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

By | September 4, 2019

The US$ is under some mild downside pressure on Wednesday and this looks as though it may escalate in the coming session, with the charts looking generally more positive against the Euro, Sterling, Aud and Nzd, while the Jpy looks set to remain in neutral, currently clinging closely to 106.00 against the dollar. The Jpy/Xs all looks as though they may see a bit of upside momentum although selling into strength is still the medium/longer term strategy.

The directional moves still look to be in the metals, where Silver in particular has made strong gains. Buying dips remains the main theme here.

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*Trade of the day: September 4, 2019; 8:31 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 @ 1.0930. SL @ 1.0915, TP @ 1.1050

Sell AudUsd @ 0.6800. SL @ 0.6835, TP @ 0.6700

Buy AudUsd @ 0.6715. SL @ 0.6690, TP @ 0.6795

Buy NzdUsd @ 0.6300. SL @ 0.6260, TP @ 0.6370

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

Buy Gold @ 1525. SL @ 1505, TP @ 1565

Sell Gold @ 1570. SL @ 1585, TP @ 1525

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EurUsd:   The Euro has recovered from a low of 1.0925 after meeting our longer term objective of 1.0940 and currently sits at 1.0970, with the short term momentum indicators looking a little more positive, so I suspect that further gains could now lie ahead. If so, once the Euro heads above 1.0975/80 we could see a run towards 1.1000, and 1.1025 (both minor), ahead of 1.1040 (23.6% of 1.1411/1.0925), 1.1065/70 and 1.1100. Above here would then target  (38.2% of 1.1411/1.0925) and then 1.1167 (50%) but which seems unlikely to be visited again for a while. On the downside, support will be seen at 1.0940/50 ahead of the 1.0925 low. Below that opens the way to 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.

 

US$Jpy:  ended the day at familiar levels, near 106.00 after a 105.74/106.38 range and once again leaves us in neutral as more of the same looks likely today. Above the session high, offers would arrive at 106.50/55 ahead of 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, the initial support now sits at 105.75/80 and the 27 August low of 105.59. 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$ has squeezed higher following the RBA decision to leave rates on hold and now awaits the release of the Q2 GDP (exp 0.5%qq, 1.4%yy) to provide the next directional move. The charts look a little more constructive today, at least in the short term, and if the GDP comes out near expectations then we could see a squeeze towards 0.6785/90 (minor) ahead of 0.6800 and then to the 8 August high of 0.6821. Beyond here seems unlikely but if wrong, Fibo resistance lies at 0.6830 (38.2% of 0.7081/0.6675) ahead of 0.6878 (50%), 0.6900 and then at 0.6926 (61.8%). On the downside, support will be seen today at0.6725/30 (minor) ahead of 0.6700/05, below which would open the way back to 0.6688, where we now have a minor double bottom – 3 Sept/26 August lows – , 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)). I have squared up most of my shorts and suspect that we may see a squeeze to the upside today, although in the medium term I still think that the Aud$ will suffer because of the trade war/recession concerns, so I still prefer to sell rallies for the medium term move to new lows.

 

NzdUsd: having made a new multi year low at 0.6269 on Tuesday, the Kiwi has since squeezed higher, currently at 0.6330, and has formed a bullish key-day reversal which suggests further gains to come. If so, resistance will arrive right ahead, at 0.6340 (200 HMA), at 0.6360/65 (minor) ahead of 0.6390 (23.6% of 0.6789/0.6269) 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). On the downside, 0.6300 will now see decent bids ahead of 0.6270, but which looks pretty safe right now. Below this, 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.  With the short term momentum indicators currently looking more constructive, I suspect that buying dips is now the near term plan although, in the longer term, I still think we have plenty of downside potential.

 

DXY:  (99.00) The DXY continued its run higher on Tuesday in reaching a multi year high of 99.37, before heading into reverse to sit pretty much unchanged at 99.00. The index has now reached our long term objective at 99.25 and so a more cautious stance is required, as a corrective move lower could be on the cards. If so, support will now be seen at 98.81 (2 Sept low), at 98.55 (23.6% of 95.84/99.37), 98.40 (30 Aug low), 98.16 (29 Aug low), at 98.02 (38.2% of 95.84/99.37) and then at 97.86 (Wednesday low) and then at 97.50 (100 DMA). On the topside, resistance will be seen at 97.37 and then at 100.00 and 100.16 (76.4% of 103.82/88.30) although this is still a long way off. Selling rallies with a tight SL above 99.40 would be today’s strategy. Note that the daily MACDs (below) are still pointing higher but are showing some bearish divergence and thus I feel that we may need some consolidation, possibly a turn lower before we can resume the longer term uptrend, as hinted at in the weekly charts.

 

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