.6400, (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. 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.

 

 

 

 

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