Tuesday was again mostly quiet and the FX charts show little direction, although a “risk-on” theme seems to dominate and the stock markets, in particular, seem set for further gains, possibly during Donald Trump’s SOTU speech during the Asian session.
As we said before though, some stiff resistance lies ahead, with the S+P the 200 DMA at 2744, just 10 points above the current market. The DJI is also making a strong attempt to break away from the convergence of the 100 DMA /200 DMA, both now at 24940. The DJI is now 400 pips above this level, so buying here, or on dips towards 25000, with a SL placed at around 24850, may be a plan.
The FX markets still look rather muddled although EurUsd may see some mild downside pressure again today, while US$Chf is now back at parity and the medium term charts look positive for the Chf so I prefer to trade that from the long side, while selling rallies in EurUsd towards 1.1450 with a tight stop above 1.1500, maybe worthwhile.
The Aud$ has been volatile and the charts do look mildly positive, s o buying dips may be an idea but yesterday’s RBA decision and the ongoing soft data suggest to me that the Aud is going to head lower over time so I do actually prefer the short side.
WTI was choppy again on Tuesday and ended the session back below the neckline of the previously mentioned reverse Head/Shoulders formation. In the short term I would leave WTI alone although in the medium term, I still prefer buying dips. The short/medium term momentum indicators look heavy but the weeklies still seem headed higher though so patience is required. The 200 WMA is at 52.20, so looking to buy the dips again, with a SL below this level may be an idea, or alternatively, look to buy at the base of the right hand shoulder, around 49.50, with a SL at 48.50
The metals have gone into neutral so seem best left alone.
*Trade of the day: February 6, 2019; 10 :28 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 AudUsd @ 0.7260. SL @ 0.7305, TP @ 0.7180
Buy AudUsd @ 0.7155 SL @ 0.7125, TP @ 0.7225
Buy US$Jpy @ 109.50. SL @ 109.15, TP @ 110.20
Buy EurUsd @ 1.1375. SL @ 1.1345, TP @ 1.1450
Sell EurUsd @ 1.1450. SL @ 1.1505, TP @ 1.1385
Buy US$Chf @ 0.9965. SL @ 0.9935, TP @ 1.0070